Supermacs Ireland Ltd v Katesan (Naas) Ltd

JurisdictionIreland
CourtHigh Court
JudgeMacken
Judgment Date15 Mar 1999
Neutral Citation[1999] IEHC 130
Docket NumberNo.6243p/1998

[1999] IEHC 130

THE HIGH COURT

No.6243p/1998
SUPERMAC'S IRELAND LTD. & MCDONAGH v. KATESAN (NAAS) LTD & SWEENEY

BETWEEN

SUPERMAC'S IRELAND LIMITED AND PATRICK McDONAGH
PLAINTIFFS

AND

KATESAN (NAAS) LIMITED AND PATRICK SWEENEY
DEFENDANTS

Citations:

RSC O.19 r28

BARRY V BUCKLEY 1981 IR 306

GOODSON V GRIERSON 1908 1 KB 761

SUN FAT CHAN V OSSEOUS LTD 1992 1 IR 425

K (D) V K (A) 1993 ILRM 710

O'NEILL V RYAN 1993 ILRM 557

ENNIS V BUTTERLY 1997 1 ILRM 28

CAVERN SYSTEMS (DUBLIN) LTD V CLONTARF RESIDENTS ASSOC 1984 ILRM 24

STATUTE OF FRAUDS 1695

LAC MINERALS V CHEVRON CORP 1995 1 ILRM 161

BOYLE V LEE 1992 1 IR 555

Synopsis

Practice and Procedure

Motion to strike out claim; inherent jurisdiction; plaintiff seeking specific performance of contract to purchase property from defendant; defendant seeking to strike out claim; whether it could be established from proceedings that claim was vexatious or frivolous; whether arrangements reached between parties could not possibly constitute an oral agreement; whether the possible oral agreement was unenforceable because it did not satisfy Statute of Frauds; O.19 r.28, Rules of the Superior Courts.

Held: Application dismissed.

Supermac's Ireland Limited v. Katesan (Naas) Limited - High Court: Macken J. - 15/03/1999

While a court would be entitled to grant an order both as to the declaration sought and as to specific performance if one were to rely on the pleadings alone, it must then decide whether the defendants were entitled to have their relief under the court’s inherent jurisdiction to stay proceedings if they were frivolous or vexatious. The plaintiffs had sought a declaration that they were beneficially entitled to a number of properties set out in a schedule and specific performance of an agreement for the sale by the defendants to them of the properties. The existence of five formal contracts in respect of five of the properties, their inter dependence one upon the other and their overall inter dependence on the asset sale agreement did not mean that an overall agreement in respect of six properties had never been entered into. In the circumstances it would not be appropriate to strike out the proceedings at this point in time. The last thing that could be said about these proceedings was that there was an area in which there were undisputed facts. The High Court so held in refusing the relief claimed.

JUDGMENT OF Mrs JUSTICE
Macken
1

delivered the 15th day of March 1999.

2

The Defendants seek by the motion dated the 20th October, 1998 to have the Plaintiffs' Statement of Claim struck out in its entirety. They seek this order pursuant to the provisions of Order 19 Rule 28 of the Rules of the Superior Courts and under the inherent jurisdiction of this Court.

3

Order 19 Rule 28 reads as follows:

"The Court may order any pleading to be struck out, on the grounds that it discloses no reasonable cause of action or answer and in any such case or in cases of the action or defence being shown by the pleadings to be frivolous or vexatious, the Court may order the action to be stayed or dismissed, or Judgment to be entered accordingly, as may be just".

4

Quite apart from this rule, the Court also has an inherent jurisdiction to stay proceedings if they are frivolous or vexatious or if they put forward a claim which must fail. It is this inherent jurisdiction which has been relied on to some considerable extent by the Defendants in this application, although I propose to deal with the application pursuant to the Rules and pursuant to the Court's inherent jurisdiction.

5

Insofar as concerns the principles applicable to the Court exercising its jurisdiction on the basis of its inherent powers, the principles have been considered in a number of cases,and the starting point is almost invariably the case ofBarry -v- Buckley (1981) IR 306 in which Costello J. said (at p. 308):

" The principles on which the Court exercises this jurisdiction are well established. Basically, its jurisdiction exists to ensure that an abuse of the process of the Courts does not take place. So, if the proceedings are frivolous or vexatious they will be stayed. They will also be stayed if it is clear that the Plaintiff's claim must fail: per Buckley LJ in Goodson -v- Grierson, 1908 1KB 761 at 765.

This jurisdiction should be exercised sparingly and only clear cases: but it is one which enables the Court to avoid injustice, particularly in case whose outcomes depends on the interpretation of a contract or agreed correspondence".

6

The matter arose again in the case ofSun Fat Chan -v- Osseous Limited (1992) l IR 425 where, in the Supreme Court, it was stated by McCarthy J (at p. 428):

"Generally the High Court should be slow to entertain an application of this kind and grant the reliefs sought. Experience has shown that the trial of an action will identify a variety of circumstances perhaps not entirely contemplated at earlier stages in the proceedings: often times it may appear that the facts are clear and established but the trial itself will disclose a different picture. With that qualification, however, I recognise the enforcement of a jurisdiction of this kind as a healthy development in our jurisprudence and one not to he disowned for its novelty though there may be a certain sense of disquiet at its rigour".

7

Again the issue inD.K. -v- A.K. (1993) l LRM 710 in which Costello J. again enunciated the principles which he had previously stated in Barry -v- Buckley, in the following terms:

"What I am required to consider therefore is whether any of the claims against all or any of the Defendants is so clearly unsustainable that I should strike it out".

8

The matter was again considered in the Supreme Court inO'Neill -v- Ryan (1993) lLRM 557, when that Court approved expressly the approach adopted by Costello J. in the case last cited.

9

All of these cases were considered and the principles again applied more recently by the High Court inEnnis -v- Butterly. (1997) 1 lLRM 28.

10

Dealing first with the application made pursuant to Order 19 Rule 28, the Plenary Summons issued on the 25th May, 1998 and seeks, effectively, two reliefs namely a declaration that by virtue of a recited agreement the Plaintiffs are beneficially entitled to the property set out in the schedule and an order for specific performance of the agreement (dated 7th November. 1997) for the sale by the Defendants to the Plaintiff of the property which is set out in the schedule. The Statement of Claim was delivered on the 25th November, 1998 and after the appropriate recitals pleads in the following terms:

11

2 '5. At all material times up to 7th November, 1997 the first and/or second named Defendants and/or Katesan Limited operated Supermac's franchised fast food outlets at various locations throughout the country including Rosrea, Thurles, Loughrea, Tullamore and Kilkenny.

12

3 6.By an agreement in writing and/or evidenced in writing dated 7th November, 1997 (hereinafter referred to as "the agreement") and varied in or about 14th November, 1997 and made between the second named Defendant, acting on his own behalf and on behalf of the first named Defendant and Katesan Limited, of the one part and the second named Plaintiff acting on his own behalf and/or on behalf of the first named Plaintiff of the other part, the second named Defendant agreed to, interalia, sell to the first and/or second named Plaintiffs the various fast food outlets identified in paragraph 5 hereof. the businesses pertaining thereto and the premises for an aggregate consideration of £4,000,000"

13

The Plaintiff pleaded that they were at all times ready, willing and able to complete the purchases of the premises.(or more particularly the outstanding premises) for a consideration which the Plaintiff claims was £370,000. The significance of the difference between £370,000 on the one hand and the £4,000,000 referred to at paragraph 6 of the Statement of Claim is that the Defendants had already sold to the Plaintiffs the several other properties mentioned in paragraph 5 the sum of £3,630,000.

14

The premises in question are those premises known as 6 South Main Street. Naas in the Country of Kildare, as well as part of the lands situated off South Main Street in the town and parish of Naas comprising 85 sq. metres or thereabouts. I mention these as a brief shorthand manner of describing the property.

15

There is, of course, no defence delivered to the claim because the Defendants have quite properly moved as soon as possible after the delivery of the statement of claim, to strike out the claim.

16

In considering whether or not to accede to an application based on Order 19 Rule 28th Court should consider the pleadings only, ignoring for the purposes of this Rule of the Superior Courts, any affidavit evidence filed. To succeed under this Order, it must be established from the pleadings that the claim is vexatious or frivolous; seeCavern Systems (Dublin) Ltd. -v- Clontarf Residents Association (1984) lLRM 24. From a consideration of pleadings it seems to me impossible to suggest that the Defendants could be certain that a Court would not accede to the order sought by the Plaintiffs. All the ingredients which would entitle the Plaintiffs to have an order on the statement of claim. absent any evidence or any defence, are such as to justify a Plaintiff moving for Judgment. I am of the view that a Court would be entitled to grant an order both as to the declaration sought and as to the specific performance, if one were to rely on the pleadings alone.

17

In these circumstances I find that the Defendants have not made out a case insofar as Order 19 Rule 28 is concerned.

18

Turning now to the question as to whether or not the Defendants are entitled to have their relying on the inherent jurisdiction of the Court, when one is considering a claim of this...

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