Keegan Quarries Ltd v McGuinness

• Jurisdiction: Ireland
• Judge: Ms. Justice Finlay Geoghegan
• Judgment Date: 09 December 2011
• Neutral Citation: [2011] IEHC 453
• Court: High Court
• Date: 09 December 2011

Keegan Quarries Ltd v McGuinness

BETWEEN

KEEGAN QUARRIES LIMITED

PLAINTIFF

AND

MICHAEL MCGUINNESS AND MARIE MCGUINNESS

DEFENDANTS

[2011] IEHC 453

[No. 861 P/2011]

[No. 19 COM/2011]

THE HIGH COURT

Abstract:

Land Law - Conveyancing - Fraudulent transfer - Misrepresentation - Quarry - Fraudulent intent - Void transfer - Lands - Reliance - Innocence - Losses - Causation - Land and Conveyancing Law Reform Act 2009 - Whether transfer void

Facts: The plaintiff claimed damages for fraudulent or negligent misrepresentation and/ or breach of warranty in a contract for the purchase and sale of lands. The claim was for an order pursuant to s. 74 Land and Conveyancing Law Reform Act 2009, declaring void a transfer to the second named defendant. The plaintiff claimed that the first named defendant had fraudulent represented that the Quarry on the lands was operated as a quarry prior to 1964, which was now agreed to be untrue. The question arose as to the reliance on the misrepresentation in the decision of the plaintiff to enter the contract and complete the purchase. It was alleged that the false representation of pre-1964 operation was made innocently in reliance on what the first named defendant had been told.

Held by Finlay Geoghegan J. that Keegan Quarries was induced to enter into the contract by several inducements relating to the quarry and would not have entered into the contract otherwise. Keegan Quarries was entitled to recover a net amount of Eur 5.5 million in respect of the purchase price. The claim as to Stamp Duty the Court would consider further and the claim as to Imputed Interest on the funds of the Plaintiff the Court would not allow Keegan Quarries had failed to establish that the losses suffered by it by reason of the quarrying and the cost of other proceedings and restoration of the lands were caused by the misrepresentation. They had failed to establish how the representations as to pre-1964 quarrying formed a basis to commence in 2007 the type of quarrying carried out thereafter without planning permission. On breach of warranty, the first named defendant was in breach of warranty. Fraudulent intent had been proven and an order would be made declaring void the transfer pursuant to the Act of 2009

Reporter: E.F.

1 1. The plaintiff's claim against the first named defendant ("Mr. McGuinness") is for damages for fraudulent, or, in the alternative, negligent misrepresentation and/or damages for breach of warranty in a contract dated 24 ^th January, 2007, between them for the purchase and sale of lands at Hilltown Little, County Meath ("the Lands").

2 2. The plaintiff's claim against the first and second named defendants is for an order pursuant to s. 74 of the Land and Conveyancing Law Reform Act 2009, declaring void the transfer by Mr. McGuinness to the second named defendant ("Mrs. McGuinness") in 2010, of his interest in lands at Bellewstown, County Meath, comprised in Folios 24022F and 16421F of the Register of Freeholds, County Meath.

Background

3 3. Mr. John Keegan ("Mr. Keegan") is the managing director of the plaintiff ("Keegan Quarries"). He has worked in the quarry industry for approximately thirty years, initially as a sole trader, and then incorporated Keegan Quarries in 1994. Its business is quarrying and the manufacture of ready-mix concrete. Its head office is located in County Meath.

4 4. Mr. McGuinness and his brothers purchased Hilltown farm in 1986, comprising approximately 365 acres which had previously formed part of the estate of the Boylan family. Mr. McGuinness went to live on the lands in 1989 and bought out his brothers in 2001. He farms primarily in grain.

5 5. On 26 ^th April, 2005, Mr. McGuinness made contact with Mr. Keegan to see if he was interested in purchasing a quarry on part of his lands at Hilltown Little ("the Quarry"). They met at the Quarry on that day.

6 6. On 27 ^th April, 2005, Mr. McGuinness lodged an application to Meath County Council pursuant to s. 261 of the Planning and Development Act 2000, for registration of the Quarry. In that application, he stated, inter alia, that the Quarry had been in operation prior to 1 ^st October, 1964.

7 7. By letter of 14 ^th October, 2005, Mr. McGuinness was notified by Meath County Council of the registration of the Quarry and sent a copy of the proposed public notice.

8 8. In November 2005, Keegan Quarries and Mr. McGuinness entered into a conditional contract for the purchase and sale of the Quarry and adjacent lands at Hilltown Little. The price was €2.7 million. A deposit of €50,000 was paid and released to Mr. McGuinness. The contract for sale was conditional upon the plaintiff obtaining planning permission for an operational quarry, the erection of a ready-mix concrete plant and block yard; and a specified new entrance on the public road, together with a roadway to service the quarry on or before 1 ^st November, 2007.

9 9. Keegan Quarries did not apply for planning permission and, as it was entitled to do, in April 2006, rescinded the 2005 contract. In May 2006, Mr. McGuinness returned the deposit of €50,000.

10 10. On 19 ^th December, 2006, Mr. McGuinness received a letter dated 15 ^th December, 2006, from Meath County Council informing him of its decision to impose conditions on the Quarry pursuant to s. 261(6)(a)(i)of the Act of 2000. A draft schedule of conditions was enclosed and he was informed submissions might be made on same within six weeks.

11 11. There was renewed contact between Mr. McGuinness and Mr. Keegan in relation to the Quarry after receipt of the letter in December 2006 or January 2007. There is a dispute as to precisely how this occurred. Save in relation to credibility, nothing turns on this.

12 12. Meetings were held between Mr. Keegan and Mr. and Mrs. McGuinness at their home on the evenings of 11 ^th and 16 ^th January, 2007. It is primarily during those meetings that the alleged misrepresentations are said to have been made. Oral agreement on a sale for €6.8m was reached on 16 ^th January, 2007. The terms were revised to €7.0m on 22 ^nd January, 2007.

13 13. On 24 ^th January, 2007, Keegan Quarries and Mr. McGuinness entered into a contract for the purchase and sale of approximately 30 acres at Hilltown Little, including the Quarry ("the Lands"), in consideration of €7 million. Special condition 9 provided that the Lands were sold with the benefit of Meath County Council's letter dated 15 ^th December, 2006.

14 14. On 9 ^th February, 2007, the sale of the Lands was completed. Keegan Quarries as it was entitled to do pursuant to the Contract made submissions to Meath County Council on the draft conditions in the letter of 15 December 2006. Final conditions were imposed by Order on 23 ^rd April 2007.

15 15. Keegan Quarries commenced works on the Lands and commenced quarrying in purported compliance with the conditions specified by Meath County Council pursuant to s. 261 of the Act of 2000. There is significant dispute as to whether the quarrying operations were in compliance with such conditions.

16 16. On 11 ^th February, 2008, Mr. Jonathan Pierson and others, nearby residents, issued proceedings against Keegan Quarries, seeking an order pursuant to s. 160 of the Act of 2000, restraining Keegan Quarries from using its lands at Hilltown Little as a quarry and other consequential relief. The applicants contended, inter alia, that the lands at Hilltown Little were not used as a quarry prior to 1964; in planning terms, that it did not have a pre-1964 use as a quarry.

17 17. On 27 ^th March, 2008, Mr. McGuinness swore an affidavit in support of Keegan Quarries, setting out his knowledge of the history of the use of the Quarry.

18 18. On 8 ^th December, 2009, Irvine J. gave judgment on a preliminary issue in the Pierson proceedings [2009] IEHC 550, in favour of the applicants.

19 19. In May 2009, Mr. McGuinness suffered a serious accident when he fell from a height and broke both his legs. This required protracted treatment, including several operations which appears to have lasted until June 2010. He gave oral evidence in the Pierson proceedings in July 2010.

20 20. On 5 ^th September, 2007, Mr. McGuinness had transferred the Hilltown farm from his sole name to the joint names of himself and Mrs. McGuinness. On 15 ^th July, 2010, he transferred his remaining interest in the Hilltown farm to Mrs. McGuinness.

21 21. In the judgment in the Pierson proceedings [2010] IEHC 404, 7 ^th October, 2010, Irvine J. decided that Keegan Quarries' lands at Hilltown Little were not used as a quarry prior to 1964, and that the applicants therein were entitled to an order pursuant to s. 160 of the Act of 2000, restraining Keegan Quarries from using its lands at Hilltown Little as a quarry. Pursuant to the judgment, the Court, on 21 ^st December, 2010 made a formal restraining order to that effect, an order requiring Keegan Quarries to restore the lands to the condition they were in as of February 2007, and an order for costs against Keegan Quarries.

22 22. Keegan Quarries commenced these proceedings on 28 ^th January 2011. They were admitted to the Commercial List on 7 ^th February 2011.

Agreed Statement of Facts

23 23. The above background is a chronology of the major facts giving rise to these proceedings which, save where indicated, are not in dispute. The parties agreed on the following written statement of facts for the purposes of these proceedings.

2 "1. There was no quarry on the lands the subject matter of these proceedings (the "Lands") and quarrying was not carried out on the Lands or on any adjacent lands prior to 1 ^st October 1964.

2 The First Defendant did not carry out any quarrying of any significance on the Lands prior to 1989.

3 The First Defendant quarried rock on the Lands...