The Minister for Communications and Others v Figary Watersports Development Company Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice William M. McKechnie
• Judgment Date: 19 January 2012
• Neutral Citation: [2012] IEHC 601
• Court: High Court
• Date: 19 January 2012

[2012] IEHC 601

THE HIGH COURT

[No. 3374 P/2005]

Min for Communications v Figary Watersports Development Co Ltd

BETWEEN

THE MINISTER FOR COMMUNICATIONS, MARINE AND NATURAL RESOURCES

PLAINTIFF

AND

FIGARY WATERSPORTS DEVELOPMENT COMPANY LIMITED

DEFENDANT

LANDLORD & TENANT LAW AMENDMENT (IRL) ACT 1860 S52

CONVEYANCING ACT 1881 S14(2)

CROFTER PROPERTIES LTD v GENPORT LTD 2002 4 IR 73

MEAGHER & ANOR v LUKE J HEALY PHARMACY LTD 2010 3 IR 743

EMERALD MEATS LTD v MIN FOR AGRICULTURE & ORS UNREP FEENEY 8.10.2007 2007/22/4535 2007 IEHC 331

IDEAL FILM RENTING CO LTD v NEILSEN 1921 1 CH 575

RENDELL v ROBERTS & STACEY LTD 1960 175 EG 265

TRELOAR & ORS v GOSSMAN 1966 201 EG 767

LANDLORD & TENANT (AMDT) ACT 1980 S66(1)

LANDLORD & TENANT (AMDT) ACT 1980 S66

WHELAN v MADIGAN 1978 ILRM 136

BRITISH TELECOMMUNICATIONS PLC v SUN LIFE ASSURANCE SOCIETY PLC 1995 3 WLR 622

BEACON CARPETS LTD v KIRBY 1984 3 WLR 489

JAMES v HUTTON 1950 1 KB 9

WYLIE LANDLORD & TENANT 2ED PARA 15.20

WATTS v MARROW 1991 1 WLR 1421

JOHNSON v LONLEAT PROPERTIES (DUBLIN) LTD 1976-77 ILRM 93

FOLEY v SKINNER 2001 3 WLR 899

COURTS ACT 1981 S22

HAYMAN & ANOR v ROSE 1912 AC 623

CUE CLUB LTD & ORS v NEVARO LTD UNREP SUPREME 23.10.1996 1998/14/5185

SWEENEY v POWERSCOURT SHOPPING CENTRE LTD 1984 IR 501

WHIPP v MACKEY 1927 IR 372

BLAKE v HOGAN 1933 ILTR 237

ENNIS v RAFFERTY 1938 72 ILRN 56

WYLIE LANDLORD AND TENANT LAW 2ED 1998 PARA 24.21

JAGGARD v SAWYER 1995 1 WLR 280

BRACEWELL v APPLEBY 1975 CH 408

EMERALD MEATS LTD v MIN FOR AGRICULTURE 1997 1 IR 1

RATCLIFFE v EVANS 1892 2 QB 524

CALLINAN v VOLUNTARY HEALTH INSURANCE BOARD UNREP SUPREME 28.7.94 1994/8/2192

MCGREGOR ON DAMAGES 15ED 1988 PARA 344

MALETT v MCMONAGLE 1970 AC 166

ALLIED MAPLES v SIMMONS & SIMMONS 1995 4 AER 907

NORTH SEA ENERGY HOLDINGS MV v PETROLEUM AUTHORITY OF THAILAND 1999 1 AER (COMM) 173

DAMAGES

Award

Foreshore lease to construct marina - Both parties in breach of covenant - General damages - Damages for breach of statutory duty - Whether withholding of consent by lessor unreasonable - Damages for breach of covenant - Special damages for loss of earnings - Damage to reputation - Relief against forfeiture subject to rent payment - Mesne rates sought for encroachment on land - Damages for inconvenience and stress - Calculation of damages - Whether entitlement to damages where consent unreasonably withheld - Whether foreshore tenement - Positive covenant - Whether breach caused damage - Whether any loss incurred - Restitutio in integrum - Whether damage reasonably foreseeable -Whether claim for damages properly before court - Whether loss of earnings - No evidence as to value of loss - Conduct of both parties - Whether entitlement to interest on outstanding rent - Terms imposed on grant of forfeiture relief discretionary - New clause inserted in lease - Whether damages to be awarded for trespass payable by reference to rent - Whether breach of covenant adequately compensated by special damages - Whether failure to mitigate loss - Whether contributory negligence - Callinan and Deane v VHI (Unrep, SC, O'Flaherty J, 28/7/1994) and Emerald Meats Ltd v Minister for Agriculture [1997] 1 IR 1 applied - Bracewell v Appleby [1975] Ch 408; Hayman and Another v Rose [1912] AC 623; Jaggard v Sawyer [1995] 1 WLR 280; James v Hutton [1950] 1 KB 9; Malett v McMonagle [1970] AC 166 and Ratcliffe v Evans [1892] 2 QB 524 approved - Allied Maples v Simmons & Simmons [1995] 4 All ER 907; Beacon Carpets Limited v Kirby [1984] 3 WLR 489; Blake v Hogan [1933] ILTR 237 British Telecommunications plc v Sun Life Assurance Society plc [1995] 3 WLR 622; Cue Club Ltd and Others v Nevaro Ltd (Unrep, SC, 2310/1996); Emerald Meats Ltd v Minister for Agriculture [2007] IEHC 331, (Unrep, Feeney J, 8/10/2007); Ennis v Rafferty [1938] 72 ILRN 56; Foley v Skinner [2001] 3 WLR 899; Johnson v Longleat Properties (Dublin) Ltd [1976- 1977] ILRM 93; Ideal Film Renting Company Limited v Neilsen [1921] 1 Ch 575; Jiminez v Morrisey [2006] IEHC 18, (Unrep, O'Neill J, 31/1/2006); North Sea Energy Holdings MV v Petroleum Authority of Thailand [1998] EWCA Civ 1953; Rendell v Roberts & Stacey Limited [1960] 175 EG 265; Sweeney Ltd v Powerscourt Shopping Centre Ltd [1984] IR 501; Treloar and Rose v Gossman [1966] 201 EG 767; Watts v Marrow[1991] 1 WLR 1421; Whelan v Madigan [1978] ILRM 136 and Whipp v Mackey [1927] IR 372 considered - Crofter Properties Limited v Genport Limited [2002] 4 IR 73; Emerald Meats Ltd v Minister for Agriculture [2007] IEHC 331, (Unrep, Feeney J, 8/10/2007) and Meagher v Luke J Healy Pharmacy Limited [2010] IESC 40, [2010] 3 IR 743 distinguished - Landlord and Tenant Amendment (Ireland) Act 1860 (23 & 24 Vict, c 154), s 52 - Conveyancing Act 1881 (44 & 45 Vict, c 41), s 14(1) - Landlord and Tenant (Amendment) Act 1980 (No 10), s 66(1) - Courts Act 1981 (No 11), s 22 - Damages awarded against plaintiff for breach of statutory duty; compensation awarded to defendant for loss of earnings; defendant ordered to pay rent and interest on rent, mesne rent and to comply with covenants (2005/3374P - McKechnie J - 19/1/2012) [2012] IEHC 601

Minister for Communications, Marine and Natural Resources v Figary Watersports Development Company Limited

On the 26 ^th April 1993, the plaintiff demised an area of foreshore to the defendant for the specific purpose of developing and maintaining a marina. The plaintiff brought proceedings some years later which claimed that the defendant had breached several provisions of the lease, specifically that the construction of the marina was not completed within the agreed timeframe (or at all) and that the reserved rent was not paid. The plaintiff sought a number of reliefs, chief amongst which was repossession of the land pursuant to a notice of forfeiture issued on the 12th June 1998 and s. 52 of the Landlord and Tenant Law Amendment (Ireland) Act 1860. The defendant denied there was any breach on its part, claiming that the number of unreasonable interventions by the plaintiff was the cause of the delay in the project, and that the historic rent owed should be waived, at least partially, for that reason. A number of counter claims were made for the plaintiff”s actions.

There were two judgements in this case. The first judgment was made on the 10 ^th September 2010 where it was decided that the lease between the parties would remain active as the court would grant relief against forfeiture under s. 14(2) of the Conveyancing Act 1881 and that the defendant was entitled to damages for the unreasonable actions of the plaintiff, most notably €1,545,000 for a breach of statutory duty for failing to process an application for grant aid under an EU scheme called "Interreg IIIA", which resulted in a significant missed opportunity for the defendant. The case was then adjourned so further submissions could be made before a decision was made on whether conditions should be imposed on the relief made as well as the amount of general damages to be made in relation to the Plaintiff's unreasonable withholding of consent and breach of statutory duty and in relation to the Defendant's trespass or breaches of covenant.

Held by McKechnie J that the plaintiff was to be awarded the sum of €212,909.65 for the arrears of rent and interest up and including the date of the 31st December 2011. It was further found that parts of the partially constructed marina encroached over the boundaries of the demised land and that the plaintiff should be awarded €13,938.12 compensation for trespass. However, the area was now seen as necessary for the development of the project and a further order was made directing the Plaintiff to demise the trespass area, in favour of the Defendant until the expiration of the lease for the original demised land. The extra lease was to be on the same terms and conditions with rent at pro rata.

It was further ordered that a number of terms and conditions would be imposed on the order against forfeiture of the lease. These included the defendant paying the arrears of rent and interest, an updated Schedule of Works and related documentation forwarded to the plaintiff, consulting engineers of sufficient skill being retained to complete the project, and that the sum of €1,545,000 awarded for breach of statutory duty to be solely applied for the completion of the project to a satisfactory standard. €2,054,000, representing damages for breach of statutory duty, and which was inclusive of the €1,545,000 figure, was also awarded to the defendant. Finally, an order was made directing the defendant to procure a bond in favour of the Plaintiff per an agreement made between the parties in 2000 in consideration of the project. The bond was to be in the sum of €317,434.52, covering all works set out in the Schedule of Works.

Orders as described above made.

1 JUDGMENT of Mr. Justice William M. McKechnie delivered on the 19th day of January 2012

2 1. This is the second judgment given in this case. The first, delivered on the 3 ^rd September 2010, "the main judgment", which dealt with the issues as pleaded and pursued at trial, left over certain matters which resulted therefrom, so that the parties could have an opportunity of making further submissions thereon. That having now been availed of, this judgment deals with these outstanding matters. First however, a brief word about the background, so as to contextualise this decision.

3 2. By Indenture dated the 26 ^th April 1993 ("the lease"), the Plaintiff demised an area of foreshore, comprising ten hectares or thereabouts, situated at Fahan, County Donegal, upon which the Defendant was obliged to construct a marina and thereafter to operate that facility as such. The term was 99 years from the 1 ^st January 1993, and the marina was to be constructed in accordance with...