Leopardstown Club Ltd v Templeville Developments Ltd

• Jurisdiction: Ireland
• Judge: Denham C.J.,Mr. Justice John MacMenamin
• Judgment Date: 11 July 2017
• Neutral Citation: [2017] IESC 50
• Court: Supreme Court
• Docket Number: [Appeal No. 67/2015],[S.C. No. 67 of 2015]
• Date: 11 July 2017

BETWEEN:

THE LEOPARDSTOWN CLUB LIMITED

PLAINTIFF/APPELLANT

AND

TEMPLEVILLE DEVELOPMENTS LIMITED

AND

PHILIP SMYTH

DEFENDANTS/RESPONDENTS

[2017] IESC 50

MacMenamin J.

Denham C.J.

McKechnie J.

MacMenamin J.

Dunne J.

O'Malley Iseult J.

[Appeal No. 67/2015]

THE SUPREME COURT

Administrative & constitutional law – Appeal – Role of appellate court – Review of jurisprudence – Dispute over whether party entitled to terminate settlement agreement on basis of misrepresentation – Article 34.5 of Constitution

Facts: The respondents held a lease for parts of the appellant’s racecourse which was signed in 1998. The relationship between the parties was fraught and there had been considerable litigation between them. A mediated settlement agreement (“MSA”) was made on in October 2011, but further acrimony occurred and the High Court granted the appellant a declaration that the MSA was in force and was not void for mistake as alleged by the respondents. The matter came before the Court of Appeal on the basis that the High Court was wrong to reject the first respondent’s entitlement to rescind the MSA on the ground of misrepresentation. The Court of Appeal allowed the appeal on that point and the matter was remitted to the High Court. The appellant now sought to challenge that decision of the Court of Appeal.

Held by Denham CJ, the other Justices concurring and MacMenamin J also handing down a judgment, that the appeal would be allowed. At the heart of the appeal was the role of an appellate court having considered the relevant jurisprudence. Having considered arts 34.5.3 and 34.5.4 of the Constitution, the role of the Supreme Court and its supervisory jurisdiction was detailed. Based on the decision in Hay v O’Grady [1992] IR 210, the Court was persuaded that the Court of Appeal had exceeded its jurisdiction by overturning the findings of fact by the trial judge. In respect of the alleged misrepresentation, as there was evidence to support the judge’s findings, the submission would fail. Hay v O’Grady [1992] IR 210, Gahan v Boland [1985] ILRM 218 applied.

Judgment delivered the 11th day of July, 2017 by Denham C.J.

1 This is an appeal by Leopardstown Club Limited, the plaintiff/appellant, referred to as “Leopardstown”, from the judgments delivered on the 28th July, 2015, by the Court of Appeal and the order of the 15th October, 2015.

2 The defendants/respondents, Templeville Developments Limited and Philip Smyth are referred to collectively as ‘Templeville’, and when necessary Philip Smyth is referred to separately as ‘Mr. Smyth’. The Court of Appeal allowed the appeal of Templeville against the order of the High Court (Charleton J.), which dismissed their counterclaim.

3 This Court has given leave to Leopardstown to appeal against the decision of the Court of Appeal.

Background Facts

4 I gratefully adopt the description of the basic facts as set out by Hogan J. in his judgment in the Court of Appeal. Leopardstown is the owner of Leopardstown race course. Racing takes place on the course on approximately 25 days in the year. Leopardstown has begun to diversify activity.

5 Mr. Smyth is the principal shareholder and a director of Templeville. Templeville has had a business relationship with Mr. Smyth since the 1970s.

6 On the 1st January, 1998, Leopardstown granted Templeville a 35 year lease of certain of the lands and premises of the racecourse. Mr. Smyth is a party to the lease as surety for the payment of the rent. In June, 1998, Leopardstown and Templeville entered into further agreements supplemental to the lease. This included a licence over some lands, and payments and a licence relating to parking arrangements at the racecourse on race days. As Hogan J. recorded, to that end Leopardstown entered into a lease with Templeville over certain parts of the land in the early 1980s. There was a further lease in 1993, and a lease in 1998, and a licence in 1998.

7 Templeville took possession of certain lands for the purpose of constructing a sports club, the West Wood Club, and facilities, including a cafeteria. Templeville arranged for the construction of eleven tennis courts, seven of which were indoor in Dome No. 2, and the remaining courts to be outdoor courts.

8 Hogan J. noted that the relationship between the parties has nearly always been strained and fractious, and that there have been a number of legal disputes between the parties.

9 In September, 2011, there were nine major items of actual or threatened litigation between the parties. The parties then entered a complex mediation process. This mediation resulted in the Mediated Settlement Agreement on 26th October, 2011, which is referred to as ‘the MSA’.

10 The MSA is a written agreement between Leopardstown, Templeville and Mr. Smyth. It includes maps and a solicitor's note of 26th October, 2011. The maps were prepared by Arup Engineers. A series of maps numbered 1000 were prepared, then a 2000 series, and ultimately the parties used a 5000 series of maps, with numbers 5001, 5002 and 5003 being attached to the MSA. The maps were signed by the parties. A consultant to Arup, Mr. Ian Roberts, was primarily responsible for the preparation of the maps.

11 The MSA was received and made a rule of court in proceedings, 2004 No. 10825, on 3rd November, 2011. In accordance with the MSA, Templeville was to make certain payments to Leopardstown. The initial payment was made. But by 2012 the relations between the parties had deteriorated.

12 By February, 2012, there were a number of disputes between the parties. There were alleged breaches by both parties.

13 On the 10th July, 2012, Leopardstown issued proceedings seeking a declaration that the MSA remained in full force. Leopardstown also sought judgment for a liquidated sum, allegedly monies due and owing, damages and other reliefs.

14 Pleadings were entered, the proceedings advanced, and the case was listed for hearing in the Commercial Court on the 11th June, 2013.

15 Hogan J. records the sequence:-

‘On the 24th May, 2013 [Templeville] delivered a proposed amended defence and counterclaim and were given liberty to do so pursuant to an order of the trial judge, Charleton J., on the second day of the trial, i.e., the 12th June, 2013. The amended defence and counterclaim pleaded for the first time the claim of [Templeville] which, as it happens, is now the only issue on the appeal. The new claim was that by furnishing a map used in the negotiations leading to the MSA and referred to in the MSA, Leopardstown had misrepresented that a site which pursuant to the MSA was to be endorsed on the lease from Leopardstown to Templeville ‘was not matrially affected by an underground ESB cable’. It was further pleaded that [Templeville] relied upon the said representation which was false in entering into the MSA and are now entitled to rescind the MSA.’

16 It was also pleaded that the MSA was voidable at the instance of Templeville for mistake.

17 In an amended defence, delivered on the 13th June, 2013, Leopardstown denied the alleged misrepresentation and mistake. It was pleaded that Templeville, its servants and agents and experts, were aware of both the ESB cables, including the cable traversing part of the site prior to the execution of the MSA. It was also pleaded that Templeville were not entitled to void the MSA.

The High Court

18 The case was at hearing before the High Court for fourteen days. There were fifteen witnesses for Leopardstown and nine for Templeville. On the 2nd September, 2013, the High Court gave judgment for Leopardstown against Templeville: Leopardstown Club Ltd v. Templeville Developments Ltd [2013] IEHC 526. There were further hearings and findings. On the 14th November, 2013, in the final order, the High Court dismissed Templeville's counterclaim, except in respect of relief against forfeiture.

19 There were a number of key findings. On the issue of misrepresentation, mistake and the agreement Charleton J. held:-

‘64. Mistake and the agreement

Templeville and Philip Smyth complain that the mediation settlement agreement was undermined by misrepresentation by Leopardstown as to a transverse 220 kV oil-surrounded ESB cable that ran through the site of the seven new tennis courts that would be covered by a dome or domes. A brief word about this cable may put this matter in context. There are two cables running through the Leopardstown campus. One of them, which transverses the seven tennis courts site, is apparently there since the 1970s. This is the transverse cable. The second one, which goes along the edge of the car park and Dome 2 skirting the seven tennis courts site, was laid by the ESB in 2000 and commissioned in 2001. This is the skirting cable. Dome 2 was originally planned much closer to the new seven tennis courts site than it now sits. It was moved by Templeville so as to ensure that its foundations missed any cable. This dome now sits as to its foundations as close as just under 3 m to such a cable. These domes need an air pumping system. These sit outside the line of the foundations of the dome and push air inside. One of the air pumping stations in Dome 2 is over a cable. This establishes knowledge by Templeville that this cable existed and that no dome could be built above it or, according to the ESB position, no foundation could be laid within 5 m of it. Philip Smyth gave evidence that he thought that what was happening in 2000/2001 was that the ESB was decommissioning the original transverse cable, which is the inner cable for these purposes, and replacing it as to function with the skirting cable. This evidence is improbable. In addition, apart from all of this, it should be noted that on the site of the seven tennis courts there are three side-by-side ESB manhole covers, clearly marked with a lightning symbol. This establishes to anyone...