O'Reilly v Neville

CourtHigh Court
JudgeMr Justice Donald Binchy
Judgment Date18 January 2018
Neutral Citation[2018] IEHC 228
Docket Number[RECORD NO. 2011 7987 P]
Date18 January 2018

[2018] IEHC 228


Binchy J.

[RECORD NO. 2011 7987 P]




Practice & Procedure – Breach of contract – Damages – Costs – Specific performance – Rejection of offer

Facts: The issues between the parties pertained to the award of costs. The plaintiffs claimed the costs of the entire proceedings as they were successful in obtaining an order for specific performance of the building agreement, thereby requiring the defendants to repair the subject premises. The defendants asserted that had the plaintiffs accepted their offers prior to and during the proceedings, the costs of the litigation would have been saved.

Mr. Justice Donald Binchy held that the defendants should be awarded all the costs incurred by them in the proceedings from the relevant time save only those costs that were incurred in connection with the claim of the plaintiffs for the reimbursement of the cost of renting an alternative accommodation. The Court also held that the plaintiffs were entitled to an order for all other costs incurred by them in the proceedings together with the costs related to the renting of an alternative accommodation. The Court awarded a certain sum to the plaintiffs, which would be credited against the costs liability of the plaintiffs to the defendants, for the work done by the plaintiffs' engineer.

COSTS RULING of Mr Justice Donald Binchy delivered on the 18th day of January, 2018

On 31st July, 2017, I handed down judgment (the ‘principal judgment’) in these proceedings. In summary, I made an order for specific performance, in favour of the plaintiffs of a building agreement entered into between the parties on 30th March, 2005 (the ‘building agreement’), and I also ordered that the defendants pay the plaintiffs the cost of renting alternative accommodation since they vacated, in August, 2010, the dwellinghouse constructed for them by the defendants pursuant to the building agreement. I left over the issue of costs pending submissions from the parties which I heard on 13th December, 2017.


In the proceedings, the plaintiffs claimed rescission of the building agreement, together with an order for repayment to the plaintiffs of the contract price provided for therein and paid to the defendants by the plaintiffs. In the alternative, the plaintiffs claimed damages for breach of contract, negligence and breach of duty. At the conclusion of the hearing, the plaintiffs abandoned their claim for rescission of contract and instead sought damages for breach of contract comprising special damages of €97,000, being the estimated cost of repairs required to be undertaken to the dwellinghouse, special damages in respect of the cost of renting alternative accommodation (which at the conclusion of the trial amounted to of the order of €75,000) and general damages in respect of the adverse impact upon the lives of the plaintiffs caused by the defects in the dwellinghouse. By reference to the decision of this court in the case of Mitchell and Anor v. Mulvey Developments Ltd & Ors [2014] IEHC 37, counsel for the plaintiffs invited the Court to measure general damages at the rate of €10,000 for each year since the plaintiffs were required to leave the dwellinghouse. In the event, I acceded to submissions made on behalf of the defendants that the appropriate order should be one of specific performance, thereby eliminating the amount claimed for cost of repairs. I made no order in respect of the general damages claimed. And, as mentioned above, I did make an order requiring the defendants to discharge all of the costs incurred by the plaintiffs, since they left the dwellinghouse, in renting alternative accommodation, pending the carrying out works of repairs by the defendants in the manner directed in the principal judgment.


As regards the costs of the proceedings, it is submitted on behalf of the plaintiffs that in obtaining an order for specific performance of the building agreement, they have succeeded in the ‘event’ in the proceedings and that, accordingly, they are entitled to an order for the costs incurred by them in obtaining this order in accordance with the general principle that costs follow the event. It is submitted that there is no reason to depart from the general rule. Counsel for the plaintiffs relies upon the decision of the Supreme Court in Dunne v. Minister for the Environment [2007] IESC 60. Counsel for the plaintiffs further submitted that this is not a case in which the Court should depart from the general rule that costs follow the event for reasons such as those articulated by Clarke J. in Veolia Water UK PLC v. Fingal County Council (No 2) [2006] IEHC 240. It was further submitted by counsel for the plaintiffs that the issues that gave rise to the court departing from the general rule in Veolia were complex issues dealt with at interlocutory hearings that added substantially to the costs of those proceedings, and that no such issues arise in this case.


On behalf of the defendants, it is submitted that this was a complex case, that it is necessary for the court to analyse the ‘event’ and in particular that it is necessary for the court to take into account the various opportunities afforded to the plaintiffs, by the defendants, to resolve the dispute. In this regard, counsel refers to the following: -

(1) An offer made in writing by Mr Seamus Neville, on 13th July, 2010, to address the issues raised by the plaintiffs. The defendants suggested starting remedial works in August 2010, but at this point the plaintiffs decided to instruct a new consulting engineer to advise them, their previous engineer having advised them that further investigations into the state of the dwellinghouse were required. So they did not respond to the defendants' offer, and instead instructed Mr Declan Gibbons, Consulting Engineer to prepare a report on the state of the dwellinghouse. Mr Gibbons presented his report to the defendants in late 2010.

(2) The defendants then obtained a report from a consulting engineer of their own, a Mr Paul Forde, following which the defendants made an offer to carry out the works identified by Mr Forde as being necessary to remedy the defects in the dwellinghouse. This was in April, 2011. Mr Forde's report did not specifically address the problem of mould in the attic which was a key issue for the plaintiffs, and their consulting engineer. There was no response to this offer.

(3) An offer made in writing on 5th April, 2012, by the solicitors for the defendants to the solicitors for the plaintiff. I quoted an extract from this letter in the principal judgment which bears repeating here:-

‘…we confirm that our clients are prepared without admission of liability to carry out all of the works recommended to be carried out in the report of DBFL Consulting Engineers together with such other works which your...

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