Ryan v FAS
| Jurisdiction | Ireland |
| Judge | Ms. Justice Murphy |
| Judgment Date | 30 November 2015 |
| Neutral Citation | [2015] IEHC 777 |
| Docket Number | [2011 No. 11279P] |
| Court | High Court |
| Date | 30 November 2015 |
[2015] IEHC 777
THE HIGH COURT
Murphy Deirdre J.
[2011 No. 11279P]
Tort – Damages & Restitution – Negligent misrepresentation – Breach of contract – Damages – Doctrine of legitimate expectation
Facts: The plaintiff sought an order for damages for breach of contract and negligent misrepresentation against the defendants as the plaintiffs suffered huge financial losses by purchase of the requisite premises by the third named plaintiff solely for second named defendant upon assurance given by the first named defendant that the said premises would be leased to the second named defendant on agreed rent between the plaintiffs and the defendants. The second and third named plaintiffs being the beneficiary of the pension fund operated by the first named plaintiff alleged that the proposal to invest their pension fund was conditional on a commitment made by the first named defendant to lease the said premises with acknowledgement to the second named defendant.
Ms. Justice Murphy granted an order for damages as pleaded by the plaintiffs. The Court, however, refused to grant an order for interest on the relevant amount on the basis of delay in pursuing the claim against the defendants on time. The Court held that the first named defendant was fully aware that the plaintiffs would rely on the information/assurance given by it for making a decision on whether to enter into a transaction or not. The Court found that it would be unconscionable for the first named defendant having misled the third named plaintiff to purchase the said premises on the basis of the commitment to rent the said premises as evidenced by the pre-contract negotiations and the letter of confirmation sent by the first named defendant to the third named plaintiff. The Court held that the second named defendant was not guilty of any negligence and misrepresentation as it had merely acted on the advice of the first named defendant in the capacity of the agent.
The plaintiffs in these proceedings seek damages for misrepresentation; damages for negligent misstatement; and damages for negligence and breach of duty. In the alternative they seek a declaration that they were entitled to a legitimate expectation that the first named defendant would enter into a lease of Unit 31 Airways Industrial Estate, Swords Road, Dublin at an initial annual rent of €82,000 per annum from in or about September, 2009 and damages in respect of the breach of the said legitimate expectation. The Court proposed, and the parties agreed, that the Court would first consider the issue of negligence and thereafter, if necessary, proceed to consider the issue of legitimate expectation.
The plaintiffs in these proceedings are trustees of a retirement benefit scheme operated by the first named plaintiff on behalf of the second and third named plaintiffs who were beneficial owners of the funds of the scheme. The first named defendant is a state body with responsibility for training and employment. The second named defendant, Ballark Community Trading Centre Limited (“Ballark”) is a limited liability company engaged in the business of providing industrial training under the control, supervision and management of the first named defendant.
The second named defendant, Ballark, operated its community training schemes from a rented premises situated at Shanowen Road in Santry. Ballark was described by counsel for the plaintiffs at the outset of these proceedings as a ‘creature’ of FÁS. Ballark Community Training Centre is one of a number of such centres located around the country which are wholly dependent and interdependent on FÁS and its successor. FÁS established a structure whereby each community training centre established itself as a limited liability company with a separate corporate identity. However Ballark was, at all times, wholly financially dependent on FÁS. The Board of Directors of Ballark operated on a voluntary, unpaid basis and consisted of well-meaning, often retired members of the local community who had an interest in contributing to the welfare of their local community by assisting in the development of the youth of the area. A representative of FÁS, who was not a member of the Board, would attend Board meetings to keep FÁS apprised of the operation of the company. At the time of the events giving rise to these proceedings, the FÁS representative assigned to Ballark was a Mr. Pat Murray, a Development Officer with FÁS. Ms. Grogan, the manager of Ballark, gave evidence that Ballark CTC had to bid for its budget each year which it received from FÁS. She stated that such budget was tightly controlled and that Ballark had no alternative source of funding such that they could not act without the approval of, and payment from, FÁS. They were conscious at all times of the need for prior approval from FÁS for any proposed action.
The Court heard evidence from the following witnesses; Mr Paul Ryan, the first named plaintiff who is a professional trustee and, as such, is trustee of a pension scheme operated on behalf of the second named and third named plaintiffs. The second named plaintiff, Ms. Ellen Healy, is a woman in her late sixties who is a beneficial owner of the fund operated by the first named plaintiff. The third named plaintiff, Mr. Billy Hayes, is a 63 year old man who, at the time of the events giving rise to these proceedings, was managing director of a company called Pierce Healy Developments, which was owned by Mr. Hayes and the Healy family and which was engaged in the building trade. On behalf of FÁS the Court heard evidence from Mr. Frank Fagan who, at all material times, was Community Services Manager with FÁS and, as he informed the Court, in that capacity was responsible for all community training centres in Dublin. The Court also heard from Mr. Michael O'Riordan who took over the duties of Mr. Fagan in or around July 2008. Ms. Ann Grogan, manager of Ballark Community Training Centre, gave evidence to the Court on behalf of Ballark.
In late 2006, Ballark received notice from its landlord informing them that he did not intend to renew their lease agreement on the premises at Shanowen Road, Santry on the grounds that he intended to sell the property. Ms. Grogan of Ballark told the Court that they were permitted to remain on the premises in a caretaker capacity. A search for new premises began. Ballark's voluntary Board of Directors, in a meeting of 11th April, 2007, discussed the possibility of moving to an alternative premises at Unit 31 Airways Industrial Estate, Swords Road, Dublin (“the premises”). Mr. Pat Murray, the FÁS representative who attended the Board meetings of Ballark, noted that he had seen the premises and believed it to be ideal for their purposes. Ms. Grogan gave evidence that she believed that this building was suggested by Mr. Frank Fagan, the Community Services Manager, although she was not certain about this. Around this time Ms. Grogan viewed the premises at Airways Industrial Estate. Initially, Ballark hoped to lease the premises from its owner, with FÁS guaranteeing such a lease, or confirming funding for rent payments. However, the owner was not interested in leasing the premises, and instead expressed a desire to sell it. According to Ms. Grogan, at a Board meeting of Ballark on 9th May, 2007, the representative of FÁS, who was noted to be Mr. Frank Fagan, suggested that the Board of Ballark approach the bank with a view to securing the finance necessary to purchase the Airways unit. However the Chairman of the Board, Mr. Paddy Donegan, not surprisingly, being the Chairman of a Board of volunteers, was unwilling to take on such a responsibility. FÁS at that point was not prepared to provide the capital sum needed to purchase the building.
Contemporaneously with these events, in early 2007, the third named plaintiff, Mr. Billy Hayes, was engaged to perform maintenance work for Ballark in their original premises, his company having been successful in tendering for the relevant contract. In conversation with Ms. Grogan he was told that notice to vacate the premises had been served on Ballark by its landlord. She also told him that Ballark's Board of Directors and FÁS had identified an alternative premises at Airways Industrial Estate which it wished to lease. Ms. Grogan asked Mr. Hayes to inspect the premises and told him that the new premises would need refurbishment. Mr. Hayes was first of all mindful of the potential opportunities this might present for his building company. At Ms. Grogan's request, he inspected the premises and reported to Ballark that it required significant work, including insulation and specialist treatment of an asbestos roof. Mr. Hayes further reported to Ballark that the premises were ‘rough’ and advised them that there were other premises in the locality that were in better condition offering better value. Ms. Grogan explained to Mr. Hayes that Ballark had a specific interest in this particular premises because of its location beside a bus stop which would mean it could accommodate its trainees, many of whom used public transport.
On being told of Ballark's difficulties in relation to the purchase of the Airways premises by Ms. Grogan, Mr. Hayes suggested that he might be able to use money from his pension fund to purchase the premises for the purpose of leasing it to Ballark. Mr. Hayes gave evidence that he insisted that before doing so he would need a guarantee from FÁS. He was aware that Ballark's funding was entirely dependent on FÁS.
Mr. Hayes discussed the proposal with the second named plaintiff, Ms. Healy, his fellow beneficiary;...
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