Mount Kennet Investment Company & Greenband Investments (plaintiffs) v O' Meara & Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 01 June 2010
• Neutral Citation: [2010] IEHC 216
• Court: High Court
• Date: 01 June 2010

[2010] IEHC 216

THE HIGH COURT

[No. 1657 P/2005]

Mount Kennett Investment Company & Greenband Investments v O'Meara & Ors

BETWEEN

MOUNT KENNETT INVESTMENT COMPANY

AND

BY ORDER OF THIS HONOURABLE COURT GREENBAND INVESTMENTS

PLAINTIFFS

AND

PATRICK O'MEARA, ANTHONY J. FITZPATRICK AND JOHN A. TOBIN

DEFENDANTS

MOUNT KENNETT INVESTMENTS LTD v O'MEARA & ORS UNREP SMYTH 21.11.2007 2007/42/8875 2007 IEHC 420

DUFFY v RIDLEY PROPERTIES & ANOR 2008 4 IR 282

AINSWORTH v WILDING 1896 1 CH 673

BULA LTD v CROWLEY 2003 2 IR 430

HENDERSON v HENDERSON 1843 HARE 100

A (A) v MEDICAL COUNCIL & AG 2003 4 IR 302

FORDE-HUNT & ANOR v SINGH 1973 WLR 738

PRACTICE AND PROCEDURE

Abuse of process

Res judicata - Discretion of court - Split trial - Specific performance - Damages -Reactivating claim - Material difference between res judicata and abuse of process - Amendment of order of court where formal order ought to have included reference to matters not included in written order court when perfected - Damages for delay part of original act capable of being pursued at later stage - Henderson v Henderson (1843) 3 Hare 100 considered; AA v Medical Council [2003] 4 IR 302; Ainsworth v Wilding [1896] 1 Ch 673 and Bula Ltd v Crowley (Unrep, SC, 11/4/2003) followed - Ford-Hunt v Ragbir Singh [1973] 1 WLR 738 considered - Held not to be abuse of process (2005/1657P - Clarke J - 1/6/2010) [2010] IEHC 216

Mount Kennett Investment Co v O'Meara

Facts: The proceedings had a protracted history, relating to an order for specific performance which was sought of a contract for the sale of property made in favour of the first named plaintiff against the defendants. The order was not complied with and the proceedings were re-entered to assess damages in 2009. Part of the alleged damages related to the failure to comply with the order for specific performance and part related to the allegation of delay on the part of the owners in complying with the original contract of sale as a result of which further actions had to be taken for commercial development. The order made by the High Court in 2007 provided only for an order for specific performance and there was no mention of the claim in damages for delay. It was now contended that the claim for damages for delay having been before the Court originally and not the subject of an order of the Court had to be regarded as dealt with and to deal with it now, it was submitted, amounted to an abuse of process or a breach of the res judicata rule.

Held by the Clark J. that having considered the evidence of counsel from the proceedings as to what had happened at the trial, that the trial judge had gone along with the proposal for a split trial with the question of damages being postponed to later on. It was unfortunate that the Court order did not reflect this much. The main issue in the application was the question of an abuse of process on the part of the first plaintiff to seek to have delay damages assessed. It was the intention of the trial judge to defer this question of damages and therefore no abuse of process could be made out in this regard, notwithstanding any reference by the trial judge to this matter in his order.

Reporter: E.F.

1. Introduction

2 2 1.1 These proceedings have a long and complex history. So far as relevant to the issue to which this judgment is directed, I will set out that procedural history in some detail in early course. However, in general terms it is important to note that there has already been a full hearing of substantial issues in this case before Smyth J., in which an order for specific performance of a contract for the sale of property was made in favour of the first named plaintiff ("Mount Kennett") against the defendants ("the Owners"). That order for specific performance was not complied with. Mount Kennett then successfully brought an application to re-enter the proceedings for the purposes of the assessment of damages. At that stage, the second named plaintiff ("Greenband") was joined because some of the consequential losses alleged to resultfrom the actions of the Owners were said to have caused loss to that company. Nothing turns on that specific matter at this stage.

3 3 1.2 In any event, pre-trial procedures followed and the question of the assessment of the damages to which Mount Kennett and/or Greenband might be entitled was listed for hearing. When counsel for Mount Kennett and Greenband had completed opening the case, an application was made by counsel on behalf of the second named defendant ("Mr. Fitzpatrick") in which it was said that both Mount Kennett and Greenband were debarred from pursuing the claim in damages which was before the court. It should be noted that the claim which was before the court was, in substance, in two parts. Part of the alleged damages claimed related to the failure of the Owners to comply with the order of specific performance. However, another part of the damages claimed related to an allegation of delay on the part of the Owners in complying with the original contract of sale, as a result of which it was said on behalf of Mount Kennett and Greenband that further actions had to be taken to enable a significant commercial development then contemplated to actually take place. That claim for damages for delay was part of the case as had originally been pleaded and was before Smyth J. when the original trial of the action in these proceedings took place. The order made by Smyth J. on the occasion in question simply provided for specific performance. There is no mention of what was to happen to the claim in damages for delay which was already before the court.

4 4 1.3 Having considered the application made by counsel for Mr. Fitzpatrick, I ruled that the application in relation to that portion of the damages which resulted from the failure to make specific performance was premature and that there was no basis for dismissing that portion of the action on the opening. However, certain factual issues having arisen as to what, in fact, happened before Smyth J. during the original trial, Idirected that an issue be tried as to whether the damages for delay in completion which formed part of the original action, were capable of being pursued at this stage.

5 5 1.4 In substance, the argument made on behalf of Mr. Fitzpatrick (and supported by the other defendants) was that the claim for damages for delay, having been before Smyth J., and not having been the subject of an order of the court, must be taken to have now been dealt with, such that it would amount to an abuse of process or a breach of the res judicata rule to now proceed with it. That preliminary issue having been heard, I ruled, some short number of days later, that Mount Kennett and Greenband were not debarred from pursuing the claim in question. I indicated that I would give reasons for coming to that view at a later stage. The purpose of this judgment is to deal with the questions which arose for consideration and to set out reasons for the conclusion reached. I turn first to the procedural history.

2. Procedural History

2 2 2.1 The original hearing commenced before Smyth J. on the 17 ^th April, 2007, and continued on the 15 ^th and 16 ^th May of that year. It will be necessary to turn to the events of that hearing in due course. Smyth J. reserved judgment which he delivered on the 21 ^st November, 2007. See Mount Kennett Investments Limited v. O'Meara & Ors [2007] IEHC 420. As appears from that judgment, Smyth J. rejected the arguments put forward on behalf of the Owners, both to the effect that the relevant contract of sale had been frustrated or was impossible of performance and also found that, in his discretion, he would order specific performance rather than damages in lieu.

3 3 2.2 The matter was put in for mention before Smyth J. on the 11 ^th December, 2007, at which stage a formal order was made directing specific performance of the relevant contract of sale by the 31 ^st March, 2008. There is no mention of damages inthat order. It should be noted in passing that the reason, as appears from that order, for the time lapse between the conclusion of the proceedings and the judgment of Smyth J., was that Smyth J. had been informed that there was a possibility of the parties resolving their differences and he afforded them a reasonable opportunity so to do.

4 4 2.3 Likewise, it is clear that the problem which was at the heart of the proceedings was that the Owners had contracted to sell a freehold interest in the relevant property at a time when they did not own that freehold interest, but had contracted to acquire same subject to the consent of the Charity Commissioners. The problem was that the Charity Commissioners were not happy with the purchase price. The reason for the relatively lengthy period for completion specified in the order of Smyth J. was to afford the Owners an opportunity to complete the task of getting in the freehold so as to be in a position to sell it on to Mount Kennett. At the heart of the issues which Smyth J. had to decide was the question of whether the Owners were in a position to acquire that freehold. Smyth J. held that they were, provided that they were prepared to pay an appropriate price, such as would satisfy the Charity Commissioners.

5 5 2.4 In any event, the matter next came before the court on the 2 ^nd March, 2009, when Mount Kennett brought an application seeking to have the proceedings re-entered "for the purposes of the assessment of damages for breach of contract and/or damages in lieu of specific performance". An order seeking to have Greenband joined was also sought, together with an order giving liberty to deliver an amended statement of claim. 2.5 As it happens I had, at around that time, been dealing with a separate case brought by Greenband relating to neighbouring property. In...