Point Village Development Ltd and ors. v Dunnes Stores

• Jurisdiction: Ireland
• Judge: Mr. Justice Gerard Hogan
• Judgment Date: 12 May 2017
• Neutral Citation: [2017] IECA 159
• Date: 12 May 2017
• Court: Court of Appeal (Ireland)
• Docket Number: Record No. 2016/360

BETWEEN/

POINT VILLAGE DEVELOPMENT LIMITED (IN RECEIVERSHIP)

PLAINTIFF / RESPONDENT

- AND -

DUNNES STORES

DEFENDANT/APPELLANT

BETWEEN/

DUNNES STORES

PLAINTIFF / APPELLANT

- AND -

POINT VILLAGE DEVELOPMENT LIMITED (IN RECEIVERSHIP)

- AND -

HENRY A. CROSBIE

DEFENDANTS / RESPONDENTS

[2017] IECA 159

Ryan P.

Irvine J.

Hogan J.

Record No. 2016/360

Record No. 2016/520

THE COURT OF APPEAL

JUDGMENT of Mr. Justice Gerard Hogan delivered on the 12 ^th day of May 2017

1 In the halcyon days of 2006 and 2007 the entrepreneur and businessman, Mr. Henry Crosbie, had great plans for the development of what was to be known as the Point Village at North Wall Quay, Dublin 1. It was envisaged that this development would provide elaborate new retail facilities which would appeal to fashion-conscious, affluent young people. By an agreement in February 2008 the parties agreed that Dunnes Stores would be a major anchor tenant in this new development. In addition, however, it was contemplated that the Point Village project would be accompanied by three major developments, namely, the construction of a 39 storey landmark watchtower (which was to be the largest structure in Dublin), a building known as “The Spine” and the “U2 Experience Museum”, the latter being a development designed to recognise the achievements of this celebrated popular music group.

2 Like many such ambitious plans, however, these developments were swept away in the aftermath of the banking and financial crash of September 2008. Since the development of the Watchtower, the “Spine” and the U2 Experience were no longer feasible, Dunnes Stores were less keen to participate in this project and claimed that the plaintiff development company, Point Village Development Ltd. (“PVDL”), had breached the terms of the development agreement. To that end Dunnes Stores commenced proceedings in 2009 seeking various reliefs arising from an alleged breach of the development agreement between the parties. These proceedings were then compromised by means of a settlement agreement dated 7 ^th July 2010 (“the 2010 agreement”)

3 The settlement agreement envisaged that in return for being absolved of its obligation to build the Watchtower, the Spine or the U2 Experience, the contract price to be paid by Dunnes Stores was to be reduced from €46m. to €31m.. This latter sum was to be paid into a joint nominated account to be released in instalments in accordance with Clause 11 of the agreement. Clause 11(c) of the agreement provides that:

“The following provisions shall apply to the release of monies in the nominated account:-

(c) The sum of €15m. (plus accrued interest to date) shall be released within five working days of receipt by Dunnes Stores of confirmation by William Fry that binding agreements for lease or leases have been exchanged with tenants in respect of at least seven of the ground floor units marked x on the annexed ground floor plan, four at least of which shall be internal units. The agreements for lease or leases may contain a clause that it is a precondition to the tenant being obliged to enter into the lease that Dunnes Stores should have commenced the fit out of the store.”

4 Clause 6 of the 2010 agreement is also of some importance, since it provides that: “The developer/landlord will discuss with Dunnes the tenant mix for the ground floor on the Centre prior to entering into binding agreements for lease with tenants.”

5 It is not disputed that the parties engaged in extensive correspondence regarding the proposed tenancies for the Point Village Centre. A meeting between the parties also took place on 18 ^th July 2014 at which the proposed tenant mix was discussed. It is agreed that this was, in fact, the only meeting between the parties at which the tenant mix was discussed.

6 Some years after the 2010 agreement a receiver and a statutory receiver were appointed in respects of the assets of PVDL and it is the receivers who now have effective carriage of the proceedings. By letter dated 29 ^th February 2016 the solicitors for the receivers, McCann FitzGerald, wrote to Dunnes Stores claiming to have provided the confirmation required by clause 11(c). (No issue arises from the fact that the confirmation was provided by McCann FitzGerald, the solicitors for the receivers, rather than William Fry the erstwhile solicitors for PVDL). While this confirmation was disputed by Dunnes Stores on several grounds, the chief objection was that the reference to “tenants” in Clause 11(c) of the 2010 agreement was to “high quality” tenants, i.e., tenants of a quality consistent with the projected quality of the Point Village development. Dunnes Stores contend that the tenants acquired by the receivers fall far short of that, so that it has in fact no obligation to pay pursuant to the confirmation provided by McCann FitzGerald..

7 In 2016, however, PVDL issued special summons proceedings against Dunnes Stores contending that pursuant to clause 11(c) of the 2010 agreement the later company is required to release €15m. to the receivers of PVDL in view of the certificate. These proceedings have not yet come to trial and the present appeals concern, first, an application for discovery and, second, an application to permit the solicitors and counsel for Dunnes Stores to have access to certain discovery documentation generated in the earlier 2009 proceedings. I propose to deal with these two appeals in turn.

The first appeal: discovery

8 The first appeal is an appeal from the ex tempore decision of McGovern J. in the High Court dated the 4 ^th July 2016 insofar as he refused the defendant's application for discovery. In its notice of motion dated the 22 ^nd June 2016 Dunnes Stores sought the following discovery:

“ Category 1:

All documents evidencing and / or relating to the plaintiff's engagement with the defendant pursuant to clause 6 of the settlement agreement.

Category 2:

All documents evidencing and / or relating to the plaintiff's engagement with actual or potential tenants in respect of units in the Point Village Centre for the purpose of complying with clause 11(c) of the settlement agreement, including all documents and correspondent exchanged between the plaintiff its servants or agents including its letting agents and / or other property advisors, in this regard and, all documents and correspondent exchanged in the plaintiff's servants or agents (including its letting agents and / or property advisors and actual tenants.

Category 3:

All documents evidencing and / or relating to the agreement for lease and /or leases entered into by the plaintiff with the tenants set out at para. 7.14 of the affidavit of Stephen Tennant sworn on the 6 ^th April 2016.

Category 4:

All documents evidencing and / or relating to the tenant mix for the Point Village Centre, including all documents evidencing and / or relating to the types, quality of the tenants envisaged and were proposed for the Point Village Centre from when the development was first envisaged to date.”

9 In his decision McGovern J. ruled against the majority of the reliefs claimed, saying in respect of Category 1 as follows:

“This is an application for discovery of four categories of documents, the first one is all documents evidencing and/or relating to the plaintiff's engagement with the defendant pursuant to Clause 6 of the settlement agreement. In my view the offer made by Messrs McCann FitzGerald in their letter of 28 ^th June 2016 with regard to this category was reasonable, they offered to make discovery of the inter partes correspondence exchanged between the parties pursuant to Clause 6 of the settlement agreement and all notes and memoranda recording what transpired at the meeting between the parties on 18 ^th July 2014. This document is relevant to the compliance by the defendant of Clause 6 and no more than that. It seems to me that it is only the interactions between the plaintiff and the defendant that are relevant to the discovery which has been offered, so that letter is reasonable and that is the discovery I will direct.”

10 Turning then to categories 2, 3 and 4 McGovern J. said:

“Category 2 is all documents evidencing and/or relating to the plaintiff's engagement with potential and actual tenants in respect of units of the Point Village Centre for the purpose of complying with Clause 11(c) of the settlement agreement, including all documents and correspondence exchanged between the plaintiff and its servants or agents, including its letting agents and/or other property advisors in this regard and all documents and correspondent engaged between the plaintiff's servants or agents, including its letting agents and/or other property advisors and potential and actual tenants.

In my view the discovery that is sought is not necessary on the issues which have been joined. Either the tenants are high end or high class tenants or they are not. That's a question of fact which can be determined by expert of other evidence at the hearing having regard to the nature of the tenants who are occupying the various premises and it doesn't depend on the discovery sought in Category 2. So I am refusing that category.

Category 3 is all documents evidencing and/or relating to the agreement for lease and/or leases entered into by the plaintiff or the tenants set out at paragraph 7.14 of the affidavit of Stephen Tenant sworn on 6 ^th April 2016. In my view the discovery sought is not necessary because all that was required was confirmation of a binding agreement and this confirmation has been furnished by the defendant to the plaintiffs. So I am going to refuse category 3 as being unnecessary and irrelevant.

Category 4 is in respect of all documents evidencing and/or relating to the tenant mix for the Point Village Centre, including all documents evidencing and/or relating to the type and quality of the tenants envisaged and/or proposed for the Point...