Michael Begley v Damesfield Ltd
| Jurisdiction | Ireland |
| Judge | Donnelly J.,Faherty J.,Ní Raifeartaigh J. |
| Judgment Date | 19 March 2021 |
| Neutral Citation | [2021] IECA 78 |
| Year | 2021 |
| Court | Court of Appeal (Ireland) |
| Docket Number | [Record No. 2018/168] |
and
and
[2021] IECA 78
Donnelly J.
Faherty J.
Ní Raifeartaigh J.
[Record No. 2018/168]
THE COURT OF APPEAL
Damages – Breach of contract – Liability – Appellant seeking to appeal against order awarding respondent damages against appellant – Whether appellant was liable for breaching terms of collateral contract
Facts: The High Court (Baker J) found that there was a breach of a collateral contract by the appellant, Mr Lally. The appellant appealed and submitted, inter alia, that the trial judge erred in finding the appellant bound by such a collateral contract and that a claim for breach of collateral contract was not adequately pleaded by the respondent, Mr Begley, against the appellant. The Court of Appeal gave judgment on the 26th of June 2020, holding that there was sufficiently cogent evidence before the trial judge to support her finding that a collateral contract existed between the respondent and the appellant, and finding that the High Court had no jurisdiction to reach a finding as to the existence of a collateral contract in circumstances where no such claim had been advanced by the plaintiff and consequentially there had been no opportunity for the appellant to address the issue of a collateral contract, in particular by way of legal submissions. The Court of Appeal allowed the appeal. The appellant submitted that there should be no remittal to the High Court on two grounds: (a) that it would be unfair where the High Court would not be able to consider the issue of collateral contract afresh and without constraint in light of the finding of the Court of Appeal; and (b) that the pleadings would have to be amended thereby requiring new facts to be alleged and such a claim would be statute barred. The appellant sought his appeal costs in line with O. 99 rr. 1 and 4 of the Rules of the Superior Courts, submitting that costs follow the event. The respondent relied upon the relevant provisions of the Legal Services Regulations Act 2015. The respondent submitted that High Court costs should be left over to the High Court to determine. The appellant sought his costs, or at least part of them, as he had won so comprehensively on most of the claims of the respondent.
Held by the Court of Appeal that the interests of justice required the remittal to the High Court: first, the question of whether there was a collateral contract, and a breach of it, was the real issue of controversy between the parties; secondly, the appellant’s main claim of prejudice was that the Court of Appeal had given its opinion that there was sufficient evidence to establish a collateral contract, but that argument had been rejected; thirdly, the appellant’s claim that to remit would be a breach of requirement for finality in proceedings was rejected as inconsistent with the views expressed in MacDonncha v Minister for Education [2018] IESC 50. 29. The Court of Appeal considered that the most just way of proceeding with the case was to remit the matter to the High Court, permit the respondent to amend his pleadings to include a plea of breach of collateral contract and permit the appellant, should he so chose, to plead the Statute of Limitations.
The Court of Appeal held that the appellant had won the appeal in so far as he had successfully overturned the finding of breach of collateral contract and the award of damages made against him. Therefore, the Court held that that the appellant should succeed in being awarded the costs of the appeal, to include the additional costs of the written and oral submissions in relation to the remittal and costs. The Court considered that the general rule “in actions for damages where a retrial has been ordered is that costs follow the event in relation to both trials, and the question of the costs of the first trial are dependent on the outcome of the retrial” as identified in MK v JPK (No 3) (Divorce: Currency) [2006] IESC 4, applied. The Court therefore reserved the issue of the High Court costs for determination by the High Court at the conclusion of those proceedings. It was the view of the Court of Appeal that there should be a stay of execution on the award of costs until the determination of the proceedings.
Appeal allowed.
JUDGMENT of the Court delivered on the 19 th day of March 2021
. This Court gave judgment in the matter on the 26th of June 2020 last. The trial judge had found that there was a breach of a collateral contract by the appellant. The appellant appealed and submitted, inter alia, that the trial judge erred in finding the appellant bound by such a collateral contract and that a claim for breach of collateral contract was not adequately pleaded by the respondent against the appellant.
. In disposing of the submissions made, the Court made the following two relevant findings:-
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(a) At paras. 65 and 66, the Court held that there was sufficiently cogent evidence before the trial judge to support her finding that a collateral contract existed between the respondent Mr. Begley and the appellant Mr. Lally;
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(b) At para. 99, the Court found that the High Court had no jurisdiction to reach a finding as to the existence of a collateral contract in circumstances where no such claim had been advanced by the plaintiff and consequentially there had been no opportunity for the appellant to address the issue of a collateral contract, in particular by way of legal submissions.
. Pursuant to those findings the Court decided to allow the appeal. The Court adjourned the matter to permit two further issues to be considered in advance of any final order being made. Written and oral submissions were made in respect of the following:-
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(a) Whether the matter should be remitted to the High Court pursuant to the provisions of Order 86A Rule 3(1) of the RSC; and
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(b) What orders should be made by the Court in respect of the costs of the appeal and the costs of the action in the High Court.
. Order 86A Rule 3(1) of the Rules of the Superior Courts provides as follows:-
“Following the hearing of an appeal, the Court of Appeal may remit proceedings to the High Court with such directions as it considers just.”
. The appellant submitted that no order for remittal should be made. Although he raised a number of grounds in his written submissions, he distilled his points of objection to two distinct grounds:-
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(a) The appellant cannot now be guaranteed a fair re-trial of the issue of the collateral contract when this Court, according to his submission, has already made a finding that there was sufficient evidence before the High Court to conclude that a collateral contract existed between the parties to the appeal;
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(b) The respondent should not be permitted at this remove to amend his Statement of Claim where it would require new facts to be alleged and a new plea to be advanced and where the claim arising on foot thereof would otherwise be statute-barred.
. By the time of the oral hearing on the issue of remittal, the parties were in agreement that the decision of the Supreme Court in MacDonncha v. Minister for Education [2018] IESC 50, was the relevant authority on the issue of remittal to the High Court when an appeal is allowed against a judgment given on the basis of a point neither pleaded nor raised during the hearing. In that case the single issue was remitted so that it could be dealt with before a different judge.
. The decision in MacDonncha is authority for the proposition that even where a judgment is given on a point neither pleaded nor raised during the hearing the matter may be remitted to the High Court in appropriate circumstances. MacDonncha concerned judicial review proceedings for which the Rules make plain that an applicant's case must be pleaded clearly and explicitly. The applicant succeeded in the High Court on a point that was not specifically pleaded and was not considered at the hearing in specific terms. The judge had held the matter was ultra vires and although vires had been alluded to in argument on a number of occasions, the explicit point as determined by the judge was not raised at the High Court hearing.
. The Supreme Court held this was not a matter of mischance which had led to a departure from fairness. The Supreme Court ruled as follows:-
“28. In circumstances such as these, the Court must balance the rights of the parties. There is here a simple concept of audi alteram partem and fair procedures. Under the Rules of the Superior Courts, and as a matter of fair procedure a party must be entitled to know the precise case that is being pleaded against them. But, bearing in mind the elapse of time and other considerations, it would be unfair if the case were now to be determined by this Court simply on the basis of some procedural deficiency or a pleading point, which had not been raised in the High Court and had not been properly addressed by either side. This is a question of striking the right balance in fairness and outcome.
The Order
29. The order of the Court will refer to the second applicant only. No order can be made in relation to the first applicant at this time, and until the proceeding is reconstituted. In the circumstances, the Court will order that the judgment and order of the High Court, with regard to the second applicant, be set aside on the ‘third issue’, that is, the finding that the Minister acted ultra vires s.15(6) of the 2001 Act. As a matter of fair procedure, it is necessary that this single issue be reheard in the High Court before a different judge. Accordingly, this sole question of vires will be remitted back to the High Court for re-argument.
30. It will be necessary to file an amended statement of grounds pleading this one specific issue of vires explicitly, but no other issue. The...
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