Mahon v Dawson & O'Connor
| Jurisdiction | Ireland |
| Judge | Mr. Justice Feeney |
| Judgment Date | 02 May 2006 |
| Neutral Citation | [2006] IEHC 331 |
| Judgment citation (vLex) | [2006] 5 JIC 0202 |
| Court | High Court |
| Docket Number | [1849P/2004] |
| Date | 02 May 2006 |
[2006] IEHC 331
THE HIGH COURT
BETWEEN
AND
FINLAY v MURTAGH 1979 IR 249
ROBINSON v HARMAN 1884 1 EX 850
DORAN v DELANEY (NO2) 1999 1 IR 303
DUFFY v RIDLEY PROPERTIES LTD UNREP FINLAY-GEOGHEGAN 7.10.2005 2005/18/3596
MALHOTRA v CHOUDHURY 1980 CH 52
MCGREGOR DAMAGES 17ED
Professions - Solicitor’s negligence - Assessment of damages - Damages as in breach of contract case - Mitigation of damage - Quantum of damages
The plaintiff sued his solicitor in both contract and tort. After the second day, it was conceded on behalf of the defendants that liability was admitted and the case proceeded on the basis of an assessment only. It was accepted by the parties that the appropriate principle to applied in relation to the assessment of damages was an award of damages as in a breach of contract case.
Held by Feeney J. that the plaintiff was entitled to an award of damages of Eur778,834.
Reporter: R.W.
The plaintiff in this case is a farmer who resides in Ballitore in Co. Kildare. He is a man in his early 60's who, with the assistance of his family, has built up an extensive farming business. The plaintiff, together with his wife and two sons, and with the paid assistance from two brothers of the plaintiff, operates lands situated at 19 different locations. The plaintiff's immediate family owns lands at six of those locations, amounting to approximately 320 acres and rents or leases some 1,300 acres. The farming activities extend over a wide and varying range, including dairy farming, cattle, sheep and tillage.
The events which give rise to this action arise from an option which the plaintiff was given by James O'Neill on the 6th November 1996 to purchase some 65 acres of land at Bull Hill, Calverstown, in the county of Kildare. The option could be exercised for a stated price within a period of five years and also required the payment of 10 per cent of the price at the time that the option was exercised.
In October 2001, approximately four weeks before the option period would lapse, the plaintiff, through his agent, an accountant, sought to have the option exercised. The instructions to the defendant firm were confirmed by the attendance of the plaintiff's wife and son at the defendant solicitors' office on 22 October 2001. At that point in time sufficient funds were available and physically to hand to enable the 10 per cent deposit to be paid. Funds to cover the entire purchase price were also available as a result of the sale of some land.
The option was not validly exercised. The validity of the exercise of such option was contended for, both through Circuit Court proceedings and an appeal to the High Court. The Circuit Court, judgment which was reaffirmed in the High Court, concluded that the option had not been validly exercised and therefore the plaintiff did not obtain the benefit of being able to purchase the lands in question at the agreed price.
It was initially contested within these proceedings, both in the defence and through counsel during the first day of the case that liability remained in issue. However, during the course of the second day's hearing it was conceded on behalf of the defendants that liability was admitted and that the case could proceed on the basis of an assessment only.
The claim herein is pursued both in breach of contract and in negligence. The entitlement to sue a solicitor both in negligence and in breach of contract has been clearly established in this jurisdiction since the Supreme Court decision inFinlay v. Murtagh (1979) IR 249.
During the submission by counsel for the parties it was accepted on behalf of both plaintiff and the defendants that the appropriate principle to be applied in relation to the assessment of damages was an award of damages as in a breach of contract case. That is to say, an award that is primarily designed to put the plaintiff in the same situation as if the contract had been performed. This approach was succinctly identified in the words of Parke, B (inRobinson v. Harman) (1884) 1 EX 850 at 855:
'The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation with respect to damages as if the contract had been performed.'
That is the approach which I will follow in assessing the appropriate damages to be awarded to the plaintiff. In this case it results in the court adopting an approach that but for the admitted negligence of the defendants, the plaintiff would have been able to purchase the 65 acres, the subject matter of the option, at the stated price and would by the end of the year 2001 have been the owner of that land.
The court, therefore, has to seek to place the plaintiff in the same position as if he were the owner of those 65 acres as of the end of 2001. That approach is also informed by the statement of Geoghegan J. inDoran v. Delaney (No. 2) (1999) 1 IR 303 at 308:
'If a party to a contract breaks that contract, the other party is entitled to be compensated on the basis of what he has lost by reason of the contract not being performed.'
In submissions, counsel on behalf of both parties referred to the High Court decision of Geoghegan J. inDoran v. Delaney (No. 2) and also to the unreported judgment of Ms. Justice Finlay Geoghegan in Duffy v. Ridley Properties Limited and Another (Judgment delivered on the 7th day of October 2005).
As a result of the negligence in this case, the plaintiff did not own 65 acres of agricultural land which he should have owned as of the end of 2001. Therefore the court in seeking to place the plaintiff in the same position - so far as money can do it - as if the contract had been performed, must seek to compensate the plaintiff on the basis that he should have a sum of money sufficient to enable him to be the owner of 65 acres of similar agricultural land. In carrying out this exercise the court must also have regard to the obligation to mitigate damage and to a number of other matters identified in the authorities.
In considering the issue of mitigation of damage, the court must have regard to the matters identified inDoran v. Delaney (No. 2) to the effect that a loss is not too remote if it could have been reasonably within the contemplation of the parties at the time of entering into the contract or committing the breach of duty, and that the prima facie measure of damage is not appropriate where it would be reasonably foreseeable that the person damnified would, as a consequence of impecuniosity, be unable to mitigate the loss until recouped by the offending party. It is to be noted that in Doran v. Delaney (No. 2) the court ultimately held that the plaintiff in that case must recover a sufficient sum to enable them to acquire a four bedroom house which they had intended to build, together with all other foreseeable losses with the cost of that house being as at the date of the judgment.
The defendants in their submissions seek to rely on the statement of Cumming-Bruce L.J. inMalhotra v. Choudhury (1980) CH 52 at p. 51 where he stated:
'It is unfair to the defendant that the deliberation with which the plaintiff moved from the middle of 1975 until he issued the present proceedings in January 1977 should be allowed to enhance the damage which the defendant has to pay the plaintiff if the price level of real property has risen during that period. For my part, I would think that justice is done between them by holding that the plaintiff did not sufficiently mitigate his damage by proceeding with greater celerity in the various and difficult legal convolutions that he has been forced to undergo. The right order is that for the purposes of valuation of Novar (the property in question) and the loss sustained by the plaintiff by the failure of the defendant to honour the contract for sale, the terminal date by reason of delay should be moved back from October 20 1977 to October 21st 1976.'
That quotation is quoted by Ms. Justice Finlay Geoghegan inDuffy v. Ridley Properties Limited and Another and whilst she does not in any way suggest that it is not an appropriate adjustment to consider, she determined on the facts in that case that she should not make any adjustment of the nature for stated reasons. I am also of...
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