Tom O'Driscoll v Seamus Dunne and Others

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr. Justice Bernard J. Barton
• Judgment Date: 11 February 2015
• Neutral Citation: [2015] IEHC 100
• Judgment citation (vLex): [2015] 2 JIC 1106
• Date: 11 February 2015

[2015] IEHC 100

THE HIGH COURT

[No. 111215 P/2012]

O'Driscoll & Dunne v McDonald

BETWEEN

TOM O'DRISCOLL

AND

SEAMUS DUNNE

PLAINTIFFS

AND

LARRY McDONALD, DEIRDRE McDONALD AND BARNEY McDONALD

DEFENDANTS

Civil Procedure – O. 19, r. 28 of the Rules of the Superior Courts – Breach of Contract – Vexatious or Frivolous Claim – Abuse of Process – Striking out proceedings

Facts: The defendants brought a motion for an order pursuant to O. 19, r. 28 of the Rules of the Superior Courts to have proceedings struck out on the basis they were frivolous, vexatious and there was no reasonable cause of action. Alternatively, the defendants sought an order pursuant to the jurisdiction of the court to have the proceedings struck out because they were frivolous, vexatious and constituted an abuse of process. The parties had been involved in a number of contracts in relation to the purchase of land and the construction of property. Differences arose between the parties meaning the plaintiffs owed the first and third defendants €320,000 as €30,000 had already been paid by the second named defendant. The first named defendant hired a debt collection agency to obtain the outstanding sum from the plaintiffs. In the previous proceedings, the President of the High Court said the agency behaved so badly that the Gardai had to intervene.

The first and third defendants brought proceedings against the plaintiff by way of plenary summons to recover the outstanding sum. The President of the High Court determined that the first and third defendants had proved their case and the plaintiffs were ordered to pay €320,000. The President”s judgment made it clear that no order had been made in relation to any counterclaims or costs. Furthermore, no appeal had been taken against the judgment of the President of the High Court. The defendants made eight submissions.

Firstly, that the plaintiffs wanted to litigate the same issues dealt with in previous proceedings. Secondly, all the issues raised in the previous proceedings were concluded and the matters were res judicata. Thirdly, the plaintiff”s failure to amend proceedings over losses incurred meant the losses could not be made the subject of new proceedings. Fourthly, the previous proceedings dealt with all relevant matters and were resolved in favour of the first and third defendants. Therefore, the matters were res judicata and further proceedings would amount to an abuse of process.

Fifthly, the court”s jurisdiction to strike out pleadings was not restricted. Sixth, the plaintiffs should be estopped from joining the second named defendant to proceedings and maintaining a claim against her when her interests in the proceedings were the same as her husbands. Seventh, no authority existed to enable the plaintiffs to proceed on issues that had already been decided. Lastly, the plaintiff”s failure to make an application in relation to their fiscal losses meant they were precluded from pursuing such a claim. The plaintiffs submitted that the President had confined himself to the claim for €320,000 and their counterclaims had not been determined.

Held by Barton J: The court refused the defendant”s application to strike out proceedings under Order 19, Rule 28. The court determined that the plaintiff”s claim was not bound to fail and there was no evidence of vexation or frivolity in their statement of claim. The court determined that the second named defendant was not party to the previous proceedings and the essential requirements for a plea of res judicata had not been made out. Furthermore, the requirements to render the second named defendant privy of the first or third named defendants in law were not satisfied. The court determined that no adjudication had been made on the merits of the second named plaintiff”s action in negligence, the claim of both plaintiffs for breach of contract or the alleged losses as a result of the breach of contract. As a result, these issues were not res judicata.

There was no adjudication on whether or not the first and third named defendants were vicariously liable for the actions of the debt collection agency and again the doctrine of res judicata did not apply. The court concluded that the High Court in the previous proceedings confined itself to determining the claim to recover payment of €320,000. This did not mean that the plaintiffs intended to abandon any cause of action pleaded in their counterclaims or otherwise. The court exercised its discretion not to strike the proceedings or any part of them out on the basis that they were frivolous, vexatious or an abuse of process.

1 JUDGMENT of Mr. Justice Bernard J. Barton delivered the 11th day of February, 2015

2 1. There are a number of motions before the court brought by both the plaintiffs and the defendants, however, it has been agreed between the parties that this motion should be dealt with first.

3 2. This matter comes before the court by way of the defendants motion on notice for an order pursuant to the provisions of 0. 19, r.28 of the Rules of the Superior Courts striking out the proceedings on the grounds that the pleadings disclose no reasonable cause of action and are frivolous and vexatious, alternatively, for an order pursuant the inherent jurisdiction of the court to strike out the proceeding on the grounds that they are frivolous, vexatious, must fail, and are an abuse of process.

Background - Litigation History

4 3. In order to place this application in context, it is considered both useful and necessary to summarise the factual background giving rise to these proceedings and which includes the judgment and order of this Court made in a previous suit brought by the first and third defendants against these plaintiffs.

5 4. Historically, the parties to these proceedings were involved in a number of contracts which commenced in 2005 and which may be summarised as follows:

6 (a) A contract for the purchase of land dated the 21 ^st October, 2005 made between the first and third defendants as vendors and the first named plaintiff (in trust for himself and the second named plaintiff) at a purchase price of €1.3m. It was condition of that contract that the plaintiffs would build three dwelling houses on certain lands to a shell finish in accordance with certain plans and specifications on or before the 1 ^st September, 2007. The sale was duly completed on the 30 ^th November, 2005. Shortly after the completion the plaintiffs resold the lands to Rolan Homes Limited, that sale being concluded on the 12 ^th May 2006.

7 (b) Subsequent to the resale of the lands, the plaintiffs agreed to purchase from the first and second named defendants a dwelling house and shed on 0.75 acres of zoned lands for €500,000. This contract was dated the 2 ^nd June, 2006 and was to be completed on the 31 ^st July, 2006. It was a term of that contract that on closing the first and second named defendants would enter into a caretaker's agreement with the plaintiffs allowing them to remain in possession of the dwelling house and lands for six months from the date of completion of the sale.

8 (c) By a further contract of even date, the plaintiffs agreed to purchase from the second and third defendants 26 acres of partially zoned lands for €2m. This sale was to be completed on the 13 ^th April, 2006. The contract provided that the vendors would be entitled to the use of the lands for agricultural purposes from the date of completion of the sale until the land would be required by the purchasers for development or on the happening of other events specified in the contract and that the defendants would on closing execute a caretaker's agreement. This contract also provided that the plaintiffs were to bring the houses, to be built by them to a shell finish under the contract at (a) above, up to builder's finish within 36 months of the closing.

9 (d) By a further agreement made between the plaintiffs and the first and third defendants in or about the month of November 2007, it was agreed that the terms of the first and third contracts at (a) and (c) above would be varied by providing for the payment by the plaintiffs of €350,000 to the first and third defendants in lieu of the obligation to construct the three houses.

10 5. By the caretaker's agreement dated the 6 ^th November, 2006, the first and second named defendants acknowledged that the dwelling house shed and adjoining lands of 0.75 acres were in good order, repair and condition and covenanted to keep the property in that condition during the pendency of the agreement.

11 6. A caretaker's agreement was also entered into between the plaintiffs and the first and third named defendants in respect of the lands the subject matter of the contract at 4. (c) infra.

12 7. It is common case between the parties that the second and third contracts at 4. (b) and (c) above were interconnected for the purposes of giving effect to a transaction for the sale of all of the property concerned for €2.5m.

13 8. Quite separately, the first and second defendants had hoped to complete the building of a house for themselves during the pendancy of the caretaker's agreement. This project was not realised and at the end of the term the first and second defendants failed to vacate the dwelling house and adjoining lands. Disputes and differences arose between the parties which led, amongst other things, to the non-payment of €320,000 being the balance due by the plaintiffs to the first and third defendants on foot of the contract at 4. (d) infra, the sum of €30,000 having already been paid by the second named defendant.

14 9. In an attempt to secure payment of the balance, the first named defendant retained the services of a debt collection agency known as Viper Debt Recovery and Repossession Services Ltd., a firm controlled by one Martin D...