Point Village Development Ltd and Another v Dunnes Stores

• Jurisdiction: Ireland
• Judge: Ms. Justice Laffoy
• Judgment Date: 15 November 2012
• Neutral Citation: [2012] IEHC 482
• Court: High Court
• Date: 15 November 2012

[2012] IEHC 482

THE HIGH COURT

[No. 6205P/2011]

Point Village Development Ltd & Crosbie v Dunnes Stores

BETWEEN

POINT VILLAGE DEVELOPMENT LIMITED AND HENRY A. CROSBIE

PLAINTIFFS

AND

DUNNES STORES

DEFENDANT

IGOTE LTD v BADSEY 2001 4 IR 511

ANALOG DEVICES v ZURICH INSURANCE 2005 1 IR 274

WW GEAR CONSTRUCTION LTD v MCGEE GROUP LTD 2010 EWHC 1460

KRAMER v ARNOLD 1997 3 IR 43

BNY TRUST CO (IRELAND) LTD v TREASURY HOLDINGS UNREP 5.7.2007 2007/5/998 2007 IEHC 271

DIPLOCK IN ANTAIOS COMANIA NAVARIERA SA v SALEN REDERIERNA AB 1985 AC 191

MOORVIEIW DEVELOPMENTS LTD & ORS v FIRST ACTIVE PLC & ORS UNREP CLARKE 9.7. 2010 2010/37/ 9346 2010 IEHC 275

DNSKE BANK v COYNE UNREP CHARLETON 25.5.2011 2011/11/2489 2011 IEHC 234

BANK OF SCOTLAND PLC v FERGUS UNREP FINLAY-GEOGHEGAN 30.3. 2012 2012 IEHC 131

MARLAN HOMES LTD v WALSH & ORS UNREP SUPREME MURRAY O'DONNELL MCKECHNIE 30.3.2012 2012 IESC 23

CHARTER REINSURANCE v FAGAN 1997 AC 313

KELLY v SIMPSON UNREP CHARLETON 1.12.2008 2008/33/7128 2008 IEHC 374

CONTRACT LAW

Specific performance

Development agreement - Settlement agreement - Anchor tenant to commence and complete fit out works - Development agreement varied by settlement agreements - Variation of lease - Construction of settlement agreement - Law on construction of contracts - Correction of mistakes by construction - Whether alternative defence available as developer in breach of contractual obligations in relation to works - Alleged failure to commence works - Equitable remedy - Whether inequitable to make order given breach of contract - Absence of prejudice - Igote Ltd v Badsey Ltd [2001] 4 IR 511; Analog Devices v Zurich Insurance [2005] 1 IR 274; WW Gear Construction Ltd v McGee Group Ltd [2010] EWHC 1460; Kramer v Arnold [1997] 3 IR 43; BNY Trust Co (Ireland) Ltd v Treasury Holdings [2007] IEHC 271, (Unrep, Clarke J, 5/7/2007); Antaios Compania Naviera SA v Salen Rederiena AB [1985] AC 191; Chartbrook v Persimmon Homes Ltd [2009] 1 AC 1101; Danske Bank v Coyne [2011] IEHC 234, (Unrep, Charleton J, 25/5/2011); Bank of Scotland Plc v Fergus [2012] IEHC 131, (Unrep, Finlay Geoghegan J, 30/3/2012); Marlan Homes Ltd v Walsh [2012] IESC 23, (Unrep, SC, 30/3/2012) Charter Reinsurance v Fagan [1997] AC 313; Kelly v Simpson [2008] IEHC 374, (Unrep, Charleton J, 1/12/2008); Roberts v O'Neill [1983] IR 47 and Dyster v Randall & Sons [1926] Ch 932 considered - Finding that no basis for construction asserted by plaintiffs (2011/6205P - Laffoy J - 15/12/2012) [2012] IEHC 482

Point Village Development Ltd v Dunnes Stores

The plaintiffs initiated proceedings against the defendant following discussions in February 2008 whereby the defendant agreed to purchase what was known as the Anchor site from the first named plaintiff by way of a long lease whilst entering into a developmental agreement with the second named plaintiff. The grant of the Anchor site was completed on the 28th November 2008. Disputes arose subsequently from the developmental agreement which resulted in the defendant initiating proceedings against the plaintiffs and the plaintiffs making counter-claims. These were resolved by way of a "Settlement Agreement" between the parties. However, further issues arose as to the implementation of the Settlement Agreement which was further complicated when a "Supplemental Agreement" was made. The plaintiffs began proceedings against the defendant for specific performance of all three agreements.

It was the defendant's assertion that he was unable to complete the agreements because the "Access Date" had not occurred. This was described in the developmental agreement as the date on which the second named plaintiff's architects have deemed the construction of the store to be at a point of completion where the defendant could begin work of their obligation to complete the "Fit Out Works" within the "Fit Out Period" which was the 26 weeks following the Access Date. The plaintiffs contended that the Access Date had occurred. The defendant alternatively contended that the second named plaintiff was in breach of the agreement by failing to complete the building works of a section of the development known as "Point Square" to a first class standard comparable to other prestigious shopping centres within a certain time period and so could not now seek relief from the court. These proceedings were held to determine whether the defendant's alternative defence was an answer to the plaintiff's claim for specific performance and to decide on the proper construction of clause 14 of the developmental agreement which outlined that the Access Date would occur when the defendant received confirmation of binding lease agreements of at least seven of the ground floor units in the developmental complex pursuant to paragraph 11(c) of the agreement. The plaintiff's claimed that in terms of clause 14, the parties had agreed that the Access Date should be activated when the defendant received Payment Certificate certifying Practical Completion of the Building Works pursuant to paragraph 11(a) and the cross-reference to paragraph 11(c) in clause 14 had been a mistake.

Held by Laffoy J that the defendant's offered construction of clause 14 whereby paragraph 11(c) was preferred as the cross-reference to paragraph 11(a), seemed logical and commercially sensible. The Settlement Agreement and Supplemental Agreement had come about because the defendant wished to be absolved from completing works until it had some assurances as to fellow tenants. It was illogical then to consider that the proper construction of clause 14 was in accordance with paragraph 11(a) which offered no assurances as to future fellow traders on the complex. The fact the defendant was a commercial entity with considerable experience in the field makes the plaintiff's assertion that the defendant would allow itself to be put in such a precarious position even more improbable. Because it wasn't clear there was a mistake as alleged by the plaintiff, it was not open to the court to change clause 14 of the developmental deal at that juncture.

The alternative defence was based upon the plaintiffs' ability to seek specific performance in light of the fact the defendant claimed the second named plaintiff had failed to deliver construction of Point Square to a first class standard within a certain timeframe. It was held that because the construction of clause 14 had not been varied to the benefit of the plaintiffs, they were unable to seek specific performance at this stage and so the alternative defence was hypothetical for the time being. The plaintiffs had noted that the completion of their obligation would be completed that month. It was held that even if it was established construction was completed outside the time period, there would be no prejudice to the defendant as they had not even began to complete their obligation. If the plaintiff established later that they could seek specific performance, they would not be disentitled to do so by reason of the alternative defence.

1 Judgment of Ms. Justice Laffoy delivered on 15th day of November, 2012.

Factual background

2 1. These proceedings are the latest episode in a long running saga arising out of agreements entered into in February 2008 between the parties under which the defendant (Dunnes) agreed to acquire from the second plaintiff (Mr. Crosbie) what was referred to as the Anchor Site in the development known as Point Village at the North Wall Quay in the City of Dublin and entered into a development agreement with the first plaintiff (the Developer) for construction of a retail store on the site.

3 The agreements entered into between the parties in February 2008 were the following:

4 (a) an agreement for sale dated 26 ^th February, 2008 made between Mr. Crosbie, as vendor, and Dunnes, as purchaser, wherein Mr. Crosbie agreed to sell the Anchor Site to Dunnes by way of a long lease for two hundred and fifty years at a nominal rent, the purchase price being €5m; and

5 (b) a development agreement dated 27 ^th February, 2008 (the Development Agreement) made between the Developer and Dunnes with Mr. Crosbie participating to consent to the provisions thereof.

6 The agreement referred to at (a) above was completed by the grant of the lease, which was dated 28 ^th November, 2008 (the Lease) by Mr. Crosbie to Dunnes, whereupon Dunnes became the owner of the Anchor Site as so demised.

7 2. Disputes arose between the parties in relation to the development and on 2 ^nd June, 2009 Dunnes commenced proceedings against the Developer and Mr. Crosbie in the High Court (Record No. 2009/5004P) (the 2009 Proceedings) seeking various reliefs and the Developer and Mr. Crosbie counterclaimed also seeking various reliefs. After the 2009 Proceedings came on for hearing, terms of settlement were reached between the parties on 7 ^th July, 2010. The terms of settlement, which I will refer to as the "Settlement Agreement," were concluded early in the morning of 7 ^th July, 2010 after the parties had spent the night negotiating. The Settlement Agreement is handwritten.

8 3. Despite the fact that the Settlement Agreement was intended to dispose of the 2009 Proceedings, further disputes arose between the parties in relation to its implementation and the matter had to be brought back before the Court. In connection with the further hearing of the matter, the parties negotiated supplemental terms of settlement, to which I will refer as the "Supplemental Agreement", on 1 ^st November, 2010. The issues in these proceedings arise out of the variation of the terms of the Development Agreement by the Settlement Agreement and the Supplemental Agreement. However, in order to put those variations into perspective it is appropriate to briefly consider how the Settlement Agreement and the Supplemental Agreement...