Point Village Development Ltd ((in Receivership)) v Dunnes Stores

• Jurisdiction: Ireland
• Judge: Ms. Justice Máire Whelan
• Judgment Date: 30 July 2019
• Neutral Citation: [2019] IECA 233
• Date: 30 July 2019
• Court: Court of Appeal (Ireland)
• Docket Number: Neutral Citation Number: [2019] IECA 233

BETWEEN/

POINT VILLAGE DEVELOPMENT LIMITED (IN RECEIVERSHIP)

PLAINTIFF/RESPONDENT

- AND -

DUNNES STORES

DEFENDANT/APPELLANT

[2019] IECA 233

Whelan J.

Irvine J.

Whelan J.

Baker J.

Neutral Citation Number: [2019] IECA 233

Record Numbers: 2017 468 & 2017 602

THE COURT OF APPEAL

Terms of Settlement – Discovery – Construction – Appellant seeking to appeal from High Court judgment – Whether the appellant established dissonance between the objective intention of the parties and the clear linguistic meaning of Clause 11(c)

Facts: The appellant, Dunnes Stores, firstly appealed from the judgment of Costello J delivered on the 14th November, 2017 on foot of which orders were made in the High Court on the 24th November, 2017 and perfected on the 8th December, 2017 directing that: (1) Dunnes was obliged forthwith to release the sum of €15,000,000 (plus accrued interest to the date of release) from a nominated account for the benefit of the respondent, Point Village Development Ltd; (2) Dunnes take all such steps necessary to release the said sum of €15,000,000 (plus accrued interest to the date of release) from the nominated account to Point Village including, if necessary, procuring that Dunnes’ former solicitors assign an instruction to Allied Irish Banks Plc (AIB) releasing the said sums. The appeal’s scope was limited primarily to the parts of the decision of the High Court which interpreted and construed Clause 11(c) of the Terms of Settlement concluded between the parties on 7th July, 2010 compromising High Court proceedings 2009/5004P. The High Court determined (para. 123) that Point Village had complied with its obligations pursuant thereto such that Dunnes was required to release forthwith the said sum to Point Village. Secondly, Dunnes appealed against an order of Twomey J made on the 15th September, 2017 refusing Dunnes’ application for an order pursuant to O.31 r.18(1) of the Rules of the Superior Courts (RSC), directing Point Village to produce for inspection copies of documents identified in a notice to produce delivered on behalf of Dunnes on the 3rd July, 2017. The said documents were also specified in para. 7.14 of an affidavit of Mr Tennant sworn on the 6th April, 2016 and comprise agreements for lease exchanged between Point Village and specified corporate entities. Counsel for Dunnes indicated that if they failed in the substantive appeal, then production of the said documents for inspection “isn’t going to get me anywhere anyway because I have lost the main point” (transcript of hearing p.95). Point Village relied on the judgment of Hogan J in the Court of Appeal (Point Village Developments v Dunnes Stores [2017] IECA 159) upholding a decision of McGovern J to refuse an application for discovery brought in these proceedings in respect of the same documents. The identical language found in O.31 r.18(3) RSC and O.31 r.12(3) RSC was emphasised by Point Village.

Held by the Court of Appeal (Whelan J) that construction of Clause 11(c) involves balancing internal textual considerations and external factors revealing a balance struck between the need to pay attention to the language of the Terms of Settlement negotiated and drafted by the parties and the concern to give effect to the apparent commercial purpose of that clause in their Settlement. Whelan J held that Dunnes had failed to establish any dissonance between the objective intention of the parties and the clear linguistic meaning of the said sub-clause. Whelan J dismissed appeal 2017/602 on all grounds.

Whelan J held that Twomey J was correct in finding that the test for determining whether a document was discoverable under O.31, r.12 RSC or liable to be produced under O.31, r.18 RSC is similar under both provisions; Dunnes was bound by the terms of the judgment of Hogan J in the Court of Appeal in which its application for discovery of the agreements for lease was rejected. Whelan J held that the High Court judge was correct in his conclusion that McCann FitzGerald was not guilty of any manifest error in the statement made in its letter of 4th July, 2017 and that irrespective of whether McCann FitzGerald was guilty of manifest error or not, inspection of the agreements would also not serve any purpose since “the discovery of a document and the inspection of a document will lead to the same result, namely Dunnes having knowledge of the terms of the agreements for lease”. Hogan J had stated at para. 26 of his judgment ([2017] IECA 159) that the contents of documents which might reveal the subjective beliefs of Point Village or its solicitors regarding the interpretation of Clause 11(c) of the Terms of Settlement were irrelevant to the construction of same because such an exercise would be carried out objectively by the Court at trial based on the text (as Whelan J was satisfied it was by Costello J) Whelan J also dismissed appeal 2017/468.

Appeals dismissed.

JUDGMENT of Ms. Justice Máire Whelan delivered on the 30th day of July 2019

Introduction

1 Writing extrajudicially in 1984 on the role of judges in construing commercial contracts, Lord Goff of Chieveley stated: -

‘We are there to help businessmen, not to hinder them; we are there to give effect to their transactions, not to frustrate them; we are there to oil the wheels of commerce, not to put a spanner in the works, or even grit in the oil.’

2 Twenty years later Lord Steyn in ‘ Democracy through Law: Selected Speeches and Judgments’ (2004) pp. 225-226 wrote: -

‘A thread runs through our contract law that effect must be given to the reasonable expectations of honest men… The function of the law of contract is to provide an effective and fair framework for contractual dealings.’

Lord Bingham's paper ‘ A new thing under the sun? The interpretation of contracts and the ICS decision’ Edin LR Vol 12, 374-390, considered that problems only arise when one tries to give practical effect to these laudable aims.

Background

3 This is firstly an appeal from the judgment of Costello J. delivered on the 14th November, 2017 on foot of which orders were made in the High Court on the 24th November, 2017 and perfected on the 8th December, 2017 directing that: -

(1) The appellant (Dunnes) was obliged forthwith to release the sum of €15,000,000 (plus accrued interest to the date of release) from a nominated account for the benefit of the respondent (Point Village).

(2) That Dunnes take all such steps necessary to release the said sum of €15,000,000 (plus accrued interest to the date of release) from the nominated account to Point Village including, if necessary, procuring that Dunnes” former solicitors assign an instruction to Allied Irish Banks Plc (AIB) releasing the said sums.

The appeal's scope is limited primarily to the parts of the decision of the High Court which interpreted and construed Clause 11(c) of the Terms of Settlement concluded between the parties on 7th July, 2010 compromising High Court proceedings 2009/5004P. The High Court determined (para. 123) that Point Village had complied with its obligations pursuant thereto such that Dunnes was required to release forthwith the said sum to Point Village.

Inspection Motion

4 Secondly, there is an appeal against an order of Mr. Justice Twomey made on the 15th September, 2017 refusing Dunnes” application for an order pursuant to O. 31 r.18(1) of the Rules of the Superior Courts (‘RSC’), as amended, directing Point Village to produce for inspection copies of documents identified in a notice to produce delivered on behalf of Dunnes on the 3rd July, 2017. The said documents were also specified in para. 7.14 of an affidavit of Stephen Tennant sworn on the 6th April, 2016 and comprise agreements for lease exchanged between Point Village and specified corporate entities.

5 Regarding the latter appeal, 2017/468, counsel for Dunnes indicated that if they fail in the substantive appeal, then production of the said documents for inspection ‘… isn't going to get me anywhere anyway because I have lost the main point.’ (transcript of hearing p.95). Point Village rely on the judgment of Mr. Justice Hogan in this Court ( Point Village Developments v. Dunnes Stores [2017] I.E.C.A. 159) upholding a decision of Mr. Justice McGovern to refuse an application for discovery brought in these proceedings in respect of the same documents. The identical language found in O. 31 r.18(3) RSC and O. 31 r.12(3) RSC was emphasised by Point Village. Appeal 2017/468 will be considered at the conclusion of this judgment.

Appeal 2017/602: The Background

6 By virtue of an agreement for sale executed on the 26th February, 2008 between Mr. Henry A. Crosbie as vendor of the one part, and Dunnes as purchaser of the other part, Mr. Crosbie agreed to sell the Anchor Site in The Point Village development at North Wall Quay in the City of Dublin by way of lease to Dunnes for the term of 250 years, subject as therein specified. Dunnes was to be the Anchor Tenant in the development. Dunnes entered into a Development Agreement dated the 27th February, 2008. Thereafter, a lease (the long-lease) was duly executed by the parties on the 28th November, 2008. The judgment of the High Court sets out in detail the relevant provisions of the Development Agreement and the history of litigation between Dunnes and Point Village from 2009 onward concerning same, including Terms of Settlement entered into on the 7th July, 2010 by way of compromise of High Court proceedings record number 2009/5004P between Dunnes and Point Village and Mr. Crosbie.

7 Point Village company is now in receivership. Mr. Paul McCann and Mr. Stephen Tennant were appointed statutory receivers of certain assets of Mr. Crosbie and Point Village company, including their respective interests in The Point Village Centre, the lessor's interest on foot of the long-lease and the Development Agreement pertaining to development of The Point Village Centre and...