Keohane v Hynes & Duncan (t/a Duncan Grehan & Partners)
| Jurisdiction | Ireland |
| Judge | Mr. Justice Hedigan |
| Judgment Date | 15 October 2009 |
| Neutral Citation | [2009] IEHC 601 |
| Docket Number | Record No. 4225P/2006 |
| Court | High Court |
| Date | 15 October 2009 |
BETWEEN:
[2009] IEHC 601
THE HIGH COURT
PRACTICE & PROCEDURE
Strike out
Reasonable cause of action - Inherent jurisdiction of court - Preliminary issue - Whether action should be struck out, stayed or dismissed on basis of being bound to fail - Rules of the Superior Courts 1986 (SI 15/1986) O19, r 28; O 122 r 11 - Barry v Buckley [1981] IR 306 and Goodson v Grierson [1908] 1 KB 761 applied - Application granted (2006/4225P - Hedigan J - 15/10/2009) [2009] IEHC 601
Keohane v Hynes & Duncan (t/a Duncan Grehan & Partners)
The applicant is a businessman who has brought proceedings against the first and second named defendant claiming damages for breach of contract, negligence, negligent and/or fraudulent misrepresentation and breach of statutory and/or fiduciary duty.
The first named defendant is also a businessman with whom the plaintiff claims to have contracted, on the 27th of September 2000, for the sale of 90 of the 100 shares of a limited liability company, namely Lawayo Ltd. It is the plaintiff's case that the first named defendant agreed to pay the plaintiff a total sum of IR£1,000,000 in respect of these shares, which sum was to be paid in the following installments; IR£400,000 was to be paid within 28 days of the signing of the contract; IR£500,000 was to be paid on the 31st of March 2001; and a final IR£100,000 was to be paid within three years of the signing of the contract.
The second named defendant is a solicitor who acted for the plaintiff in respect of the aforementioned contract and at whose offices the written instrument was signed on the 27th of September 2000. The plaintiff alleges variously that the second named defendant:-
(a) Failed to read out the entire document to the plaintiff;
(b) Represented to the plaintiff that there were no other relevant terms to the agreement;
(c) Failed to inform the plaintiff that he was in fact contracting with a third party company, namely Studley Investments Ltd., and not the first named defendant personally;
(d) Failed to adequately alert the plaintiff to the nature of the agreement;
(e) Failed to provide the plaintiff with a copy of the agreement at the time it was signed;
(f) Failed to inform the plaintiff that the agreement was in breach of section 60 of the Companies Act1963 (as amended) ('the 1963 Act'), in that it involved a loan from Lawayo Ltd. to Studley Investments Ltd. for the purchase of shares in the former company;
(g) Failed to include mechanisms in the agreement to ensure that the monies due thereunder would be paid to the plaintiff;
(h) Failed to complete the share transfer as contemplated by the agreement;
(i) Failed to ensure that the monies due under the agreement were in fact paid to the plaintiff; and
(j) Breached a representation and warranty made to the plaintiff that the second named defendant would ensure that the monies owed under the agreement would be paid in full and on time.
4. The second named defendant seeks the following, by way of a preliminary application to this Court:-
(a) An order pursuant to Order 19 Rule 28 of the Rules of the Superior Courts ('the Rules') and/or the inherent jurisdiction of the Court striking out the plaintiff's claim on the basis that it discloses no reasonable cause of action;
(b) In the alternative, an order pursuant to the inherent jurisdiction of this Court, dismissing the plaintiffs' claim on grounds that it was brought following a period of inordinate and inexcusable delay; or
(c) In the alternative, an order pursuant to Order 122 Rule 11 of the Rules of the Superior Courts ('the Rules'), dismissing the plaintiffs' claim for want of prosecution.
5. In 1996, the plaintiff purchased lands for development in County Wexford, During 1997, the first and second named defendant arranged a loan with Bank of Ireland to finance the development which ultimately commenced in or around the end of that year. The parties thus entered business together. Two limited liability companies were incorporated to facilitate this process: Lawayo Ltd. was created on the 18th of October 1997 as a property holding and sales company while Kilrane Developments Ltd. was established on the 14th of November 1997 as a construction company.
6. During 1999 and 2000, the plaintiff developed considerable misgivings as to the operation of the development. He communicated these concerns to the first named defendant who in late August 2000 contacted the plaintiff with a view to purchasing his interest therein. A series of meetings were held between the plaintiff, who was accompanied by an acquaintance, and the first named defendant at the first named defendant's home in Dublin and at another property of his in County Wexford.
7. On the of 27th September 2000, the plaintiff entered into a contract for the sale of 90 shares in Lawayo Ltd. This agreement, despite the plaintiff's averments as to his belief at the time it was concluded, is plainly and unequivocally between the plaintiff and Studley Investments Ltd.
8. It seems that a limited quantity of correspondence took place between the plaintiff and the defendants in the months and years that followed the finalisation of the contract. The plaintiff maintains that he actively pursued the sums of money which were due and owing to him thereunder. On the 14th of December 2001, a specialist financial adviser, Mr. Brian Little, was appointed a director of both Lawayo Ltd. and Kilrane Developments Ltd. at an extraordinary general meeting on the 14th of December 2001.
9. On the 17th of August 2002, the plaintiff wrote to the second named defendant on the subject of the agreement. The letter included the following extract:-
"My understanding of the agreement, drawn up by yourself and signed in September 2000, is that I am to dispose of my 90% shareholding in Lawayo for IR£900,000 to Studley Investments. I am awaiting payment of the balance of the share purchase price from that company."
10. At around this time, an apparently unrelated investigation was conducted into the affairs of Lawayo Ltd. and Kilrane Developments Ltd. by the Garda Bureau of Fraud Investigation. This appears to have concluded in...
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Keohane v Hynes
...inherent jurisdiction of the Court. Hedigan J. acceded to that application and dismissed the proceedings: (See Keohane v. Hynes & anor [2009] IEHC 601). Mr. Keohane appealed to this Court against that finding. It also appears that Hedigan J. made an order striking out as being bound to fail......