Jim Stafford (as Statutory Receiver of Hollioake Ltd ((in Receivership))) v Peter Rice

• Jurisdiction: Ireland
• Judge: Mr. Justice Garrett Simons
• Judgment Date: 30 April 2021
• Neutral Citation: [2021] IEHC 235
• Docket Number: 2013 No. 13117 P.
• Court: High Court
• Date: 30 April 2021

Between

Jim Stafford (As Statutory Receiver of Hollioake Limited (In Receivership))

Plaintiff

and

Peter Rice

Sheila Rice

Gregory Rice

Angela Rice

Mark Rice

Defendants

[2021] IEHC 235

2013 No. 13117 P.

THE HIGH COURT

Amendment of pleadings – Breach of contract – Restitution – Plaintiff seeking leave to amend pleadings – Whether the proposed amendments involved the introduction of new facts

Facts: The plaintiff, Mr Stafford, applied to the High Court for leave to amend pleadings. The plaintiff sought amendments to both the plenary summons and the statement of claim. Certain of the amendments had, belatedly, been agreed to by the defendants, Messrs and Mses Rice, but there was significant disagreement between the parties in respect of the remainder of the proposed amendments. The claim as initially pleaded relied on an asserted beneficial interest in lands as giving rise to an entitlement to partition and/or sale. The proposed amendments would introduce a claim for breach of contract. More specifically, it was sought to enforce a provision in the contract for sale to the effect that the defendants were to deliver deeds of assurance to the plaintiff’s principal. Those deeds of assurance were to be delivered following an intended partitioning of the legal ownership of the lands. This was separate from the court-ordered partition sought by the plaintiff. The proposed amendments would also introduce a claim to recover the monies paid under the contract for sale. This claim was formulated in a number of different ways, including a claim for monies had and received and a claim for unjust enrichment. The principal objection made to the proposed amendments was to the effect that the plaintiff should not be permitted to introduce a new cause of action which necessitates the pleading of new facts. The defendants submitted that the claim for restitution was bound to fail. The defendants objected that there had been delay in the proceedings, and drew attention to the fact that the claims for restitution and for the alleged breach of the requirement to deliver deeds of assurance had been raised for the first time some six or seven years after the commencement of the proceedings.

Held by Simons J that the case was distinguishable from Smyth v Tunney [2009] IESC 5 on two grounds: first, the proposed amendments did not cause any prejudice in terms of the Statute of Limitations; secondly, and in any event, the proposed amendments did not involve the introduction of “new” facts in the strict sense as the amendments arose out of substantially the same facts as those already pleaded in the statement of claim and/or fell within the ambit of the original grievance. Simons J held that whereas the defendants might ultimately succeed, at the trial of the action, in their arguments that the contract had been performed in part and that they were entitled to retain monies paid under the contract for sale, it was not obvious that the plaintiff’s claim for restitution could not succeed. It did not seem to Simons J that any prejudice had arisen as a result of the delay in making an application to amend.

Simons J granted leave to amend the pleadings pursuant to Order 28, rule 1 of the Rules of the Superior Courts; the amendments permitted were those in the drafts exhibited in the affidavit of the plaintiff’s solicitor sworn on 2 July 2020. Simon J’s provisional view was that the plaintiff should be entitled to recover two-thirds of his costs of the motion to amend.

Application granted.

Appearances

Joe Jeffers for the Plaintiff instructed by Hayes Solicitors (Dublin)

Roughan Banim, SC and Elizabeth Gormley for the Defendants instructed by O'Hagan Ward & Co

JUDGMENT of Mr. Justice Garrett Simons delivered on 30 April 2021

INTRODUCTION

1 This judgment is delivered in respect of an application for leave to amend pleadings. The application is brought on behalf of the Plaintiff, and seeks amendments to both the plenary summons and the statement of claim. Certain of the amendments have, belatedly, been agreed to by the Defendants, but there is significant disagreement between the parties in respect of the remainder of the proposed amendments.

PROCEDURAL HISTORY

2 The within proceedings were instituted by way of plenary summons on 29 November 2013. The statement of claim was delivered on 8 April 2014. The motion to amend issued on 13 August 2019, and came on for hearing before me last week (22 April 2021).

3 Given the nature of the objections made by the Defendants to the proposed amendments, it is necessary to explain, briefly, how the Plaintiff's claim has evolved. The claim arises out of a contract for the sale of land, dated 24 September 2004, entered into between the Defendants, as the vendors, and the Plaintiff's principal, as purchaser. As initially pleaded, the case had been that the entire beneficial interest in the lands in sale passed to Hollioake Ltd, as purchaser, upon the making of the contract for sale. This claim is pleaded by reference to section 52(1) of the Land and Conveyancing Law Reform Act 2009.

4 (This aspect of the claim is to be amended, on consent, to allow a plea in the alternative that the purchaser had acquired a beneficial interest commensurate with the amount of the purchase price paid. It seems that this amendment is intended to address the contingency that the provisions of the Land and Conveyancing Law Reform Act 2009 may not have retrospective effect, in the sense of applying to a contract for sale made a number of years prior to its enactment. The Plaintiff appears to fall back on the principles in Tempany v. Hynes [1976] I.R. 101).

5 The reliefs sought include an order for the partition of the lands, and, in the alternative, orders for the sale of the lands and the distribution of the proceeds of sale. There is then what might be described as a catch-all plea which seeks such further or other order relating to the lands as appears to be just and equitable in the circumstances of the case.

6 The claim as initially pleaded, therefore, relied on an asserted beneficial interest in the lands as giving rise to an entitlement to partition and/or sale. The proposed amendments would introduce a claim for breach of contract. More specifically, it is now sought to enforce a provision in the contract for sale to the effect that the Defendants were to deliver deeds of assurance to the Plaintiff's principal. These deeds of assurance were to be delivered following an intended partitioning of the legal ownership of the lands. This is separate from the court-ordered partition now sought by the Plaintiff. I will refer to this claim as the “ contractual claim” where convenient.

7 The proposed amendments would also introduce a claim to recover the monies paid under the contract for sale. This claim is formulated in a number of different ways, including a claim for monies had and received and a claim for unjust enrichment. I will refer to this claim as the “ claim for restitution” where convenient.

OVERVIEW OF PRINCIPLES GOVERNING APPLICATION TO AMEND

8 The parties very helpfully prepared an agreed booklet of authorities for the assistance of the court. The summary which follows is based on this case law, as analysed by counsel in oral submission.

9 The principles governing an application to amend pleadings are well established. The modern approach commences with the judgment of the Supreme Court in Croke v. Waterford Crystal Ltd [2004] IESC 97; [2005] 2 I.R. 383 (“ Croke”). Geoghegan J., delivering the unanimous judgment of the Supreme Court, held that the primary consideration in an application for leave to amend must be whether the amendments are necessary for the purpose of determining the real questions of controversy in the litigation. Geoghegan J. observed that there had been an overemphasis in the earlier case law on an obligation to give good reason for having to amend the pleadings. As to delay in the making of an application to amend, Geoghegan J. accepted that an application to amend might properly be refused if made at a very late stage of the proceedings; for example, if made shortly before the date scheduled for the hearing of the action. A court should, however, consider whether any prejudice to the other party could be addressed instead by an adjournment and an appropriate costs order.

10 More recently, the Supreme Court, per MacMenamin J., stated the general principle as follows in Moorehouse v. Governor of Wheatfield Prison [2015] IESC 21 (at paragraph 42).

“It is clear, of course, that courts do have a discretion to amend. That discretion must be exercised judicially. Where an amendment may be made without prejudice to the other party, to enable the real issues to be tried, it should be allowed. A court must consider whether prejudice can be overcome by an adjournment. If so, that amendment should be made, and an adjournment, if necessary, granted, to overcome any possible prejudice. If the amendment puts another party to extra expense that can be regulated by a suitable order as to costs, or by the imposition of a condition that the amending party shall indemnify the other party against such expenses […]. A court will, inter alia, consider an applicant's conduct in the proceedings, and any question of delay. It is now long established that the function of courts is to decide the rights and duties of parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. […]”.

11 The parties are in disagreement as to the approach to be taken where a proposed amendment involves the introduction of a new cause of action. Counsel on behalf of the Defendants submits that an amendment cannot be allowed under Order 28, rule 1 of the Rules of the Superior Courts where it involves the introduction of a new cause of action which requires new facts to be...