Powderly v McDonagh and Another

• Jurisdiction: Ireland
• Judge: Mr. Justice Kelly
• Judgment Date: 31 January 2006
• Neutral Citation: [2006] IEHC 20
• Court: High Court
• Docket Number: [No. 738 S/2004]
• Date: 31 January 2006

[2006] IEHC 20

THE HIGH COURT

[No. 738 S/2004]

POWDERLY v MCDONAGH

COMMERCIAL

BETWEEN

THOMAS POWDERLY

PLAINTIFF

AND

PATRICK McDONAGH AND ANN McDONAGH

DEFENDANTS

ROYAL INSTITUTE OF THE ARCHITECTS OF IRELAND AGREEMENT & SCHEDULE OF CONDITIONS OF BUILDING CONTRACT: ARTICLES OF AGREEMENT 1996

ARBITRATION ACT 1980 S5(1)

PJ HEGARTY & SONS LTD v ROYAL LIVER FRIENDLY SOCIETY 1985 IR 524

DAWNAYS LTD v FG MINTER LTD 1971 1 WLR 1205

MODERN ENGINEERING v GILBERT-ASH 1974 AC 689

JOHN SISK & SON LTD v LAWTER PRODUCTS BV 1976-77 ILRM 204

AER RIANTA CPT v RYANAIR LTD 2002 1 ILRM 381 2001 4 IR 607

PRENDERGAST v BIDDLE UNREP SUPREME 31.7.1957

PRACTICE AND PROCEDURE

Summary judgment

Leave to defend - Test applicable - Whether bona fide defence - Building contract - Set off - Defendant counter-claiming damages for negligence - Whether summary judgment should be entered - Aer Rianta cpt v Ryanair Ltd [2001] 4 IR 607 applied - Summary judgment refused (2004/738S - Kelly J - 31/1/2006) [2006] IEHC 20

Facts: The defendants purchased a house which required substantial renovation work. The defendants commissioned an architect and surveyor to advise them and they in turn made contact with the plaintiff who was retained as the main contractor for the works. No written contract was executed to govern the relationship between the plaintiff and the defendants. The contract was terminated by the defendants, the plaintiff having already been paid Eur9.8 million. The defendants believed that they had overpaid the Plaintiff. The Plaintiff disagreed and brought summary summons proceedings for the recovery of a further Eur2,803,763.99 which he said was due to him.

Held by Kelly J. in refusing summary judgment and adjourning the case to plenary hearing that the plaintiff could not demonstrate a case sufficient to warrant summary judgment.

Reporter: R.W.

Mr. Justice Kelly

1 In 1999 the defendants purchased Corbalton Hall, Skryne, Co. Meath. This is a period house constructed between 1790 and 1801 under the design and supervision of the architect Francis Johnston.

2 They decided to carry out substantial renovation work on the house. It is a protected structure. The plaintiff contends that the defendants intended to spend approximately €25 million on the renovation works. Whether that figure be accurate or not it is quite clear that, even by today's standards, the works in question were going to be very costly and indeed have proved to be so to date.

3 The defendants commissioned an architect and quantity surveyor to advise them and they in turn made contact with the plaintiff who was retained as the main contractor for the works.

4 Despite the large sums of money involved it is remarkable that no written contract was executed to govern the relationship between the plaintiff and the defendants.

5 The defendants believed that the principal works to be undertaken by the plaintiff would be governed by the articles of agreement and conditions of contract published by the Royal Institute of Architects of Ireland (1996 Edition) for use when quantities do not form part of the contract. Indeed support for that understanding is to be found in a letter dated 11th July, 2002, from the defendants” then architect to the plaintiff which confirmed the intention of the defendants to enter a formal contract with the plaintiff for a sum of €5.95 million including V.A.T. The letter pointed out that formal contract documents would be assembled and tabled for signing by all parties as soon as possible thereafter. Whilst the letter does not mention the form of contract to be entered into it clearly envisaged a formal written agreement being executed. In the event, no such agreement was executed. Furthermore, according to the plaintiff's evidence, he was retained the previous August and was actually on site and working since 10th September, 2001.

6 The lack of a formal written contract governing the relationship between the plaintiff and the defendants has not assisted in the resolution of the disputes which have now occurred.

7 At this stage it appears that the plaintiff has been paid in excess of €9.8 million. His contract has been terminated by the defendants. They believe that they have overpaid him and that a reasonable estimate of the value of the works carried out to date is €7.845 million.

8 The plaintiff disagrees and brings these proceedings for the recovery of €2,803,763.99 which he says is due to him from the defendants.

9 On 22nd June, 2004 these proceedings were commenced by summary summons.

10 It was not until 25th April, 2005 that a motion was brought before the Master seeking leave to enter final judgment. That motion was made returnable for 8th June, 2005. It was adjourned and on 22nd June, 2005 the defendant brought a motion to the Court seeking to stay the proceedings pursuant to the provisions of s. 5(1) of the Arbitration Act1980. That motion was made returnable for 11th July, 2005.

11 On 20th July, 2005 the plaintiff brought a motion returnable for 25th July, 2005 seeking to have the proceedings entered into the Commercial List.

12 Notwithstanding the delay in bringing such an application I admitted the proceedings and gave directions concerning an exchange of affidavits so as to enable the application to stay the proceedings be heard at the earliest opportunity.

13 I heard the motion seeking a stay of the proceedings on 17th October, 2005 and refused the order sought. I did so because I was not satisfied that the defendants had demonstrated the existence of any binding agreement to arbitrate their differences.

14 On that occasion I also gave directions for the exchange of the necessary affidavits to enable the motion for judgment to be heard. The motion was heard by me last month and this is my judgment upon it.

15 The plaintiff does not seek to recover by way of summary judgment the entire of the money in respect of which the proceedings have been brought.

16 The full sum of €2,803,763.99 claimed in the summary summons is broken up into three parts.

17 The first is a sum of €1,333,720.85 which is allegedly due on foot of an architect's certificate of 10th May, 2004.

18 A sum of €1,134,767.62 is claimed in respect of works allegedly carried out by the plaintiff for the defendants during the period 1st March, 2004 to 11th May, 2004. (Apparently incorrectly claimed in the summons as being due in respect of the period 1st April, 2004 to 11 May, 2004).

19 The third part of the claim is for €335,275.52 in respect of a sum allegedly due for retention monies retained by the defendants which, following the termination of the contract, is allegedly due to the plaintiff.

20 There was an extensive exchange of affidavits with many issues debated. As a result of that exchange it is accepted by the plaintiff that a significant portion of his claim cannot attract summary judgment and will have to be remitted to plenary hearing. However, in respect of two elements of the claim he contends that the defendants have not demonstrated any triable issue by way of defence and that summary judgment should be granted to him.

21 The first sum in respect of which summary judgment is now sought is one of €645,886.62. That is said to be due on foot of the architect's certificate issued on 10th May, 2004. The total sum specified in that certificate is the €1,333,720.85 which I have already described as being the first part of the plaintiff's claim. However, that sum is inclusive of €687,834.23 payable to sub contractors. The defendants have informed the plaintiff that they have in fact discharged all of the monies due to those sub contractors. He accepts that this is so, although he contends that he has seen no evidence of such payment. Giving credit for that payment therefore the balance which is allegedly due is €645,886.62.

22 The next sum in respect of which summary judgment is claimed is one of €564,180 being part of the amount claimed in respect of works carried out by the plaintiff from 1st March, 2004 to 11th May, 2004. It is said that this amount is one which was acknowledged by the defendants” agent as being approved by him and being due to the plaintiff.

23 I will have to examine each of these claims in turn to ascertain whether summary judgment is available to the plaintiff in respect of them. Before doing so I should mention the line of defence which is being taken by the defendants.

24 Apart from denying that the plaintiff is entitled to summary judgment for reasons which I will address presently the defendants also contend that they will be both defending and counterclaiming in these proceedings.

25 First, they contend that there are substantial defects in the works which have been carried out by the plaintiff.

26 Secondly, in so far as he makes a claim for retention monies, they contend that they are not due at the present time in the light of the defects in question.

27 Thirdly, they contend that the claim in respect of sub contractors cannot arise as they have been paid directly.

28 Fourthly, there is a claim that the plaintiff has overcharged the defendants. They contend that the number of hours worked has been inflated and they contend that they are entitled to a discount for under-productivity.

29 The evidence demonstrates that throughout the period when the plaintiff worked on the defendants” property he did so on foot of plans and drawings prepared by the defendants” then architects and engineers. He alleges that throughout the building works he was invited to just three site meetings with those architects and engineers and was not given plans or drawings prepared by them.

30 There was a clerk of works employed directly by the defendants on site at all relevant times. The plaintiff says that it was necessary for him, his foreman and his workmen to...