Plus Development LLC v Lens Media Ltd
| Jurisdiction | Ireland |
| Judge | Mr. Justice Noonan |
| Judgment Date | 23 January 2023 |
| Neutral Citation | [2023] IECA 10 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Record Number: 2022/153 |
[2023] IECA 10
Costello J.
Noonan J.
Butler J.
Record Number: 2022/153
High Court Record Number: 2022/1195P
THE COURT OF APPEAL
Interlocutory injunction – Balance of justice – Adequacy of damages – Appellant appealing against an order granting the respondents an interlocutory injunction – Whether the trial judge correctly analysed the balance of justice
Facts: The appellant, Lens Media Ltd (Lens), appealed to the Court of Appeal against an order of the High Court (Twomey J) granting the respondents, Plus Development LLC and Cooper Plus Holdings Ltd (Plus and Cooper), an interlocutory injunction restraining Lens from excluding the respondents from a project to acquire and develop lands in Clondalkin as a media park. Lens contended that the trial judge gave no consideration to whether a fair question had been raised by the respondents concerning whether a partnership existed between the parties as a matter of law; the respondents’ case was premised solely on the basis of such a partnership existing and sought specific performance of it. Lens contended that the judge failed to have regard to the principles upon which specific performance of a partnership agreement might be granted. Lens contended that there could not be a partnership in circumstances where both Memorandums of Understanding (MOU) expressly envisaged that the project was to be carried out by a limited liability company to be formed. It was said that the judge erred in concluding that there could be any privity of contract between Cooper and Lens in circumstances where the former had only come into existence some months after the second MOU. It was said that the judge erroneously concluded that the orders sought were prohibitory rather than mandatory in nature and thus applied the wrong test; what was being sought in fact was to compel Lens to enter into an enforced liaison with the respondents, even though all attempts at doing so had failed. Lens contended that the judge erred in his approach to the balance of justice by concluding that damages would not be an adequate remedy for the respondents in circumstances where, if Lens were allowed to proceed, it would ultimately be in a position to meet such damages. It was said that the judge failed to attach sufficient weight to the defendant’s concerns as to the ability of Plus to fulfil its undertaking as to damages.
Held by Noonan J that it was not in dispute that Lens was balance sheet insolvent; as matters stood, it was plainly unable to meet any award of damages that might be obtained by the respondents. He held that the suggestion that if it was allowed to proceed alone with the project, it may ultimately be in a position to meet such award was highly speculative and fell far short of establishing anything approaching a likelihood that Lens would be able to pay damages. He noted Lens’s complaint that there was a dearth of information on the financial strength of Plus and none at all as regards Cooper. Lens thus said that if the injunction was ultimately found to have been wrongly granted, it faced, at minimum, considerable uncertainty as to whether it may recover on the respondents’ undertaking and had in fact sought security for costs in a separate application. Lens pointed to the fact that notwithstanding that Mr Cooper may be an individual of considerable substance, he was not a party to the proceedings. Those arguments appeared to Noonan J to be deprived of much force in circumstances where, as counsel for the respondents pointed out, Lens did not seek a fortified undertaking as to damages in a timely fashion in the High Court and it was too late to do so. In the event, he was therefore satisfied that the balance of justice was firmly in favour of the grant of the injunction.
Noonan J held that the trial judge correctly analysed the balance of justice in the case and that Lens had failed to establish that any injustice had resulted from the order of the High Court. Noonan J dismissed the appeal and affirmed the order of the High Court. His provisional view was that as the respondents had been entirely successful, they should be entitled to the costs of the appeal.
Appeal dismissed.
JUDGMENT of Mr. Justice Noonan delivered on the 23 rd day of January, 2023
. This appeal is brought by the appellant (the defendant or “Lens”) against an order of the High Court (Twomey J.) granting the respondents (the plaintiffs or “Plus” and “Cooper”) an interlocutory injunction restraining the defendant from excluding the plaintiffs from a project to acquire and develop lands in Clondalkin as a media park (“the Lands”).
. The defendant has for some years sought to acquire a site comprising approximately 48 acres at Grange Castle Business Park from South Dublin County Council (“SDCC”) for the purpose of developing an international media park comprising, inter alia, film and television studios. The principals of Lens, including Mr. James Morris, have extensive experience in the film, television and entertainment industry. Plus is an American entity involved in commercial development in the United States whose principals have Irish backgrounds. Cooper is an Irish company formed as an investment/finance vehicle for the purposes of the project by Mr. Matthew Cooper, his brother Mr. David Cooper and other private individuals, also based in the United States.
. It appears that Mr. Matthew Cooper was introduced to Mr. Morris and his colleagues in or about June 2019 by a mutual connection and although there were some initial broad discussions, matters did not progress at that time. However, contacts were renewed in September 2019 and on or about the 11 th December 2019, the principals of Plus were introduced to the other parties as a potential partner in the venture.
. On the 13 th December, 2019, Lens furnished a confidentiality agreement to the plaintiffs and discussions began in earnest. Lens for some time had been in negotiations with SDCC and had a tentative oral agreement with the Council to purchase the Lands by way of a 999 year “Master Lease” for the sum of approximately €26.5m. Initially, the discussions between the plaintiffs and the defendant progressed to the point where two documents were executed by the parties, both described as a “Memorandum of Understanding”. The first Memorandum of Understanding (“MOU 1”) was signed on the 30 th April, 2020 and the second (“MOU 2”) on the 3 rd June, 2020. The impetus for MOU 2 appears to have come from the fact that at a meeting of SDCC on the 11 th May, 2020, the Council approved in principle a sale of the Lands to Lens for approximately €26.4m.
. MOU 1 is in letter format from Plus to Lens and dated 30 th April, 2020. In the introductory paragraphs, Plus describes itself as having reached a commitment with “our joint venture partners” including Cooper and Lens on a single entity company to own the land, the real estate and operating company for what is described as Phase One of the project, the production studio facility. It refers to the key stakeholders as Investor 1 being Plus and Cooper and Investor 2 being Lens, again describing them as joint venture partners. The document outlines in broad terms the key understandings of the parties including that Plus and Cooper, being Investor 1, propose to raise 100% of the equity, mezzanine debt and senior bank debt required to complete the acquisition and development of the project through to operational handover to an entity comprising the plaintiffs and defendant.
. That joint entity would be operated on a 50/50 basis as between Investor 1 and Investor 2 after Investor 1's equity had been repaid at a multiple of four times, being described as the equity “hurdle”. The letter attached a number of investment documents and concluded by indicating that it provided a starting position towards agreeing the “cornerstone deal points” on the acquisition, development and operation of the Phase One development, being the media park. Phase Two which is also mentioned in the document relates to a possible second project involving an adjoining parcel of lands of about 50 acres.
. In the concluding paragraph, the letter states that it is an indicative summary but that the final sentence of the second paragraph of the letter was to be legally binding – this related to the earlier non-disclosure agreement which continued in force and effect. The final paragraph suggests that whilst MOU 1 was intended to represent the respective parties' understanding of the broad parameters of the agreement that had been reached, it was not, at that juncture at any rate, intended to constitute a binding contract with the sole exception of the non-disclosure element. The letter was signed by the various principals.
. While MOU 1 was in letter format as described, MOU 2 is a more formal document. The parties to MOU 2 are Plus, Lens and “Cooper Investment Group entities”. The latter is not a legal entity but rather describes the Cooper interest pending Mr. Matthew Cooper and his co-investors deciding on the appropriate legal vehicle by which to structure their participation, which subsequently became the second plaintiff herein, Cooper, which was formed on the 27 th August, 2020, approximately three months post MOU 2.
. In the second paragraph, MOU 2 states that Plus, Cooper and Lens intend to engage in a joint venture to acquire the Lands and develop and operate a media park outlined in MOU 1. It goes on to state:
“The parties intend this MOU 2 to be binding and enforceable.”
. The agreement provides that the parties intend to form a limited liability company (“LLC”) to take an assignment of the property from SDCC and notes that the parties are...
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