Jim Stafford (as Statutory Receiver of Hollioake Ltd ((in Receivership))) v Peter Rice, Sheila Rice, Gregory Rice, Angela Rice, Mark Rice and Ken Pattullo, in His Capacity as Trustee-in-Bankruptcy of Liam J Mallon

• Jurisdiction: Ireland
• Judge: Mr Justice Maurice Collins
• Judgment Date: 02 March 2022
• Neutral Citation: [2022] IECA 47
• Docket Number: Appeal Number: 2021/162
• Court: Court of Appeal (Ireland)

Between

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

Plaintiff/Respondent

and

Peter Rice, Sheila Rice, Gregory Rice, Angela Rice, Mark Rice and Ken Pattullo, in His Capacity as Trustee-In-Bankruptcy of Liam J Mallon

Defendants/Appellants

[2022] IECA 47

McCarthy J.

Ní Raifeartaigh J.

Collins J.

Appeal Number: 2021/162

THE COURT OF APPEAL

CIVIL

Statement of claim – Amendment – Bound to fail – Appellants appealing from the judgment and order of the High Court giving the respondent leave to deliver an amended statement of claim – Whether the amendment was necessary

Facts: The plaintiff/respondent, Mr Stafford (the Receiver), instituted proceedings in November 2013. The summons sought an order pursuant to s. 31 of the Land and Conveyancing Law Reform Act 2009 for the partition of the lands in Folios 7460 and 8260 Co. Meath as more particularly described in a contract for sale dated 24 September 2004 between the first to fifth defendants, Mr P Rice, Ms S Rice, Mr G Rice, Mr A Rice and Mr M Rice (the Appellants), and Mr Mallon as Vendors and Hollioake Ltd (the Company) as Purchaser (the Contract). In the alternative, it sought an order pursuant to s. 31 for the sale of the lands and the distribution of the proceeds of sale. It also sought such further or other order relating to the lands as might appear to be “just and equitable in the circumstances of the case”. In April 2014, a Statement of Claim was delivered seeking the same reliefs. The Statement of Claim referred to the Contract, pleaded payment by the Company and asserted that, pursuant to s. 52(1) of the 2009 Act, the entire beneficial interests in the lands had passed to the Company on the making of the Contract. Having referred to the financing of the purchase by AIB and the transfer of the facilities to the National Asset Management Agency, it then pleaded that the defendants remained in possession of the lands and by virtue of his appointment as receiver, the Receiver had an interest in the lands. An application to amend issued in August 2019. In December 2019 a different draft of the proposed Amended Statement of Claim was produced by the Receiver and a different draft again was produced in July 2020. Two groups of amendments were opposed by the Appellants. The first advanced a contractual claim, founded on Special Condition 9. The other amendments sought to make a claim in unjust enrichment. The Appellants appealed to the Court of Appeal from the judgment and order of the High Court (Simons J) ([2021] IEHC 235) giving the Reciever leave to deliver an Amended Statement of Claim. Counsel for the Appellants made essentially the same arguments in opposition to the disputed amendments as had been advanced unsuccessfully in the High Court. Regarding the breach of contract claim, the main battleground on appeal was whether the amendment should be permitted in circumstances which (according to the Appellants) involved the pleading of new facts and the making of a new claim and where, accordingly (so it was said), the amendment was not “necessary for the purpose of determining the real questions in controversy between the parties”. Regarding the unjust enrichment claim, the Appellants objected to that amendment on the basis that the claim was bound to fail.

Held by Collins J that no error on the part of the High Court Judge had been demonstrated and no basis for interfering with the order made by him had been established.

Collins J held that the appeal would be dismissed.

Appeal dismissed.

UNAPPROVED

NO REDACTIONS REQUIRED

Judgment of Mr Justice Maurice Collins delivered on 2 March 2022

BACKGROUND

1 The First to Fifth Defendants (“ the Appellants”) appeal from the judgment and order of the High Court (Simons J) ( [2021] IEHC 235) giving the Plaintiff leave to deliver an Amended Statement of Claim. The Appellants have also appealed the subsequent judgment and order of Simons J ( [2021] IEHC 344) giving the Plaintiff two-thirds of the costs of the amendment application as well as the costs of the costs application. However, by agreement the costs appeal has been left over and this judgment addresses the issue of amendment only.

2 The proceedings have their origin in a contract for sale dated 24 September 2004 between the Appellants and one Liam Mallon as Vendors and Hollioake Ltd (“ the Company”) as Purchaser (“ the Contract”) in respect of lands at Clonee, County Meath. More precisely, the Contract was for the sale of the 25 equal undivided one hundredth shares held by the Vendors in lands comprised in Folios 7460 and 8260 Co Meath, excluding a part of the lands in Folio 7460 which were to be retained by the Vendors. The purchase price was €4,600,000, payable in three parts. However in certain circumstances additional consideration might be payable (clause 16). The Company entered into a separate agreement (referred to as “ the Hughes Contract”) for the acquisition of the remaining 75% (undivided) interest in the lands in Folios 7460 and 8260.

3 The Contract identified four plots, each of which was to contain six sites for residential units (special condition 8(b)). What appears to have been contemplated by the Contract was that there would be a partitioning of the legal ownership of the lands in Folios 7460 and 8260 such that the Vendors (or some combination of them) would become sole beneficial owners of those four plots (special condition 8). The Company would develop those plots (as well as developing the lands the subject of the Hughes Contract) building a total of twenty four residential units, of which eight (two on each plot) would be Designated Units which would be delivered to the Vendors for an agreed price of €256,500 plus VAT (special condition 15). The remaining units would be sold and the Contract made provision (in special condition 9) for the execution by the Vendors of deeds of assurance in favour of the Company or its nominee in respect of such units.

4 The Contract provided in special condition 6(a) for the payment of €1 million on signing which was to be held by the Vendors' solicitors as stakeholder. Special condition 6(b) provided that on the date two months from the date of execution and delivery of the deeds of partition pursuant to special condition 8 (i.e. the deeds of partition necessary to ensure that the Vendors became sole beneficial owners of the four plots identified in special condition 8(b)), that initial sum would be released to the Vendors and a further sum of €1,270,980 would be payable to the Vendors, which would be released to them and not held by their solicitor as stakeholder. A mortgage or charge was to be executed over the Vendors' interests in the Special Condition 8(b) plots (excluding the Designated Units) to give protection to the Company. The balance of €2,329,020 was to be payable upon completion of the Designated Units, subject to the deduction of the agreed cost of construction of those Units.

5 On the execution of the Contract the Company paid the initial sum of €1,000,000. In due course, a deed or deeds of partition were executed pursuant to special condition 8. In June 2006 the further sum of €1,271,000 was paid by the Company. Those payments are not in dispute and in fact the Defendants in their Defence acknowledge that a further sum of €291,127.50 was discharged by the Company (this represents the value of the Designated Unit constructed by the Company, rather than an actual payment made to the Vendors).

6 It appears that the Company constructed and sold a number of houses on the lands and constructed and delivered one of the Designated Units. However, it then ran into financial difficulties. In December 2010, the Company's loans with AIB were transferred to the National Asset Management Agency (NAMA) and in September 2012 NAMA appointed Mr Stafford ( “the Receiver”) as receiver over the Company's assets. In these circumstances, the Company was unable to perform its obligations under the Contract and it appears from the papers that in 2010, proceedings for breach of contract were brought by the Defendants and Mr Mallon against both the Company and AIB. Those proceedings do not seem to have been progressed.

7 One further matter should be noted as it gives rise to one of the disputed amendments. Special Condition 9 of the Contract provides that immediately following the effecting of the partition specified in Special Condition 8, and provided that the Purchaser had made the payment due to the Vendors on foot of special condition 6(b), “the Vendor shall deliver to the Purchaser deeds of assurance of the plots of lands described in Special Condition 8(b), other than the Designated Sites”. That was subject to the proviso that the Purchaser could notify the Vendor not to deliver a deed of assurance in respect of any part or parts of the lands specified by the Purchaser. That was in turn subject to the further provisions of Special Condition 9 which it is unnecessary to recite here.

8 . On 19 May 2017 Hayes solicitors (who act for the Receiver in these proceedings) wrote to the solicitors for the Defendants, O'Hagan Ward & Co, referring to Special Condition 9 and asserting that, in light of the fact that the payment required to be made under Special Condition 6(b) had been made and given that the partition specified in Special Condition 8 had been effected (and Hayes noted that the Defendants had in their Defence in the proceedings specifically pleaded that the partition had been effected) the Defendants were required to deliver “deeds of assurance pursuant to Special Condition 9 of the contract.”

THE PROCEEDINGS

9 The Receiver instituted these proceedings in November 2013. The summons sought an order pursuant to section 31 of the Land and Conveyancing Law Reform Act 2009 for the partition of the lands in Folios 7460 and 8260 as more particularly described in the Contact. In the...