Greenville Primary Care Limted v Infrastructure Investment Fund ICAV

• Jurisdiction: Ireland
• Judge: Mr. Justice Allen
• Judgment Date: 08 December 2022
• Neutral Citation: [2022] IECA 281
• Court: Court of Appeal (Ireland)
• Docket Number: Appeal Number: 2021/298

Between

Greenville Primary Care Limted

Plaintiff/Appellant

and

Infrastructure Investment Fund ICAV

Defendant/Respondent

[2022] IECA 281

Whelan J.

Collins J.

Allen J.

Appeal Number: 2021/298

THE COURT OF APPEAL

CIVIL

Security for costs – Credibility – Exclusion of documents – Appellant appealing against the judgment and order by which it was required to provide security for the respondent’s costs of the action – Whether the appellant would be able to pay the respondent’s costs

Facts: The plaintiff/appellant, Greenville Primary Care Ltd, by plenary summons issued on 20th February, 2019, claimed an order for specific performance of an Agreement for Assignment of Agreement For Lease; an injunction requiring the defendant/respondent, Infrastructure Investment Fund ICAV, to permit access by the plaintiff to such information and documentation in relation to building works as the plaintiff might reasonably require; and damages. On 24th June, 2019, the plaintiff applied for an interlocutory injunction restraining the continuation of the building work. The plaintiff’s motion was heard and refused by Allen J in the High Court on 5th July, 2019. The plaintiff was then given liberty to amend its statement of claim. The amended statement of claim was delivered on 20th February, 2020. By notice of appeal dated 1st December, 2021, the plaintiff appealed to the Court of Appeal against the judgment and order of the High Court (O’Regan J) made on 11th November, 2021, by which it was required to provide security for the defendant’s costs of the action. The plaintiff’s case was that: (1) the judge had erred in the application to the facts of the legal principles appropriate to an application for security for costs; (2) the judge erred in her finding that the defendant had a prima facie defence to the plaintiff’s claim for breach of its right to connect to a storm drain; (3) the judge erred in finding that the defendant had not contested its entitlement to connect to conduits; (4) the judge erred in her assessment of the value of a pharmacy lease; (5) the judge erred in her assessment of the value of retained lands; (6) the judge erred “in her determination that there would be a shortfall available to the plaintiff on a sale of its property, having regard to its valuation of the retained property in its financial statements for the year ending 31 December 2019 and the valuation put forward for the pharmacy lease interest”; and (7) the judge erred “in her determination that the defendant had put forward sufficient credible evidence that the plaintiff would be unable to pay the costs, without any or any sufficient regard to the credible evidence to the contrary effect put forward on behalf of the plaintiff”.

Held by Allen J that it could hardly be contested that the respondent had an argument to make that there are no terms to be implied into a deed of grant of easements or an agreement which contains an entire agreement clause. He was satisfied that the respondent had an argument to make that the appellant’s entitlement to connect to the storm drain was limited by the capacity of the drain shown on drawings. He held that the respondent’s evidence, including its evidence of valuation of the retained property, was “credible evidence” that provided “reason to believe” that the appellant would not be able to pay the respondent’s costs. He held that there was no basis on which the court could properly conclude that the picture disclosed by Mr Kirby’s Estimated Outcome Statement was altered to such an extent that there was no reason to believe that the appellant would not be able to pay the respondent’s costs. Allen J held that to arrive at that conclusion, the court would have to be satisfied it was clear that the proposed leasehold interest had a significant value, sufficient to transform the picture disclosed by Mr Kirby’s table. Allen J held that, in light of the fundamental uncertainty as to the value (if any) of the proposed leasehold interest, the court could not be so satisfied.

Allen J held that the appeal must be dismissed and the order of the High Court – including as to the costs of the motion to the High Court – affirmed. Provisionally, it seemed to him that the respondent having been entirely successful on the appeal was entitled to an order for its costs of the appeal.

Appeal dismissed.

NO REDACTION NEEDED

JUDGMENT of Mr. Justice Allen delivered on the 8 ^th day of December, 2022

Introduction

1 . This is an appeal by the plaintiff against the judgment and order of the High Court (O'Regan J.) made on 11 ^th November, 2021, by which it was required to provide security for the defendant's costs of the action.

Background

2 . By agreement for lease dated 11 ^th October, 2011, made between John Whelan and Moss Kelly, as landlord, and Health Service Executive (“HSE”), as tenant, Messrs. Whelan and Kelly agreed to grant and HSE to take a 25 year lease on a primary care centre to be built in the grounds of the abandoned convent at Convent Road, Listowel, County Kerry.

3 . By two agreements dated 24 ^th July, 2018, made between the plaintiff and the defendant, the defendant agreed to sell and the plaintiff to purchase the site on which the primary care centre was to be built, and it was agreed that the agreement for lease with the HSE would be transferred to the defendant.

4 . One of the two agreements, called Agreement for Assignment of Agreement For Lease and Ancillary Matters, recited a contract for sale dated 28 ^th February, 2012 between St. Brendan's Trust and the plaintiff and a confirmation that the plaintiff was then entitled to the benefit of the agreement for lease with the HSE. By then, planning permission had been obtained for the primary care centre but construction had not commenced.

5 . In very broad terms, the agreement was that the defendant would have the site on which the health care centre was to be built – which was referred to in the agreements as “the property” – and the plaintiff was to retain the old convent with land to the rear – which was referred to as “the retained property”. In return, the plaintiff was to have a cash price of €650,000; various wayleaves over the property for the benefit of the retained property; “a monitoring role” in relation to the construction of the primary care centre with a view to advising on potential cost savings, which, if achieved, would be shared; the prospect of an additional payment in respect of “Additional Space” in the primary care centre, if planning permission could be obtained for an extension and the HSE would agree to take a lease of it; and the prospect of a lease of part of the building for which planning permission had been obtained if permission could be obtained for a change of use from a dispensary serving the doctors in the primary care centre to a commercial pharmacy.

6 . I want to keep out of the weeds as much as possible but among the myriad issues in the case is a dispute about the date of the agreements.

7 . On the plaintiff's case the agreements were made on a date in May, 2018. On the defendant's case, they were made on 24 ^th July, 2018. On the plaintiff's case the agreements were signed by both parties in May, 2018 and sent to the defendant's solicitors “to be held on trust and to our order pending completion of the property acquisition”. The date of the agreements is said by the plaintiff to be somehow relevant to the defendant's obligation to apply for planning permission for the extension but the obligation to apply for planning permission for the extension was an obligation “within 6 months of the date of completion of the purchase of the property.”

8 . It is common case that the purchase of the property was completed on 24 ^th July, 2018. If, as is the plaintiff's case, the agreements were to have been held in trust until then, the effective date was 24 ^th July, 2018 and it does not matter when they were signed. And in any event, the defendant's obligation to apply for planning permission for the extension ran from the date of completion of the sale. It seems to me that on any view the only relevant date is 24 ^th July, 2018 but – like a lot of the detail that emerged in the course of a protracted exchange of affidavits on this motion – it is simply not relevant for present purposes.

The action

9 . By plenary summons issued on 20 ^th February, 2019 the plaintiff claimed an order for specific performance of the Agreement for Assignment of Agreement For Lease; an injunction requiring the defendant to permit access by the plaintiff to such information and documentation in relation to the building works as the plaintiff might reasonably require; and damages €763,705. While the summons claimed an order for specific performance of the Agreement for Assignment of Agreement For Lease, generally, the focus of the statement of claim – which was delivered on 5 ^th March, 2019 – was on the “monitoring role” in relation to the construction costs. The estimated construction cost for the primary care centre, it was said, was €3 million. This was in fact the “Projected Cost” provided for in the Agreement for Assignment of Agreement for Lease. The plaintiff, it was said, had identified cost savings of €1,241,797.40, exclusive of VAT, but the defendant had entered a fixed sum contract for the building works for a sum in excess of €3 million. The claim was that by reason of 33 alleged breaches of contract by the defendant in connection with the procurement of the building contract which it had entered for the construction of the primary care centre, the plaintiff had lost – or the defendant had thrown away – the opportunity of achieving cost savings of €1,241,979.40 plus VAT and the plaintiff had lost the opportunity to be paid half of that sum, which was said to be €763,705.40. On 19 ^th June, 2019 a defence was delivered denying the claim on various grounds. Specifically, the...