HKR Middle East Architects Engineering LLC and Jeremiah Ryan v Barry English
| Jurisdiction | Ireland |
| Judge | Mr. Justice Denis McDonald |
| Judgment Date | 03 March 2021 |
| Neutral Citation | [2021] IEHC 142 |
| Docket Number | [2017 No. 6277 P.] |
| Court | High Court |
| Date | 03 March 2021 |
[2021] IEHC 142
[2017 No. 6277 P.]
THE HIGH COURT
COMMERCIAL
Particulars – Strike out – Interest – Defendant seeking an order striking out certain particulars delivered on behalf of the first plaintiff – Whether the particulars complied with the applicable legal principles
Facts: The defendant, Mr English, applied to the High Court seeking an order striking out certain particulars delivered on behalf of the first plaintiff, HKR Middle East Architects Engineering LLC (HKRME). Those particulars had been furnished in respect of the last surviving claim made by the plaintiffs in the proceedings. The particulars in question purported to be given in respect of the claim made in relation to the unpaid and lawful liabilities of HKRME which HKRME contended should be paid by the defendant in circumstances where, as found by McDonald J in his judgment of 10th May, 2019 in the proceedings, the defendant was unjustly enriched by substantial payments made by HKRME to the defendant on foot of fictitious invoices in respect of equally fictitious introduction services purportedly provided by the defendant. HKRME contended that, as a consequence of the payments made to the defendant, it had been unable to discharge other debts due by it to its creditors. The defendant contended that the particulars which were furnished in December, 2019 did not comply with the directions given in McDonald J’s ruling on 24th July, 2019 and, furthermore, did not comply with the applicable legal principles governing the delivery of particulars.
Held by McDonald J that, regarding the item (which was addressed in paras. 20 to 24 of the December 2019 particulars) relating to a loan which it was claimed was made by the second plaintiff, Mr Ryan, to HKRME in July, 2011, he did not believe that it would be appropriate to strike out this element of the case made by HKRME as any issues in relation to this item would fall to be determined in the course of the account and enquiry directed by him. He held that, regarding the next item in the December 2019 particulars relating to monies alleged to be owed by HKRME to a related company which was referred to in the particulars by reference to the acronym HKRDMC, it was not possible to determine that the amounts claimed in respect of items which had arisen since March, 2015 did not fall within the pleaded case and, in particular, within the rubric of unpaid liabilities of HKRME. He held that, regarding the items relating to fees paid to sub-consultants, those items could not be excluded as it would be a matter for HKRME to prove at the hearing of the account and enquiry that they did fall within the rubric of unmet obligations. He held that, regarding the item relating to a claim for salary alleged to be due to Mr Ryan by HKRME, he did not believe that he could determine that the salary claimed did not fall within the rubric of unmet obligations of HKRME. He held that, regarding the item described in the schedule as relating to “Other Liabilities” amounting in total to €333,723, he did not believe that he was in a position to determine that the amounts claimed under the “Other Liabilities” heading did not fall within the ambit of the claim made in respect of unmet obligations. He held that, regarding the final item in the December 2019 schedule relating to a claim for interest in the amount of €658,894 in respect of the liabilities claimed to be due relating to staff salaries, the funds owed to HKRDMCC, sub-consultant fees and the salary claimed to be due to Mr Ryan, he did not believe that he should strike out this element of the HKRME claim. He held that there may well be a valid claim for interest but it needed to be explained and the rate also needed to be explained. He held that he would direct that within four weeks from the date of delivery of this judgment, HKRME should provide the defendant with an explanation for the claim for interest and the reasons why it was not previously included in the 2017 schedule.
McDonald J held that, save for the order proposed, the application made by the defendant should be refused. McDonald J’s provisional view in relation to costs was that the costs of the application should be reserved.
Application refused.
JUDGMENT of Mr. Justice Denis McDonald delivered on 3rd March, 2021
This is a somewhat unusual application in which the defendant seeks an order striking out certain particulars delivered on behalf of the first named plaintiff (“ HKRME”). These particulars have been furnished in respect of the last surviving claim made by the plaintiffs in these proceedings. The particulars in question purport to be given in respect of the claim made in relation to the unpaid and lawful liabilities of HKRME which HKRME contends should be paid by the defendant in circumstances where, as found by me in my judgment of 10th May, 2019 in these proceedings (“ my May 2019 judgment”), the defendant was unjustly enriched by substantial payments made by HKRME to the defendant on foot of fictitious invoices in respect of equally fictitious introduction services purportedly provided by the defendant. HKRME contends that, as a consequence of the payments made to the defendant, it has been unable to discharge other debts due by it to its creditors.
In para. 399 of my May 2019 judgment, I found that:-
“…very substantial payments were made by HKRME to Sunvit in respect of completely fictitious introduction services purportedly to be provided by Mr. English. Those services were not provided and were never intended to be provided. There was accordingly a total failure on the part of Mr. English to perform what was promised under the agreement. In fact, the entire arrangement was simply a mechanism that had been put in place to enable monies to be extracted by Mr. English… While the monies were notionally received by Sunvit, it is Mr. English who was the beneficiary… Sunvit was no more than a vehicle to receive funds on his behalf.”
In para. 400 of my judgment, I concluded that this was a classic case in which the remedy of unjust enrichment applied and accordingly I found that HKRME was entitled to a remedy against Mr. English arising out of the transfers in question. However, I also found that, given the way in which the case had been pleaded in the statement of claim and had been run, it was clear that the only claim which was made by HKRME in that regard was in respect of its unpaid liabilities which, according to the statement of claim delivered in these proceedings, amounted to approximately AED 8.7 million. Thus, in para. 401 of my judgment, I indicated that the only relief which I could grant to any of the plaintiffs was in relation to the unpaid lawful liabilities of HKRME. As I had not heard any evidence as to those liabilities during the course of the trial of these proceedings, it seemed to me that, as set out in para. 401 of my May 2019 judgment, the appropriate order to make was to direct that an account and enquiry be taken of the unpaid and lawful liabilities of HKRME. In the same paragraph of my judgment, I also said:-
“At the conclusion of that account and enquiry, an order will be made requiring the payment by Mr. English to HKRME of the amount found to be due… At this point, I do not have any details of the nature of the liabilities in issue. In particular, I do not know whether any of the liabilities may relate to sums claimed to be due to Mr. Ryan himself or to members of his family. Should it transpire that some of the liabilities are of that nature, it may become necessary, at that point, to consider whether any issues of illegality or public policy arise which would make it inappropriate that any such liabilities should be recovered from Mr. English.”
The account and enquiry in relation to the lawful liabilities of HKRME was the only aspect of the case made by the plaintiffs in these proceedings which succeeded.
The reference to AED 8.7 million in my May 2019 judgment was taken from para. 62 of the amended statement of claim delivered on behalf of the plaintiffs to the proceedings in which it was pleaded, in bald terms, that HKRME has “ unmet obligations, including staff and consultants' fees, amounting to approximately AED 8.7 million”. The defendant sought particulars of this allegation and in the response dated 18th September, 2017 to that request for particulars, the plaintiffs provided a schedule of HKRME's “ unmet obligations” which showed a total sum of AED 8,483,686.28 alleged to be due which was made up of salaries paid in the period January to March, 2015 of AED 806,066.58 and sub-consultants' fees to a number of parties including Green Cube (in an amount of AED 3,436,470.00) which amounted, in the aggregate, to AED 7,677,619.70.
Following the delivery of the May 2019 judgment, the defendant's solicitors were informed by the solicitors acting for HKRME of their intention to deliver updated particulars of the liabilities of HKRME. Thereafter, on 20th June, 2019, the proceedings were listed before me and I ordered that further particulars of the alleged liabilities of HKRME should be delivered “ with all accompanying documentation” on or before 12th July, 2019 without prejudice to the defendant's right to contest the entitlement of HKRME to provide any of these particulars. In an ex tempore ruling of the same day I directed that, to the extent that any items arise which were not addressed in the particulars previously provided in 2017, it would be appropriate to explain how it is that they arise since then and to provide as much detail as possible in relation to any such item.
On 12th July, 2019, a further schedule of the alleged liabilities of HKRME was provided to the defendant on foot of the ruling given by me on 20th June, 2019. The...
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