Knockacummer Wind Farm Ltd v Cremins

CourtCourt of Appeal (Ireland)
JudgeMR. JUSTICE MICHAEL PEART,Ms. Justice M�ire Whelan,Mr. Justice Gerard Hogan
Judgment Date30 July 2018
Neutral Citation[2018] IECA 252
Date30 July 2018
Docket NumberNeutral Citation Number: [2018] IECA 252
- AND -



[2018] IECA 252

Peart J.

Whelan J.

Hogan J.

Peart J.

Hogan J.

Whelan J.

Neutral Citation Number: [2018] IECA 252

Record Number: 2016/205


Settlement agreement – Construction – Rectification – Appellants seeking to appeal against a decision of the High Court – The construction of a settlement agreement and the court’s power of rectification

Facts: The High Court (Haughton J), in a comprehensive judgment delivered on the 19th February 2016, held for the plaintiff/respondent, Knockacummer Wind Farm Ltd, on the construction of a settlement agreement, ruling that a particular option conferred on the parties by that agreement was not operable until the year 2042. The defendants/appellants, Mr and Ms Cremins, appealed to the Court of Appeal against that decision. The appeal raised complex questions relating to the construction of the settlement agreement and the court’s power of rectification.

Held by Hogan J that the 2012 agreement contained what amounted to an omission in that it did not in terms address the question of when the purchase option may be exercised. In those circumstances the task of the court was to seek to give the agreement an objective interpretation and to construe it as a whole, employing for that purpose standard principles of construction. Hogan J held that, while the 2012 agreement contained no express prohibition on the exercise of the purchase option by the defendants prior to 2042, this was nevertheless implied by the provisions of clause 6 and, in part, clause 6.2.3 and clause 6.3. Any other conclusion would render these special provisions inoperable, since they pre-suppose a knowledge of both market practice and prevailing rents for windfarm leases as they will obtain in 2042. This implies that the purchase option (and the corresponding lease back option) cannot be exercised by the defendants prior to that date. Hogan J held that the only exception to this is where the plaintiff exercises its right to issue an acceleration notice prior to that date and then only by reason of an express provision which permits it do it at any time prior to 2042. The very fact that the plaintiff had been given such an express right and no such right was given to the defendant with regard to the purchase option reinforced the conclusion that the defendant may only exercise the purchase option in 2042. Hogan J held that he would vary the order of Haughton J and grant an order of rectification in respect of clause 1 from the 22nd June 2042 to the 31st August 2042. He would similarly direct the rectification of the date for the lapse of the purchase option (if not already exercised) contained in clause 2.3.i from the 23rd April 2042 to the 1st September 2042. If the agreement was rectified in this manner, then the potential discrepancies in relation to both the purchase option date, the date on which this option would otherwise lapse and the ninety day notice requirement identified by Haughton J in his judgment simply disappear.

Hogan J held that, subject to that variation, he would otherwise affirm the decision of the High Court in respect of the construction of the agreement. So far as the other issues arising in this appeal were concerned, Hogan J agreed with the judgment which Peart J delivered. Hogan J also agreed with the judgment which Whelan J delivered regarding the construction of s. 82(1)(b) of the Land and Conveyancing Law Reform Act 2009 and the findings concerning Ms O’Connell, but he could not agree with her conclusions regarding the interpretation of the contract and the rectification issue.

Appeal dismissed.


I gratefully adopt the description of the general background to these proceedings which is contained in the judgment which is about to be delivered by Mr Justice Hogan. I agree with his conclusions as to the proper construction of the 2012 settlement agreement, and the order which he proposes in relation to rectification. I am also in agreement with the conclusions reached by Ms. Justice Whelan in relation to the exercise of the purchase option by Mr Cremin alone in the light of s. 82(1)(b) of the Land and Conveyancing Act, 2009, and her conclusion that time is not of the essence in relation to the exercise of the lease back option by the company.


My separate judgment relates to a particular finding made by the trial judge. That issue does not arise directly from any issue specifically raised in the pleadings, but is, nevertheless, a significant matter which arose from the evidence given at trial by the solicitor acting for the defendants in relation to the transaction generally, and it has been raised as a ground of appeal by the appellants in their notice of appeal. The solicitor in question was not a party to the proceedings – merely a witness called by the defendants.


At paragraph 3(b) of their notice of appeal the appellants state that the trial judge erred in law and/or on mixed questions of law and of fact by finding that the defendant's solicitor, Aoife O'Connell, knew that the absence of a start date for the exercise of the buy back option in the Option Agreement was a mistake, and failed to alert her opposite number in the transaction, Mr Roberts, to that fact. They submit that this conclusion was unsupported by the evidence given by Ms. O'Connell, and furthermore that she was not given a fair opportunity to refute the suggestion that she knew that it was a mistake, since it was never put to her during cross-examination.


As I say, that conclusion was not central to how the Option Agreement should be correctly construed, but it is a finding from which the reasonable inference can be drawn that at a time prior to the execution of the Option Agreement by her clients Ms. O'Connell failed to alert Mr Alan Roberts, the solicitor acting for Knockacummer, to the fact that she and her clients considered that, as drafted by him, the agreement permitted the buy back option to be exercised at any time prior to 2042, and that she knew that this was not his understanding and intention given the conversation that she had had with him on the 30th May 2012. Without putting a tooth in it, it is a finding that infers some sharp practice on the part of Ms. O'Connell. The appellants have argued that such a finding against her would need to be supported by clear evidence, and reached only after she was given a fair opportunity to address and respond to what was alleged, should she choose to do so. The appellants have argued that there was no such clear evidence, and also that it did not seem that this particular matter would be the subject of a finding by the trial judge, particularly having regard to a particular intervention by the trial judge during the course of Ms. O'Connell's direct evidence. I will come to that in due course.


As recorded by Mr Justice Hogan in his judgment herein, the Purchase Option and Lease option arrangements arose from the Terms of Agreement executed by these parties on the 22nd May 2012 by which earlier proceedings (Record Number:2013/6468P) had been compromised. Clause 1 thereof was in the following terms:

‘The defendant will within seven days hereof execute a Contract for Sale of the Lands (details of which Lands are more particularly set out on the attached schedule) with the closing date of 1 month from today's date (or such longer period as the parties' solicitors shall agree). The sale of the lands to the plaintiff's shall be subject to: (a) a buyback option after 30 years in favour of the defendants for €1.00, and (b) (should the defendants exercise such buyback option) an option in favour of SWS for a 25 year lease of the Lands on the terms of existing Leases subject to statutory amendment, subject to a market rent being fixed by a valuer nominated by the President, at the time, of the I.A.V.I.. The defendants shall execute all documents necessary to give effect to this provision.’ [Emphasis provided]


Mr Roberts undertook the task of drafting the Option Agreement in respect of the buy-back option and lease back option referred to in the agreed terms of settlement. There was some dispute in the High Court as to whether he volunteered to do so, or whether he was asked by Ms. O'Connell to do so. Nothing turns on the answer to that issue on which both Mr Roberts and Ms. O'Connell disagreed.


The buy-back option was, according to the settlement agreement, to be exercised after 30 years i.e. not before May 2042. As can be seen from the judgment of Mr Justice Hogan, the buy-back option as drafted provided that in consideration of €1, SWS granted to the Cremins the option to purchase ‘on the Purchase Option Date which was defined as being ‘the earlier of (i) 22nd June 2042 or (ii) in circumstances where SWS serves an Acceleration Notice, the date which is 150 days after the date of service of the Acceleration Notice’. Since no Acceleration Notice was served, the relevant date is 22nd June 2042. The Option Agreement went on to provide that the option would lapse if not exercised by that date (I am overlooking a question of whether the date 23rd April 2042 stated in clause 2.3 is an error. It does not affect the particular issue that I am dealing with).


The relevant controversy for my purposes arises from the fact that Mr Roberts understood, and the trial judge so found, that the purchase option was drafted by him in a way that was intended to enable the Cremins to exercise the buy-back option only after 30 years, consistent with what was stated in the settlement agreement.


However, after that draft was furnished by Mr Roberts to Ms. O'Connell, and before the Cremins had executed same, Mr Cremins had sought advice from Ms. O'Connell as to whether by the...

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2 cases
  • Sean Harris v Promontoria (Aran) Ltd and Stephen Tennant
    • Ireland
    • Court of Appeal (Ireland)
    • 15 June 2021
    ...only because of that common understanding.” 90 . The doctrine was also considered by Whelan J. in Knockacummer Windfarm Ltd. v. Cremins [2018] IECA 252: “135. …The appellants rely on Hodge, “Rectification, the modern law and practice governing claims for rectification for mistake”, 2nd Ed.,......
  • Martin v O'Keeffe
    • Ireland
    • High Court
    • 12 March 2021
    ...was exercised.” This case was quoted with approval in a recent decision of the Court of Appeal in Knockacummer Limited v Cremins & Anor [2018] IECA 252. In that case Whelan J stated “General rules with regards to interpretation of contracts 37. Contracts are to be construed objectively in a......
1 books & journal articles
  • Equity and the Law of Trusts in Ireland (7th edition) by Hilary Biehler
    • Ireland
    • Hibernian Law Journal No. 19-2020, January 2020
    • 1 January 2020
    ...25 [2017] IESC 70. 26 Biehler (n 1) 805–806. 27 [2016] IEHC 28. 28 [2005] 2 IR 54 (HC). 29 (2016) 339 ALR 200 30 Biehler (n 1) 851. 31 [2018] IECA 252 174 ellen o’callaghan be established in order to succeed in a claim for rectiication on the grounds of unilateral mistake. here is also subs......

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