Greenville Primary Care Ltd v St. Brendan's Trust

JurisdictionIreland
JudgeMs. Justice Stewart
Judgment Date10 November 2017
Neutral Citation[2017] IEHC 668
Docket Number[2015 No. 3544 P.]
CourtHigh Court
Date10 November 2017
BETWEEN
GREENVILLE PRIMARY CARE LIMITED
PLAINTIFF
AND
ST. BRENDAN'S TRUST
DEFENDANT

[2017] IEHC 668

[2015 No. 3544 P.]

THE HIGH COURT

CHANCERY

Practice & Procedure – Company – S.52 of the Companies Act – O.29 of the Rules of the Superior Courts – Prima facie

Facts: The defendant filed a notice of motion pursuant to s.52 of the Companies Act and o.29 of the Rules of the Superior Courts and sought an order that the corporate plaintiff would provide the security for the costs of the proceedings to the defendant. The subject matter of the proposed contract for sale was offered for sale by a private tender and in the same, plenary summons was issued by the plaintiff and subsequently a statement of claim was delivered in the context of the notice of motion that sought to dismiss the plaintiff's proceedings. It was contended by the defendant that the criteria of the presence of a prima facie defence and the proof of the plaintiff's inability to pay the costs had been met. It was also denied by the defendant that it was responsible for the plaintiff's inability to pay the debts.

Ms. Justice Stewart granted the relief sought. The Court observed that the defendant was entitled to seek the security for costs and had established a prima facie defence. The Court also stated that if the defendant were to be successful, the plaintiff would not have enough funds to pay the costs and the plaintiff did not demonstrate any special factors that would allow the Court to decline to apply the rule in respect of the security for costs. The Court further observed that counsel would be heard again for adjudication of the appropriate figure of the amount of security.

JUDGMENT of the Hon. Ms. Justice Stewart delivered on the 10th day of November, 2017.
1

This matter came before the Court on foot of the defendant's notice of motion seeking relief pursuant to s. 52 of the Companies Act 2014 and/or Order 29 of the Rules of the Superior Courts, whereby the defendant seeks an order that the corporate plaintiff provide to the defendant security for the costs of these proceedings.

2

The defendant is a religious trust and the owner of a property situated in Killarney, Co. Kerry. On foot of a summary summons issued on 8th May, 2015, the plaintiff seeks declaratory relief from the Court regarding the validity of a contract for sale between the defendant and the plaintiff dated 28th February, 2012, in respect of lands situated in Curraghatoosane comprising of 1.2529 hectares situated in the town and parish of Listowel, Barony of Iraghticonnor in the County of Kerry, upon a portion of which stands the Presentation Convent of Listowel. The plaintiff is a limited liability company incorporated on 3rd January, 2013. It appears to not be in dispute that the plaintiff company was established as a single purpose vehicle (hereinafter referred to as an SPV) for the purposes of taking the conveyance of the property from the defendant.

3

The background to this matter is that, on 28th February, 2012, the defendant agreed to sell the property to a purchaser. The purchaser at that time was Ms. Mary Ryan, a solicitor acting for the trust. An email by Ms. Ryan, sent in and around the time of the contract was signed, indicates that she was acting for two individuals, Mr. John J. Whelan and Mr. Moss Kelly. The contract for sale was subject to two pre-conditions:

A. that the purchaser obtain planning permission in respect of the lands; and,

B. that the consent of the Charities Commissioner for the proposed sale be forthcoming.

4

A planning application was lodged in early 2012 in the name of Austin Dennany. Planning permission was granted but the matter was appealed to An Bord Pleanála. It was affirmed on the 8th February, 2013, and was subsequently issued. The Charities Commissioner consented to the proposed sale of the land on the 18th June, 2013. In accordance with the terms of the contract for sale, once those steps had been completed, the proposed closing date for the transactions was nominated. The 15th July, 2013, was selected. Notwithstanding numerous attempts to complete the conveyance between July, 2013 and the date of the hearing, no completion has in fact taken place. It appears that the plaintiff lacked the funding to complete the transaction. On the 11th February, 2014, a completion notice was served. On the 19th May, 2014, the defendant herein issued specific performance proceedings against the plaintiff (Rec. No. 2014/4574P), to which Greenville did not enter an appearance. At the same time, there were a number of formal and informal attempts to bring the matter to a satisfactory conclusion. The specific performance proceedings were eventually discontinued.

5

In early 2015, the property the subject matter of the proposed contract for sale was offered for sale by private tender. At that point, the plaintiff in these proceedings issued a plenary summons in which they sought:

(a) a declaration that the contract for sale dated the 28th February, 2012, made between the defendant and the plaintiff was valid and subsisting,

(b) a declaration that the purported forfeiting of the plaintiff's legal deposit pursuant to the contract for sale dated the 28th February, 2012, was wrongful and not in accordance with the express and/or implied terms of the contract,

(c) a declaration that the defendant is estopped from relying on any forfeiture notice or any notice purported to terminate the contract,

(d) an injunction restraining the defendant from taking any steps to sell the land the subject matter of the aforesaid contract,

(e) an order restraining the defendant, its servants or agents from advertising the lands as being for sale or going through an auctioneer or estate agent or otherwise; and,

(f) a mandatory injunction compelling the defendant to remove any material on daft.ie suggesting that the said property and lands are for sale.

6

An appearance was entered on behalf of the defendant on 21st May, 2015. A statement of claim was delivered on 7th April, 2016. However, it appears this was delivered in the context of a notice of motion from the defendant seeking to dismiss the plaintiff's proceedings, dated 5th February, 2016. This was dealt with by consent of the Court on 11th April, 2016, when the motion was struck out and the plaintiff was directed to pay the defendant's costs of the motion, to be taxed in default of agreement. On the 28th July, 2016, the defendant raised a notice for particulars and delivered its defence and counter-claim.

7

Regarding the notice of motion seeking security for costs, it was issued on 5th February, 2016, and grounded on the affidavit of Mr. Nicholas Flynn, sworn on the 1st February, 2016. Mr. Flynn is the Company Secretary for the defendant. He avers that the company documentation indicates that the plaintiff has no assets and has €100 of share capital, which is registered in the name of John Whelan. Mr. Flynn outlines the background to the proceedings, culminating in the discontinuance of the defendant's specific performance proceedings, and its attempts to put the property back on the market. He avers that attempts at sale have been frustrated by the issuance of these proceedings and the registration of a lis pendens over the property by the plaintiff. He also sets out a series of correspondence between the parties, in which the plaintiff insists that the contact remains valid and the defendant insists that the contract has been rescinded and the deposit forfeited on foot of the plaintiff's continued failure to complete the contract.

8

Regarding this application for security for costs, Mr. Flynn highlights the plaintiff's lack of assets. He also highlights the defendant's repeated and unsatisfied requests that the plaintiff complete the contract and/or provide proof that it can afford to pay the costs incurred in defending these proceedings. With regard to the defendant's prima facie defence to these proceedings, Mr, Flynn relies on the terms of the contract (which clearly state that the deposit is non-refundable) and the plaintiff's behaviour in dealing with this matter (including their failure to complete the contract and their lack of bona fides in seeking to maintain a contract they have no intention of performing).

9

Lorna Larkin, solicitor for the defendant, swore a supplemental affidavit dated 9th March, 2017, in which she sets out an assessment of these proceedings, which was carried out by a legal costs accountant. That assessment sets out the projected costs involved in this matter and concludes that, based on the documentation available, the plaintiff would be unable to pay such monies.

10

John Whelan swore an affidavit dated 10th April, 2016, in which he sets out his version of events, including his understanding that the completion notice had been waived by the issuance of proceedings. He also avers that he took the seeking of specific performance to mean that the contract remained in place and the deposit was not forfeited. He avers that he secured an investor to forward funds and questions why this was not referred to in Mr. Flynn's affidavit. He also expresses his dis-satisfaction at the defendant's refusal to hand over title documentation that would assist in the completion of due diligence procedures, so that the contract could be executed. He also alleges that this refusal has occasioned loss. He avers that the continued frustration of the contract is of the defendant's making and that the defendant will unfairly accrue the benefit of a valuable planning permission if this contract were rescinded. Mr. Whelan avers that any prima facie defence the defendant may rely on is undermined by the waiver and/or conditionality of notices served between February – October 2014, which was brought about by the defendant's attempts to enforce and rescind the contract at the same time. He avers that...

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