Leopardstown Club Ltd v Templeville Developments Ltd
| Jurisdiction | Ireland |
| Judge | Mr. Justice Gerard Hogan |
| Judgment Date | 28 July 2015 |
| Neutral Citation | [2015] IECA 164 |
| Date | 28 July 2015 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Appeal No. 2014/1159 [Article 64 transfer] |
[2015] IECA 164
Appeal No. 2014/1159
[Article 64 transfer]
THE COURT OF APPEAL
Settlement agreement – Misrepresentation – Damages – Appellants seeking to appeal against determination of the trial judge dismissing counterclaim to rescind Mediated Settlement Agreement by reason of misrepresentation by respondent – Whether trial judge in error in failing to consider appellants” counterclaim for misrepresentation in accordance with law
Facts: The plaintiff/respondent, Leopardstown Club Ltd, is the owner of Leopardstown race course. The second defendant/appellant, Mr Smyth, is the principal shareholder and director of the first defendant/appellant, Templeville Developments Ltd. Leopardstown and Mr Smyth have had a business relationship in relation to the running by Mr Smyth of a sports club at the racecourse since the 1970s. The parties entered into a mediation process in September, 2011 which led to a Mediated Settlement Agreement (MSA) being entered into between the parties in October, 2011. It comprised a written agreement between the parties, maps and a solicitor”s note. In June, 2012, Templeville informed Leopardstown that it had elected to terminate the MSA with immediate effect because of an alleged fundamental breach of the MSA by Leopardstown. Leopardstown issued proceedings in July, 2012, seeking a declaration that the MSA remain in full force, judgment for liquidated sums allegedly due and other consequential reliefs including damages. The defendants pleaded in an amended defence and counterclaim that Leopardstown, by furnishing a map (Arup drawing 5002) in the course of negotiations leading to the execution of the MSA, represented that the ‘New Site’ was not materially affected by an underground ESB cable; that the representation was false; that it was made with an intention that the defendants should rely on it and that the defendants did in fact rely upon it when executing the MSA. The defendants pleaded that they were entitled to rescission or in the alternative damages. They also pleaded that the MSA was voidable by reason of common mistake and also pleaded in relation to breach of warranties by the plaintiff. The trial judge found that Mr Smyth was not a credible witness and found in favour of the plaintiff and against the defendants on all issues. In February 2014, the defendants appealed to the Supreme Court with multiple grounds of appeal. This was transferred to the Court of Appeal pursuant to Article 64 of the Constitution in October, 2014. The appeal was confined to the determination of the trial judge dismissing the counterclaim to rescind the MSA by reason of the misrepresentation by Leopardstown in Arup map 5002. The appellants contended that the trial judge was in error in failing to consider their counterclaim for misrepresentation in accordance with law. Leopardstown disputed that the trial judge was in error in his approach to the determination of the relevant issues. It relied upon the findings of fact made by him, in particular the lack of credibility of Mr Smyth and the inferences drawn and submitted that the Court of Appeal in accordance with Hay v O”Grady [1992] 1 IR 210 should not interfere with the findings of fact made by the trial judge.
Held by Finlay Geoghegan J that, in accordance with the authorities, the relevant question for determination was whether Templeville and Mr Smyth had actual and complete knowledge of the true situation in 2011 at the time of entering into the MSA. Finlay Geoghegan J held that the onus on the issue of actual and complete knowledge was on Leopardstown and that it did not appear that it could be considered as discharged by the credibility findings of the trial judge.
Finlay Geoghegan J held that the appeal against the dismissal by the trial judge of the counterclaim, on grounds of misrepresentation, be allowed. Finlay Geoghegan J remitted to the High Court for retrial before a different judge the single issue on the counterclaim and the defence thereto in relation to the alleged misrepresentation by Leopardstown.
Appeal allowed.
The plaintiff (‘Leopardstown’) is the owner of Leopardstown racecourse. While the racecourse has been functioning as such since 1888, the growth of the south Dublin region means that the racecourse is now surrounded by a built up area immediately adjacent to the M50 motorway. Although racing takes place on the course on 25 days in the course of the year, the owners of the racecourse have endeavoured for some time to ensure that this important site is put to active use throughout the entire year.
The second named defendant (‘Mr. Smyth’) is the principal shareholder and a director of the first named defendant (‘Templeville’). As the owner of the racecourse Templeville has had a business relationship with Mr. Smyth since the 1970s. Initially Mr. Smyth was given the exclusive right to operate what was then a squash court at the racecourse. Templeville now runs a fitness, health and leisure centre known as the West Wood Club at the premises.
On 1st January 1998 Leopardstown granted Templeville a 35 year lease of the certain lands and premises of the racecourse premises. Mr. Smyth is a party to the lease a surety for the payment of the rent. In June 1998 Leopardstown and Templeville entered into further agreements supplemental to the lease, including making provision for a licence over certain other lands and payments and a licence relating to parking arrangements at the racecourse on racedays.
To that end the plaintiff entered into a lease with the first defendant (‘Templeville’) over certain parts of the land in the early 1980s. There was a further lease in 1993 and, prior to the events which we are about to describe, the relationship between the parties was governed by the grant of a lease in 1998 and a further licence in that year. Templeville is in fact totally controlled by Mr. Philip Smyth and he is the guarantor of the lease.
The net effect of these arrangements was that Templeville took possession of certain lands for the purposes of constructing a sports club (known as the West Wood club) and other facilities, including a cafeteria. During this period Templeville arranged for the construction of some eleven tennis courts, seven of which were indoor courts situate within a structure known as ‘Dome No. 2’. The other courts were outdoor courts.
It is only fair to say that the relationship between the parties has nearly always been strained and fractious, much of it caused by disputes relating to access and car parking. While this might seem unimportant — even frivolous — both sides apparently considered that car access and car parking were of considerable importance to the manner in which they both did business on the Leopardstown campus.
At all events this strained relationship has given rise to a large volume of highly complex litigation over the last decade or so. Other difficulties arose from the fact that Leopardstown had reached an agreement with Dún Laoghaire-Rathdown County Council to effect a land swap in order to facilitate the construction of the M50 motorway. This had also given rise to a major arbitration hearing before Paul Gardiner S.C. in 2008. In his arbitration award Mr. Gardiner S.C. directed that Leopardstown transfer some 5 acres to Templeville to compensate it for the land lost as a result of the construction of the M50 motorway. This award was itself also the subject of complex litigation before the High Court. In an exceptionally detailed and complex judgment — running to over 400 pages — delivered in January 2010 Edwards J. had set aside that award, but that judgment was itself under appeal to the Supreme Court.
The details of these various earlier disputes are not particularly germane to the present appeal, save to say that by September 2011 there were some nine major items of actual or threatened litigation outstanding between the parties. Some of this litigation had come to a head and was due to be heard by the High Court in November 2011. The parties at that point engaged in an elaborate mediation process under the auspices of another leading Senior Counsel (Paul Gallagher SC) who acted as mediator. That mediation process was engaged in over seven days starting on 27th September 2011 and it culminated in what has been described as the Mediated Settlement Agreement (‘MSA’) on 26th October 2011.
The MSA comprises a written agreement entered into between Leopardstown, Templeville and Mr. Smyth and includes certain maps and a solicitor's note of the same date. The maps were prepared by Arup Engineers and are central to this appeal. A series numbered 1000 were prepared at the outset of the mediation. A 2000 series followed, but the parties ultimately used the 5000 series maps with maps numbered 5001, 5002 and 5003 being attached to the MSA. These maps were signed by the parties for identification purposes. A consultant to Arup, Mr. Ian Roberts, was the person primarily responsible for the preparation of the maps. I will deal separately with the evidence given to the High Court by Mr. Roberts later in this judgment.
The MSA was received and made a rule of court in proceedings between the parties (2004 No. 1082S) on 3rd November 2011. Pursuant to the MSA, Templeville was to make certain payments to Leopardstown and the initial payment was duly made. Unfortunately, however, by early 2012 the relationship between the parties had broken down again.
By late February 2012, there were allegations and counter allegations which it is not necessary to describe for the purposes of...
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...approach to the drawing of adverse inferences was also adopted by Hogan J. in Leopardstown Club Ltd v. Templeville Developments Ltd [2015] IECA 164, who stated at para. 108 of his judgment that the ‘starting point is that a court should generally be reluctant to draw an inference from a fai......