Tolan v Connacht Gold Co-operative Society Ltd

JurisdictionIreland
JudgeMR JUSTICE MICHAEL PEART
Judgment Date05 May 2016
Neutral Citation[2016] IECA 131
CourtCourt of Appeal (Ireland)
Docket NumberRecord Number: 2015 No. 308
Date05 May 2016

[2016] IECA 131

COURT OF APPEAL

Peart J.

Record Number: 2015 No. 308

Peart J

Irvine J.

Hogan J.

BETWEEN:
FINBAR TOLAN
PLAINTIFF/APPELLANT
- AND -
CONNACHT GOLD CO-OPERATIVE SOCIETY LIMITED
DEFENDANT/RESPONDENT

Contract ? Damages ? Breach of contract ? Appellant seeking damages for breach of contract ? Whether a document constituted a binding contract

Facts: The appellant, Mr Tolan, was a cattle dealer. He bought cattle at marts in Co. Mayo on several days each week and sold them immediately into Dawn Meats with whom he had a long?standing arrangement to buy them. There was some controversy between the parties as to whether Mr Tolan had a contract as such with Dawn Meats, but that question did not touch upon the issue arising on this appeal which was essentially whether a document prepared and signed at the end of a meeting which took place on 16th July 2012 between Mr Tolan and representatives of the respondent, Connaught Gold, constituted a binding contract as contended by the appellant, or was merely an agreed note or memorandum of what was discussed at the meeting as contended by the respondent. Mr Tolan maintained that it was a binding agreement as to the credit terms on which he could buy cattle at the respondent?s mart, that he complied with the pre?conditions upon him, but that at a meeting on 9th August 2012 the respondent company breached the agreement by withdrawing the credit period, thereby putting him out of business since without credit he was unable to buy cattle at the marts. In these proceedings he claimed substantial damages for breach of contract. The High Court found against Mr Tolan and dismissed his claim for damages. It was against that dismissal that Mr Tolan appealed to the Court of Appeal. Mr Tolan submitted that the four necessary constituents of a contract were present, namely an offer, its acceptance, consideration, and an intention to create legal relations. The respondent submitted firstly that there was no evidence of any intention to create legal relations, secondly that there was no consideration, and thirdly that while it did not state for how long the alleged agreement was to last, it could be inferred from the document and the surrounding circumstances that it was to operate up to the 10th August 2012 when at a further meeting it would have been established if Mr Tolan?s overdraft was actually in place, and then if more long term arrangements could be agreed and put in place, which would ensure a reduction in Mr Tolan?s indebtedness at any particular time, including by agreeing some limit on the number of animals that he would buy in any one week ? something which Mr Tolan had not been prepared to even discuss on the 16th July 2012.

Held by Peart J that, in the overall context of the purpose of the meetings in June and July 2012, the document could not be seen as other than one recording an agreement on one aspect of the defendant?s concerns only, with the other being parked until the further meeting which was clearly envisaged so that the defendant could be shown evidence that the anticipated overdraft was in place in time for the new reduced credit period to commence on 12th August 2012. Peart J held that the President was correct to so conclude. Peart J held that it was not open either on the facts or as a matter of law to conclude that the document signed on the 16th July 2012 determined the contractual relations between the parties for some undefined period into the future beyond the 12th August 2012.

Peart J held that he would dismiss the appeal.

Appeal dismissed.

JUDGMENT OF MR JUSTICE MICHAEL PEART DELIVERED ON THE 5TH DAY OF MAY 2016
1

Mr. Tolan was at all material times a cattle dealer. He bought cattle at marts in Co. Mayo on several days each week and sold them immediately into Dawn Meats with whom he had what I will, in a neutral way, refer to as a long-standing ?arrangement? to buy them. There is some controversy between the parties as to whether Mr. Tolan had a contract as such with Dawn Meats, but that question does not touch upon the issue arising on this appeal which essentially is whether a document prepared and signed at the end of a meeting which took place on 16th July 2012 between Mr. Tolan and representatives of Connaught Gold, constitutes a binding contract as contended by the plaintiff, or is merely an agreed note or memorandum of what was discussed at the meeting as contended by the defendant. Mr. Tolan maintains that it was a binding agreement as to the credit terms on which he could buy cattle at the defendant's mart, that he complied with the pre-conditions upon him, but that at a meeting on 9th August 2012 the defendant company breached the agreement by withdrawing the credit period, thereby putting him out of business since without credit he was unable to buy cattle at the marts. In these proceedings he claims substantial damages for breach of contract.

2

Some idea of the scale of the cattle dealing enterprise engaged in by Mr. Tolan by mid-June 2012 can be gained from the fact that in the seven months preceding June 2012 he had bought cattle to the value of about ?3,000,000 at the defendant's marts. Indeed, there was evidence before the High Court that such was his importance to the business being done at marts in this area that farmers would contact Mr. Tolan in advance of mart dates to find out whether he would be attending the mart, as he was known to pay a good price for cattle they might wish to sell. He was also contacted by mart managers to find out if he would be attending. He was clearly an important player in the cattle business in the area, was well respected, and known to meet his financial obligations to the marts, even though the amounts that he might owe to a mart on any particular date would be large by any standards. That is simply a reflection of the quantity of cattle he would have bought in the previous three weeks, and not of any delay on his part in settlement of his account in accordance with credit terms understood between him and the defendant. Prior to the events giving rise to these proceedings he had by agreement three weeks credit on any cattle purchased by him at the marts.

3

Oral evidence was heard in the High Court over four days, and at the conclusion of the hearing Kearns P. in an ex tempore ruling found against Mr. Tolan and dismissed his claim for damages. It is against that dismissal that Mr. Tolan now appeals to this Court.

4

Before considering the basis upon which the President ruled against the plaintiff, I need to set forth some further detail in relation to the course of dealings between parties, and of certain meetings which took place in June, July and August 2012. These meetings were for the purpose of addressing concerns that the defendant had about the level of its exposure at any particular time which resulted not just from the three weeks' credit that the plaintiff enjoyed, but because of the gradual increase in the numbers of cattle being bought by the plaintiff, thereby increasing the level of its exposure should the plaintiff for any reason not be in a position to continue in business. There was always three weeks' cattle purchases unpaid for any particular date under the then arrangements. The defendant wanted to reduce that exposure.

5

Mr. Tolan had been dealing in cattle in this area for twelve to fifteen years prior to these events. During these years there was no written agreement in relation to credit terms, but business was done on the basis of three weeks' credit. What it meant in practical terms was that if he purchased, say, 100 cattle at the mart on a Saturday, he was required on the following Saturday to give the mart a cheque for the amount of that purchase. That cheque would in turn not be presented for payment for a further week. In this way he had the benefit of three weeks' credit which gave him sufficient time to sell the cattle into Dawn Meats, and get paid for them. That in turn would enable the cheque to be met. That modus operandi appears to have worked well and to have been mutually beneficial over a long period. Clearly it was an arrangement that depended upon trust, and there has been no suggestion that at any time prior to June 2012 this necessary ingredient in the relationship was missing.

6

By June 2012, however, there were some concerns. Mr. Tolan was called to a meeting where it was explained to him that the marts were worried about their level of exposure given the amount of animals being bought by Mr. Tolan. He was told that there would have to be some limit agreed both as to the numbers of animals being bought, and a reduction of the period of credit to two weeks instead of three. The explanation given to him at the time was that new regulations had come into force which had to be complied with by the marts. According to some of the evidence given, Mr Tolan immediately became very agitated at the suggestion of any limit to the numbers of animals he could buy, and threatened to walk out of the meeting. However, he eventually agreed to the reduced credit period, but requested that he be allowed a few weeks before the new terms would operate, so that he could arrange an overdraft facility to be put in place to replace the loss of one week's credit. That breathing space was agreed to, and a further meeting was arranged for 16th July 2012 to review the position.

7

Mr. Tolan immediately approached his bank and by 4th July 2012 he had received confirmation from his bank that subject to him fulfilling some usual conditions, such as arranging a life policy as part of the security for the facility, an overdraft of ?200,000 would be put in place.

8

On 16th July 2012 that further meeting took place at which Mr. Tolan produced a letter of offer from his bank for an overdraft facility in the amount of ?200,000. He explained...

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6 cases
  • Hurley Property ICAV v Charleen Ltd
    • Ireland
    • High Court
    • 31 October 2018
    ...out in fine detail (see the consideration of these issues by the Court of Appeal in Tolan v Connacht Gold Co-operative Society Ltd. [2016] IECA 131 and Globe Entertainment Ltd. v Pub Pool Ltd [2016] IECA 272.) Likewise, difficulties exist in seeking to assert that an agreement to agree is e......
  • Finbar Tolan v John Brady and John Dillon-Leetch Both Trading Under the Style and Title of Dillon-Leetch and Comerford Solicitors
    • Ireland
    • High Court
    • 25 July 2021
    ...wrong to dismiss his case. Peart J. (giving the unanimous decision of the Court) in Tolan v Connaught Gold Cooperative Society Limited [2016] IECA 131 rejected the Plaintiff's appeal in May of 2016. While the Court of Appeal considered and dismissed various arguments raised by the Plaintiff......
  • Tolan v Brady Trading Under The Style and Title of Dillon-Leetch & Comerford Solicitors
    • Ireland
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    • 16 March 2023
    ...the Court of Appeal. In a written judgment delivered on 5th May, 2016, the Court of Appeal dismissed the plaintiff's appeal; reported at [2016] IECA 131. 9 . The plaintiff sought leave to bring a further appeal to the Supreme Court, but that was refused in a written ruling delivered on 28th......
  • Tolan v Connaught Gold Co-Operative Ltd
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    ...Court. An appeal on the merits was dismissed by the Court of Appeal on the 5th May 2016 (see Tolan v Connaught Gold Co-Operative Society [2016] IECA 131). An application for leave to appeal to this Court was refused (see Tolan v Aurivo Co-Operative Society Limited [2016] IESCDET 107). In se......
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