Killerk Ltd -v- Shane Houlihan, [2009] IEHC 358 (2009)

Docket Number:2009 925 S
Party Name:Killerk Ltd, Shane Houlihan
Judge:Kelly J.

THE HIGH COURTCOMMERCIAL 2009 925 SBETWEENKILLERK LIMITEDPLAINTIFFANDSHANE HOULIHANDEFENDANTJUDGMENT of Mr. Justice Kelly delivered on the 16th day of July, 2009 BackgroundOn 15th June, 2007, a contract was executed between the plaintiff and the defendant under which the plaintiff agreed to construct the Tipperary Town Shopping Centre on behalf of the defendant.Under the terms of clause 6.1 of that agreement, the defendant agreed to pay 12,200,000 plus VAT for the work in three stages.An initial payment of 50,000 plus VAT was payable on the signing of the agreement. A second sum of 10,650,000 plus VAT was to be paid on the completion of the floor slabs, walls and roof of the building provided that such sum would not be payable by the defendant prior to 1st September, 2007.A third sum of 1,300,000 plus VAT was to be paid on the date of completion of the development. It is this sum which is the subject of the plaintiff's claim.The aforesaid stage payment sums did not take into account the payment of retention money of 200,000 which fell to be paid in accordance with clause 4.6 of the contract. That clause provided, in effect, for release of the retention monies twelve months following the issue of the certificate of practical completion if all defects and other faults had been remedied.The defendant paid the 50,000 and VAT upon the signing of the agreement and the further sum of 10,650,000 and VAT on 18th October, 2007 following the completion of the structural elements of the building.Possession and occupation of the building and its common areas was provided to the defendant in September 2007.The architects appointed under the contract issued a certificate of practical completion on 21st September, 2007.On 13th December, 2007, the plaintiff's solicitors wrote to the defendant's solicitors enclosing the final contractual documents which were scheduled to that letter and sought payment of 1,300,000 plus VAT of 175,500 in accordance with the terms of the contract. The letter of demand acknowledged that there were some snagging items outstanding but recited that it had between agreed between the parties that the retention sum of 200,000 would be adequate to cover any of those.The defendant has not paid the 1,300,000 and VAT and resists this application for summary judgment. In addition he has brought an application pursuant to s. 5 of the Arbitration Act 1980, seeking to stay these proceedings so that they may be referred to arbitration.I heard the application to stay and the application for summary judgment at a single hearing and this is my adjudication upon both applications.Section 5 ApplicationBoth sides have filed lengthy affidavits with enormous quantities of exhibits, much of the details of which have little to do with the issues which fall for determination on the two applications before me.The defendant seeks to have these proceedings stayed having regard to clause 9.2 of the agreement of 15th June, 2007. That provides as follows:- "Save and except where a specific dispute mechanism is provided for elsewhere in this agreement, if any dispute arising out of this agreement cannot be settled amicably between the parties within ten working days after written notice that such a situation exists, then, at the election of either party the matter shall be referred and finally resolved by arbitration. Any such arbitration shall be governed by the Arbitration Acts 1954 - 1998 as amended from time to time." That there is a dispute between the parties concerning a whole variety of issues which fall within the ambit of the arbitration clause cannot be denied having regard to the voluminous correspondence dealing with allegation and counter allegation concerning defective works of one sort or another. The real issue for determination on this application is whether the referral of these disputes to arbitration should preclude the plaintiff from being able to recover judgment and execute for it in respect of the final payment of 1,300,000 plus VAT provided for at clause 6.1.3 of the agreement.Summary JudgmentThe agreement of 15th June, 2007 is not in a standard form. That is not surprising given the fact that a third party, a Mr. Michael Woodlock is a party to the agreement. He is...

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