Mount Kennett Investment Company v Oæmeara

• Jurisdiction: Ireland
• Judgment Date: 01 June 2010
• Docket Number: [2005 No.
• Date: 01 June 2010
• Court: High Court

[2010] IEHC 216,

High Court

[2005 No. 1657P]

Mount Kennett Investment Company v. OÆMeara

Mount Kennett Investment Company and by order Greenband Investments

Plaintiffs

and

Patrick O'Meara, Anthony J. Fitzpatrick and John A. Tobin

Defendants

Cases mentioned in this report:-

A.A. v. Medical Council [2003] 4 I. R. 302; [2004] 1 I.L.R.M. 372.

Ainsworth v. Wilding [1896] 1 Ch. 673.

Bula Ltd. v. Crowley (No. 4) [2003] 2 I.R. 430.

Duffy v. Ridley Properties Ltd [2005] IEHC 314, (Unreported, High Court, Finlay Geoghegan J., 7th July, 2005); [2008] IESC 23, [2008] 4 I.R. 282.

Ford-Hunt v. Raghbir Singh [1973] 1 W.L.R. 738; [1973] 2 All E.R. 700.

Henderson v. Henderson (1843) 3 Hare 100.

Moffitt v. ACC [2007] IEHC 245, (Unreported, High Court, Clarke J., 27th July, 2007).

Mount Kennett Investment Company v. O'Meara [2007] IEHC 420, (Unreported, High Court, Smyth J., 21st November, 2007).

Practice and procedure - Preliminary issue - 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 - Whether damages for delay part of original action capable of being pursued at later stage.

Preliminary issue

The facts have been summarised in the headnote and are more fully set out in the judgment of Clarke J., infra.

By notice of motion dated the 25th February, 2009, the plaintiffs sought to have the proceedings re-entered which motion was granted by order of the High Court (Clarke J.) dated the 23rd March, 2009. The substantive matter in the proceedings was heard on the 9th and 10th March, 2010. An application was made by the second defendant on the 10th March, 2010, when opening their case that the plaintiffs were debarred in pursuing the claim in damages. By order of the High Court (Clarke J.) dated the 10th March, 2010, the matter was adjourned for the hearing of the preliminary issue.

The preliminary issue was heard by the High Court (Clarke J.) on the 26th and 27th April, 2010.

The matter was originally heard before the High Court (Smyth J.) in 2007 and judgment was delivered by the High Court on the 21st November, 2007 (see [2007] IEHC 420). An order was made directing specific performance of a contract of sale. An application was brought before the High Court by the first plaintiff to have the proceedings re-entered for the purpose of assessing damages for breach of contract and/or damages in lieu of specific performance and furthermore to have the second plaintiff joined to the proceedings. The High Court (Clarke J.) took seisin of the case, Smyth J. having retired in the meantime.

The defendants allege that it was an abuse of process for the plaintiffs to maintain a claim for damages on the basis that it did not form part of the previous order of the High Court and that the claim was to be taken as having been dealt with by Smyth J. The plaintiffs alleged that a proposal was put to the High Court which amounted in substance to an agreement that there be a split or modular trial and that the question of entitlement of the first plaintiff to a decree of specific performance should be dealt with first and the matter of damages be deferred. The High Court (Clarke J.) directed that an issue be tried as to whether the damages for delay which formed part of the original action were capable of being pursued at the later stage.

Held by the High Court (Clarke J.), in concluding that it was not an abuse of process on the part of the plaintiffs to prosecute a claim for damages for delay, 1, that there was a material difference between res judicata and an abuse of process. A court had no discretion as regards strict res judicata where an issue had been decided by a court of competent jurisdiction in proceedings between the same or connected parties. No new proceedings could be brought except in the limited circumstances where the original order can be set aside on the grounds of fraud or other similar serious wrongdoing. In contrast, where an issue was not advanced in the original proceedings, but where it amounted to an abuse of process to subsequently maintain a claim which should have been brought in the original proceedings, the court retained discretion to take into account any relevant circumstances necessary for the purposes of assessing whether it was an abuse of process to maintain the relevant claim. The fact that a case had been brought and abandoned would be a significant consideration against the court exercising any discretion it might have had to allow it to be re-heard.

Henderson v. Henderson (1843) 3 Hare 100 considered.A.A. v. Medical Council [2003] 4 I. R. 302 followed.

2. That the court could amend an order it had made where it was clear from what the trial judge had stated in the spoken order of the court that the formal order ought to have included a reference to certain matters which were not included in the written order of the court when perfected.

Ainsworth v. Wilding [1896] 1 Ch. 673 andBula Ltd. v. Crowley (No. 4)[2003] 2 I.R. 430followed.

3. That a party who did not request an inquiry as to damages at a specific performance trial could not subsequently activate a new claim for delay damages or any other form of damages that depended on new facts occurring after the date of the judgment. This was not a case where the question of damages was ignored but rather was deferred.

Ford-Hunt v. Raghbir Singh [1973] 1 W.L.R. 738 considered.

Cur. adv. vult.

Clarke J. 1st June, 2010

[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 the High Court (Smyth J.), in which an order for specific performance of a contract for the sale of property was made in favour of the first plaintiff (Mount Kennett) against the defendants (the owners) (see [2007] IEHC 420). 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 plaintiff (Greenband) was joined because some of the consequential losses alleged to result from the actions of the owners were said to have caused loss to that company. Nothing turns on that specific matter at this stage.

[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 for the second 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 the High Court (Smyth J.) when the original trial of the action in these proceedings took place. The order made by the High Court (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 (see [2007] IEHC 420).

[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 arose as to what, in fact, happened before the High Court (Smyth J.) during the original trial. I directed 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.

[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 the High Court (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 judicatarule 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.

Procedural history

[5] The original hearing commenced before the High Court (Smyth J.) on the 17th April, 2007 and continued on the 15th and 16th May, 2007. It will be necessary to turn to the events of...