Kiernan Milling Unlimited Company v Kiernan trading as P. Kiernan Farms Also trading as Kiernan Farms (Aherlow) Also trading as Kiernan Farms (Granard)
| Jurisdiction | Ireland |
| Judge | Ms. Justice Eileen Roberts |
| Judgment Date | 21 July 2023 |
| Neutral Citation | [2023] IEHC 442 |
| Court | High Court |
| Docket Number | 2022 No. 5297P |
[2023] IEHC 442
2022 No. 5297P
THE HIGH COURT
JUDGMENT of Ms. Justice Eileen Roberts delivered on 21 July 2023
. This judgment deals with two separate motions.
. The first motion is the plaintiff's motion seeking summary judgment against the defendant in respect of part of a sum claimed in plenary proceedings which issued on 18 October 2022. This motion is described in this judgment as the “ Summary Judgment Motion”.
. The second motion dealt with in this judgment is the plaintiff's motion for an interlocutory Mareva injunction against the defendant in respect of the proceeds of sale of properties marketed for sale by the defendant. This motion is described in this judgment as the “ Mareva Motion”.
. The plaintiff is an unlimited company having its registered address at Granard, Co. Longford. It carries on the business of the supply of animal feed.
. The defendant is a pig farmer who trades under the various names of P. Kiernan Farms, Kiernan Farms (Aherlow) and Kiernan Farms (Granard).
. The parties have been engaged in a commercial relationship for many years whereby the plaintiff has supplied animal feeds and grain and associated agricultural product to the defendant for use in his business. The defendant was at one time the vice chairman of the plaintiff company, which is a family business, but he is no longer involved with the plaintiff company in any way.
. On 18 October 2022 the plaintiff issued these plenary proceedings against the defendant seeking, inter alia, judgment in the sum of €3.4 million against the defendant. This sum is sought on foot of the alleged default on the defendant's part of a settlement agreement entered into between the parties on 27 July 2018 relating to proceedings bearing High Court record numbers 2014/2851S, 2014/2852S, 2014/2853S and 2014/2854S (the “ Settlement Agreement”).
. The plenary proceedings also seek judgment in the sum of €4 million against the defendant for the supply of animal feed to him by the plaintiff. In the alternative, damages are sought for breach of contract. The plenary proceedings also seek an injunction restraining the defendant from dealing with certain identified properties. This latter relief is considered under the Mareva Motion below.
. The plaintiff now seeks, by notice of motion dated 3 November 2022, to recover the sum of €3.4 million arising from the Settlement Agreement by way of the summary judgment, thereby carving out that aspect of the claim from the plenary proceedings. It is accepted by the plaintiff that the balance of the monies sought, which relate to the supply of product to the defendant, must properly be determined by way of plenary hearing.
. In 2014 the plaintiff issued four sets of summary proceedings (the “ 2014 Proceedings”) seeking to recover monies from the defendant relating to the supply of animal feed and assorted agricultural input goods, loan facilities and other commercial matters related to the defendant's business. The combined total of the sum sought in the 2014 Proceedings was in the region of €15.5 million. The 2014 proceedings were compromised by way of the Settlement Agreement.
. Given the importance of the Settlement Agreement to the Summary Judgment Motion, I propose to set out the material terms in full:
“4. The Defendants, and each of them will consent to a Judgment in the sum of €5.4 million with a stay on entry and execution provided the under noted terms are complied with in full;
(a) the Defendants to pay the sum of €500,000 from the proceeds of the sale of Corbally Farms, Downpatrick County Down within 7 days of the date of closing and in any event to be no later than 30th September 2018.
(b) €3 million to be paid by quarterly instalments of €125,000 commencing on the 1st October 2018 and continuing thereafter quarterly until the sum of €3 million is discharged in full.
(c) Should the defendants fail or default in the payment of any one quarterly payment in the sum of €125,000 the Plaintiffs shall be entitled to enter and execute the Judgement in the sum of €5.4 million less any quarterly payments already made.
(d) Upon full compliance with the payment schedule set out in B above, the Plaintiff confirms that the Defendants are released from their obligations under this agreement and the entire debt is deemed to be fully discharged.”
. Clause 8 of the Settlement Agreement confirmed that it embodied the entirety of the agreement and understanding as between the parties. Specifically, the clause provided that “[A]ny variation in the Terms of Settlement shall be in writing and be signed by or on behalf of each party”.
. The parties to the Settlement Agreement agreed that the terms of settlement would be made a rule of court. By Order of the High Court dated 10 October 2018, by consent, it was ordered that the Settlement Agreement annexed to the Order as a schedule “ be received and filed and made a rule of Court”. The Order did not however state that judgment was entered against the defendant, even though the Settlement Agreement itself provided that the defendant “… will consent to a Judgment in the sum of €5.4 million…”. The plaintiff accepts therefore that it cannot rely on the Order dated 10 October 2018 to enforce judgment against the defendant.
. In accordance with the Settlement Agreement, the defendant made the initial payment of €500,000 on time on 8 October 2018. Furthermore, the defendant commenced the quarterly payments of €125,000 and maintained these payments up until and including 30 June 2021. Therefore, by 30 June 2021, total payments of €2million had been made by the defendant on foot of the Settlement Agreement.
. The defendant failed to make the payments due in September 2021, December 2021, March 2022, June 2022 and September 2022. In those circumstances the plaintiff claims that in accordance with clause 4 (c) of the Settlement Agreement (quoted above), it is entitled to enter and execute judgment against the defendant for the entire balance due on foot of the Settlement Agreement in the amount of €3.4 million – being the total settlement of €5,400,000 less €2 million already paid by the plaintiff. The plenary proceedings which issued on 18 October 2022 included a claim in these terms and it is that aspect of the plenary proceedings in respect of which judgment is now sought in a summary manner.
. In its defence and counterclaim dated 10 May 2023, the defendant alleges that the Settlement Agreement was varied by the parties in or about August 2021. It is expressly pleaded at para 25 of the defendant's counterclaim that in 2021, the parties agreed to vary and did in fact vary the Settlement Agreement so as:
“(a) to suspend the Quarterly Payments; and
(b) to make any suspended Quarterly Payments payable in quarterly instalments at the end of the term of the agreement (i.e., post October 2024) unless previously discharged by the defendant”.
. It is pleaded that the said variation was evidenced in writing and that it represented to the defendant (a representation the defendant relied on) that the plaintiff would not seek to rely on the suspension of Quarterly Payments to seek immediate payment of €3.4 million under the Settlement Agreement (para 29(b) and para 30 of Counterclaim).
. Mr Mark Kiernan on behalf of the plaintiff avers in his affidavit sworn 2 November 2022 at para 10 that the defendant indicated to the plaintiff that
“ as a result of him trying to “build up” his farms that he would not be in a position to make the quarterly payments due under the settlement agreement until such time as his pigs were suitably fattened and ready for the abattoir. This can take some time to come to pass. It was made clear by Kiernan Milling that any accommodation would not be an acquiescence of its position under the settlement agreement and that when Padraig Kiernan's business was fully progressed that he was to make good the deficient payments and recommence the discharge of the obligations under the settlement agreement. That was accepted by Padraig Kiernan who indicated on several occasions to his contact in Kiernan Milling, Sean McGlynn that he would catch up on the terms and regularise the repayment schedule”.
. The payments did not recommence. A letter was issued by the plaintiff's solicitors to the defendant on 15 July 2022 and a formal letter of demand issued on 10 October 2022.
. In his affidavit sworn 14 February 2023 the defendant, Padraig Kiernan, avers at para 9 that “… in the summer of 2021, it was agreed by the parties that the payments due under the Settlement Agreement would be suspended”. He said that the context was the Covid-19 pandemic. He further avers at para 10 that “[I]nstead of being paid on the dates provided for under the Settlement Agreements, the suspended quarterly payments were to be paid on the same quarterly basis at the end of the period provided for in the Settlement Agreement i.e. October 2024.”
. His affidavit confirms that a draft agreement was prepared, and this is exhibited at exhibit PK2 to his affidavit. He says at paragraph 11 that “[ W]hen the draft was prepared, it was thought that two quarterly payments would be the ones not paid as it seemed in the summer of 2021 that the impact of COVID-19 would recede”.
. It is common case that the draft agreement (which appears to have been prepared by the defendant's solicitors in August 2021) was never signed. That draft recites the provisions of the Settlement Agreement and reflects that “ the...
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