Keena v Coughlan

• Jurisdiction: Ireland
• Judge: Mr. Justice Quinn
• Judgment Date: 18 January 2019
• Neutral Citation: [2019] IEHC 12
• Court: High Court
• Docket Number: [2016 No. 11479 P.]
• Date: 18 January 2019

BETWEEN

MARIA KEENA

PLAINTIFF

AND

THOMAS COUGHLAN, RAY DONOVAN, MICHAEL DEMPSEY, PROMONTORIA (ARAN) LIMITED

AND

LUKE CHARLETON

DEFENDANTS

AND

BY ORDER SEAMUS WALSH

FIRST CO-DEFENDANT

AND

KILKENNY WALSH LIMITED

CO-DEFENDANT

[2019] IEHC 12

[2016 No. 11479 P.]

THE HIGH COURT

COMMERCIAL

Contract – Specific performance – Damages – Plaintiff seeking a declaration that there was an enforceable contract between her and the defendants – Whether the plaintiff had made out a prima facie case

Facts: The plaintiff, Ms Keena, claimed that on 21st November, 2016, she entered into a contract with the fourth and fifth defendants, Promontoria (Aran) Ltd and Mr Charleton, to purchase the Ard Rí Hotel in Waterford for a price of €1.6m. She claimed that the contract was entered into in a series of telephone conversations on that day between her representative, Mr Lanigan, and Mr Byrne, an employee of Cerberus European Servicing Advisors (Ireland) Ltd, who she claimed had authority to bind the fourth and fifth defendants. She claimed that this contract was evidenced in writing by a receipt for a deposit of 10% of the purchase price paid later that day, coupled with certain e-mails which followed payment of the deposit. On 30th November, 2016, her representatives were informed that she did not, in fact, have a binding contract and that the hotel was being sold to a different party. The hotel was sold later by the fifth defendant to the seventh defendant, Kilkenny Walsh Ltd. The plaintiff applied to the High Court seeking a declaration that there was an enforceable contract between her and the defendants for the sale of the hotel, an order for specific performance of that contract and certain other reliefs including damages in lieu of specific performance. At the time when the plaintiff claimed the contract was made, the property in suit was in the legal ownership of the first, second and third defendants, Mr Coughlan, Mr Donovan and Mr Dempsey. The fourth defendant was the holder of a legal charge over the property and had appointed the fifth defendant as receiver of the property. At the conclusion of the plaintiff’s evidence, the fourth, fifth, sixth and seventh defendants applied to dismiss the action. They claimed that even if the plaintiff’s evidence was accepted (which it was not), and taking the evidence of the plaintiff at its height the plaintiff had not made out a prima facie case in that the essential ingredients of a binding enforceable contract for the sale of the hotel had not been established and accordingly, that the action should be dismissed.

Held by Quinn J that, accepting the evidence of the plaintiff’s witnesses and taking it at its height, the plaintiff had not demonstrated that there was an agreement between her and any of the defendants in which the identity of the purchaser was known to the defendants, much less agreed.

Quinn J held that the plaintiff had failed to make out a prima facie case and that he would grant the application to dismiss.

Application dismissed.

JUDGMENT of Mr. Justice Quinn delivered on the 18th day of January, 2019

1 The plaintiff claims that on 21st November, 2016, she entered into a contract with the fourth and fifth-named defendants to purchase the Ard Rí Hotel in Waterford for a price of €1.6m. She claims that the contract was entered into in a series of telephone conversations on that day between her representative, a Mr. Bob Lanigan, and a Mr. Terry Byrne, an employee of Cerberus European Servicing Advisors (Ireland) Limited, who she claims had authority to bind the fourth and fifth-named defendants. She claims also that this contract was evidenced in writing by a receipt for a deposit of 10% of the purchase price paid later that day, coupled with certain e-mails which followed payment of the deposit. On 30th November, 2016, her representatives were informed that she did not, in fact, have a binding contract and that the hotel was being sold to a different party. The hotel was sold later by the fifth-named defendant to the seventh-named defendant, Kilkenny Walsh Limited.

2 In these proceedings, the plaintiff seeks a declaration that there is an enforceable contract between her and the defendants for the sale of the hotel, an order for specific performance of that contract and certain other reliefs including damages in lieu of specific performance.

3 At the time when the plaintiff claims the contract was made, the property in suit was in the legal ownership of the first, second and third named defendants. The fourth named defendant was the holder of a legal charge over the property and had appointed the fifth named defendant as receiver of the property.

4 At the conclusion of the plaintiff's evidence, the fourth, fifth, sixth and seventh-named defendants made this application to dismiss the action. They claim that even if the plaintiff's evidence is accepted (which it is not), and taking the evidence of the plaintiff at its height the plaintiff has not made out a prima facie case in that the essential ingredients of a binding enforceable contract for the sale of the hotel have not been established and accordingly, that the action should be dismissed.

5 The principles governing an application of this nature are well established and the court is informed by the judgments of the Supreme Court in Hetherington v. Ultra Tyre Service Limited & Ors[1993] 2 I.R. 535 and O'Toole v. Heavey[1993] 2 I.R 544.

6 In O'Toole v. Heavey, Finlay C.J. outlined the rules which should be applied in a case where in an action either in tort or contract, at the conclusion of the evidence of the plaintiff, a defendant seeks a dismissal of the action on the basis that a case has not been made out. He summarised the position as follows:–

‘1. If an action is brought either in tort or contract against one defendant only, and if at the conclusion of the evidence for the plaintiff the defendant applies for a dismiss, then it seems appropriate that the trial judge should inquire from the defendant as to whether in the event of a refusal of that application the defendant would intend to go in to evidence.

2. If, as occurred in the present case, the indication given by counsel in making the application is that, if refused, his client intends to go into evidence, then, it seems to me that the issue which has been raised as a matter of law before the trial judge is to reach a decision as to whether the plaintiff has made out a prima facie case…

3. If upon applying for a non-suit at the conclusion of the plaintiff's case, in a case where one defendant only has been sued, it is indicated that the defendant does not intend, if the application is refused, to go into evidence, then, in effect, the learned trial judge is being asked to determine the following question, which is: having regard to his view of the evidence of the plaintiff, whether the plaintiff has (that being the only evidence before him) established as a matter of probability the facts necessary to support a verdict in his favour. Unless he is so satisfied, he must dismiss the action; if he is so satisfied it appears to me that he must give judgment for the plaintiff…

5. Where more than one defendant is sued and where claims or cross-claims for contribution have been made between the defendants on the basis that they are joint tort-feasors the trial judge should not, it seems to me, decide on an application for a non-suit made at the conclusion of the plaintiff's evidence unless he is completely satisfied that the eventual outcome of the case could not result in the patently unjust anomaly that a plaintiff having sued more than one defendant and one of the defendants having been dismissed out of the action at the conclusion of the plaintiff's evidence, the other defendant or defendants could escape liability by affixing blame through their evidence on the defendant already dismissed.

The only way, apparently, in most instances that a trial judge could satisfy himself that such a risk did not exist would be by ascertaining what the intention of all the defendants was in relation to the calling of evidence and the precise nature of the case which each of them would be making in the event of giving such evidence.

In the case, of course, where a plaintiff has not made out any form of plausible or arguable case against any of the defendants, it must remain clearly within the discretion of a judge to dismiss the action in its entirety at that stage.’

7 In Mooreview Developments Limited & Ors v. First Active plc[2009] IEHC 214, Clarke J. (as he then was) cited with approval the jurisprudence which he described as well settled and which was summarised in Delaney & McGrath on Civil Procedure in the Superior Courts where they state:–

‘In general the question of whether a party has discharged the burden of proof upon him by proving his case on a balance of probabilities is decided, once, at the conclusion of the case by the trier of fact. However, an issue will not even reach the trier of fact for this adjudication if a party fails to satisfy the evidential burden placed upon him to make out a prima facie case. Whether a party has done this can be tested by a defendant by means of an application to dismiss the plaintiff's case after it has concluded…on such an application the question for the trial judge is whether, assuming that the trier of fact was prepared to find that all the evidence of the plaintiff was true and taking the plaintiffs case at its highest, the defendant has a case to meet.’

8 The learned judge then cited the Supreme Court decisions in Hetherington and O'Toole and continued his quote from Delaney & McGrath as follows:–

‘If the defendant indicates that he does intend to go into evidence if the application is refused, then the trial judge has to decide whether the plaintiff has made out a prima facie case. If, on the other hand, the defendant indicates that he does...