Moorview Developments v First Active Plc

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 31 July 2008
• Neutral Citation: [2008] IEHC 211,[2008] IEHC 274
• Court: High Court
• Docket Number: [2003 No. 9018 P]
• Date: 31 July 2008

Moorview Developments Ltd & Ors v First Active Plc & Ors

BETWEEN

MOORVIEW DEVELOPMENTS LIMITED, SALTHILL PROPERTIES LIMITED, VALEBROOK DEVELOPMENTS LIMITED, SPRINGSIDE PROPERTIES LIMITED, DRAKE S.C. LIMITED, MALLDRO S.C. LIMITED, THE POPPINTREE MALL LIMITED AND BLONDON PROPERTIES LIMITED

PLAINTIFFS

AND

FIRST ACTIVE PLC AND RAY JACKSON AND BY ORDER BERNARD DUFFY

DEFENDANTS

AND LINKED PROCEEDINGS

[2008] IEHC 211

[No. 9018 P/2003]

THE HIGH COURT

PRACTICE AND PROCEDURE

Pleadings

Amendment - Trial already commenced - Allegation of secret profit not pleaded - Allegation of fraud pleaded - Proposed amendment to fraud claim - Test to be applied - Application to dismissal of parts of claim - Whether case opened consistent with pleadings - Whether other documents could be used to draw inferences as to true meaning of pleadings and scope of claim - Whether risk of prejudice - Whether aspects of case unsustainable - Whether proposed revised case stateable - Whether appropriate to dismiss parts of claim after trial commenced and before case had closed - Whether requirement to prove all documents - Whether permissible to admit documents discovered by one party as against another party without proof - Bula v Tara (Unrep, Lynch J, 06/02/1997), Fyffes v DCC [2005] IEHC 477 (Unrep, Laffoy J, 21/12/2005), Tassan Din v Banco Ambrosiano Spa [1991] 1 IR 569, Superwood Holdings Plc v Sun Alliance and London Insurance Plc [1995] 3 IR 303, Cork Plastics v Ineos Compounds [2008] IEHC 93 (Unrep, Clarke J, 07/03/2008), Hetherington v Ultra Tyre Services Limited [1993] 2 IR 535, O'Toole v Heavey [1993] 2 IR 544 and Porterridge Trading v First Active [2007] IEHC 313 (Unrep, Clarke J, 07/09/2007) considered; National Education Welfare Board v Ryan [2007] IEHC 428 (Unrep, Clarke J, 14/12/2007) and Arab Monetary Fund v Hashim (No 2) [1990] All ER 673 distinguished - Amendments as against certain parties permitted subject to conditions (2003/9018P - Clarke J - 20/05/2008) [2008] IEHC 211

Moorview Developments Ltd v First Active plc

Facts: the plaintiff asserted in its statement of claim that the defendant was guilty of a certain type of fraud which caused it loss. Following the opening of the plaintiff's claim at the trial of the action, the defendant complained that the allegation of fraud, as opened, was not that which was contained in the statement of claim and sought, inter alia, to have part of the plaintiff's claim struck out. The plaintiff, for its part, sought, inter alia, to amend its statement of claim to plead a further allegation of fraud should the court hold that the case as opened was not encompassed within the statement of claim. It contended that it only became aware of an important element of the fraud claim as opened at a late stage in the pre-trial procedure due to certain matters that had become apparent through discovery and the exchange of witness statements and reports and that there was a strong possibility that the original case in fraud could not be sustained so that a revised case needed to be made on the pleadings.

Held by Mr Justice Clarke in allowing the amendment sought that the case, as opened at trial, in respect of the revised fraud claim against the defendant was not encompassed by the plaintiff's written pleadings as the charge of fraud had to be proved as laid and where one kind of fraud had been charged in written pleadings another kind of fraud could not be substituted for it at the trial of the action. Parties with a stateable claim in fraud should be given every facility to enable them to make out their case if it be a good one. That should include allowing the case to be amended in the light of discovered documents if it became clear that there was a credible case for a variation on the original claim but not, perhaps, for the claim as originally conceived. However, that did not mean that a plaintiff should be permitted to shift his allegation of fraud to reflect developments in the evidence as the case went along. To permit a belated change in a claim as to fraud gave rise to the risk of significant prejudice and was a matter which the court should scrutinise in detail.

Reporter: P.C.

PORTERRIDGE TRADING LTD v FIRST ACTIVE PLC UNREP CLARKE7.9.2007 2007 IEHC 313

CONSTITUTION

BULA LTD (IN RECEIVERSHIP) & ORS v TARA MINES LTD & ORS UNREP LYNCH 6.2.1997 1997/1/219 1997 IEHC 202

FYFFES PLC v DCC & ORS UNREP LAFFOY 21.12.2005 2005 IEHC 477

TASSAN DIN v BANCO AMBROSIANO 1991 1 IR 569

SUPERWOOD HOLDINGS v SUN ALLIANCE 1995 3 IR 303

NATIONAL EDUCATIONAL WELFARE BOARD v RYAN & ORS UNREP CLARKE 14.12.2007 2007 IEHC 428

ARAB MONETARY FUND v HASHIM & ORS (NO 2) 1990 1 AER 673

CORK PLASTICS (MANUFACTURING) & ORS v INEOS COMPOUNDS UK LTD & ORS UNREP CLARKE 7.3.2008 2008 IEHC 93

HETHERINGTON v ULTRA TYRE SERVICE LTD 1993 2 IR 535

O'TOOLE v HEAVEY 1993 2 IR 544

1 Mr. Justice Clarke delivered on the 20th day of May, 2008

1. Introduction

2 2 1.1 As is apparent from previous judgments delivered in these proceedings a number of connected cases have been under case management for some time. A general description of the proceedings and their procedural history to date can be gleaned from those previous judgments and it is unnecessary to restate the broad parameters of the issues which arise in the proceedings or that procedural history.

3 3 1.2 The proceedings have now come to trial. It might have been hoped that the elaborate case management engaged in would have led to a situation where the trial, at least procedurally, would be relatively uneventful. However, that has not proved to be the case. The parties had agreed that, with the exception of certain specified and discrete issues arising in some of these linked proceedings, all of the trials would be conducted together. For those purposes I propose referring to the plaintiffs in the proceedings specifically referred to above and all other connected companies as the "Cunningham Group". The defendants in the proceedings referred to above will be respectively referred to as "First Active", "Mr. Jackson" and "Mr. Duffy".

4 4 1.3 Both during and after the opening of the proceedings on behalf of the Cunningham Group a number of points were made by counsel on behalf of various defendants which led me to make clear that I wished any issues concerning what might or might not properly form part of the proceedings going to trial to be determined before embarking on evidence. This procedure was agreed to by all. With that in mind I identified as being encompassed by the phrase "the case as opened", the case set out on behalf of the Cunningham Group in the written submissions filed in accordance with the direction of the court as supplemented or varied in the oral submissions made by counsel in his opening. I indicated that I would consider the default position to be that the case which was to go to trial on the evidence was the case as opened and invited each of the defendants to make, at the close of the opening, any submissions which they might have concerning whether the case as opened, or more specifically any part of it, should properly be allowed go into evidence. Arising out of that process a number of points were made concerning questions relating to whether the case as opened was, in certain respects, consistent with the case as pleaded and whether the case as opened, again in certain respects, was stateable.

5 5 1.4 It was accepted on behalf of the Cunningham Group that certain aspects of the case as opened had not been pleaded and an application was made to amend the statement of claim by including additional pleadings under three headings being:-

6 (i) Draft amendment relating to the sale of Finglas;

7 (ii) Sale of Bailey Point secret profit; and

8 (iii) Sale of Bailey Point undervalue.

9 6 1.5 In addition counsel for First Active applied to dismiss the Cunningham Group's case insofar as it alleged fraud against First Active on two bases. Firstly it was said that the case as pleaded, and as set out in the written submissions filed on behalf of the Cunningham Group, was unstateable and that that aspect of the case should be dismissed on the opening. Secondly it was suggested that the case as opened differed from the case as pleaded and, indeed, the case as set out in the written submissions. On that basis it was urged that the case as opened, on the fraud aspect, ought not to be permitted to proceed. In response counsel for the Cunningham Group argued that there was no inconsistency as and between the case as opened and the case as pleaded. However, as a fall back position, and in the event that I was not satisfied that the case as opened was within the pleadings, counsel sought, in the alternative, an amendment.

10 7 1.6 Against that background this judgment is directed to the issues which have arisen between the parties as to the case which should now go into evidence. It is appropriate firstly to set out the specific issues which require determination at this stage.

2. The Issues

11 2 2.1 I have already referred to the three proposed amendments to the pleadings sought on behalf of the Cunningham Group. In respect of two of the relevant amendments no significant opposition was put forward to the making of the amendments concerned, save that each of the defendants made complaint about the unsatisfactory nature of the lateness of the application and, in a very limited sense, complained about a number of minor aspects of the amendments themselves. Subject to those points no opposition was made to the amendments concerned.

12 3 2.2 I should, therefore, deal firstly with the uncontroversial aspects of those amendments so as to exclude them from the issues which I have to determine. In respect of the proposed amendment in relation to the sale of Finglas, no objection was made except to a...