Tritton Development Fund Ltd v Markin AG

• Jurisdiction: Ireland
• Judge: Ms. Justice Dunne
• Judgment Date: 12 February 2007
• Neutral Citation: [2007] IEHC 21
• Docket Number: [No. 1136 S./2004]
• Court: High Court
• Date: 12 February 2007

Tritton Development Fund Ltd v Markin AG

BETWEEN

TRITTON DEVELOPMENT FUND LIMITED

PLAINTIFF

AND

MARKIN A G

DEFENDANT

[2007] IEHC 21

[No. 1136 S./2004]

THE HIGH COURT

JUDGMENT of

Ms. Justice Dunne

delivered on the 12th day of February 2007

1 Two separate motions in the above entitled proceedings came on for hearing at the same time. The first motion was issued on behalf of the plaintiff herein and it sought extensive discovery in respect of the matters at issue in these proceedings. The second motion was issued on behalf of the defendant and sought to have a preliminary issue tried namely:

2 1. Whether there has been a valid and effective assignment to the plaintiff of the benefit of a co-operation agreement entered into between the defendant and the company named Sekura Holdings Limited on or about 2^nd March 1999.

3 It is unnecessary to set out the background to the proceedings in detail, save to say that the plaintiff's claim is for a sum of $10 million of foot of "co-operation agreement" entered into between one Sekura Holdings Limited and the defendant herein. The plaintiff claims to be entitled to the said sum by virtue of a deed of assignment entered into between Sekura Holdings Limited and the plaintiff on 26^th July 2001. Given the nature of the two motions before me, it was clearly more appropriate to hear the defendant's motion first. Assuming that a preliminary issue might be tried, there would be no point in making an order for discovery in respect of the main action, a point urged on me by counsel for the defendant and supported by the decision in the case of W. v. Ireland [1997] 2 I.R. 132 in which Geoghegan J. had stated at p. 137:

"The case is a most unusual one and there must be an arguable case that the defendants are entitled to succeed on the grounds set out in para. 1 of their defence. I am informed by counsel that it is intended to apply for a separate and preliminary issue to be tried as to whether the statement of claim discloses a cause of action. The plaintiff's claim to production of the controversial documents is of course based on the assumption that she has a good cause of action. That being so, it would be my view that even if the plaintiff is entitled to production of the controversial documents, assuming there is a proper cause of action, the court ought not, as a matter of discretion, to order such production unless and until the preliminary issue has been heard and determined in favour of the plaintiff.…"

4 The passage from the judgment quoted above appears to me to set out the correct approach to be taken in regard to the two motions before this court.

5 It should be noted that the notice of motion before me sought to have a preliminary issue tried pursuant to the provisions of O. 25 of the Rules of the Superior Courts and O. 34, r. 2 of the Rules of the Superior Courts and pursuant to the inherent jurisdiction of the court directing the trial of a preliminary issue. It is clear from the papers before me that the issue sought to be tried is one which includes mixed issues of law and of fact and thus any application brought under the provisions of O. 25 or indeed O. 34, r. 2, both of which deal with the trial of issues of law, is inappropriate in the present case. It was urged on me that I should permit the defendant to amend the notice of motion to include relief under O. 36 which does in certain circumstances permit the trial of a preliminary issue of fact. It would of course have been possible to simply refuse relief on the basis that the jurisdiction invoked was not appropriate for the relief being sought but I took the view that I should permit the matter to proceed having regard to all the circumstances of the case.

6 The affidavit grounding this application was sworn by Declan Black, solicitor on behalf the defendant. He made a number of points in respect of the validity of the assignment between Sekura Holdings Limited and the plaintiff herein namely:

7 1. The validity of the deed of assignment has always been contested by the defendant.

8 2. No deponent from Sekura Holdings Limited has attested to its validity in the course of these proceedings.

9 3. No participation share certificates have been exhibited in the course of any affidavit in these proceedings.

10 Mr. Black went on in the affidavit to deal with the point in relation to discovery being sought prior to the plaintiff establishing its interest in the proceedings by establishing the validity of the deed of assignment. Finally he went on to say that if the defendant succeeded in the preliminary issue now sought to be tried that that would be sufficient for the proceedings to be determined in the defendant's favour. Thus there would be a saving on the cost of discovery and obviate the need for a full hearing.

11 In her replying affidavit, Noreen Howard, solicitor on behalf of the plaintiff stated that the purpose of an application for the trial of a preliminary issue is to save time and costs. She stated that dealing with the proposed issue herein as a preliminary issue would not result in such a saving. She pointed out the technical difficulties with the motion that I have already referred to above. Finally she made the point that the motion seeking a preliminary issue was more concerned to avoid the necessity to make discovery than to ensure any saving of time and costs.

12 The court had the benefit of written submissions in addition to oral submissions made herein. I do not propose to refer to the written submissions herein at any length.

13 The main submission made by Mr. Gardiner S.C. on behalf of the defendant was that the proposed issue is one which could determine the outcome of the proceedings herein. He pointed out that the defendant has put in issue the validity of the assignment. It is not sufficient simply to rely on the existence of the deed of assignment. The plaintiff must go further and prove it is valid. He accepted that what was involved was an issue of fact which must be proved in order for the plaintiff to succeed in its claim. He argued that it was manifest that there would be a saving on time and costs if the issue was dealt with as a preliminary issue on the basis that if the defendant won the issue that would conclude the case. He referred in support of his submissions to the relevant Rules of the Superior Courts and to a number of authorities to which I shall refer later in this judgment.

14 Mr. Donal O'Donnell S.C. on behalf of the plaintiff argued that in order to have a preliminary issue tried it was necessary to establish that there would be a saving in time and costs in pursuing such a course. He was of the view that the affidavit of Mr. Black did not go far enough in showing that this would be the case.

15 He also expressed the view that the validity of the assignment was one of the main issues in the case and that accordingly it should be dealt with at the trial of the action. If the plaintiff succeeded on the issue, the plaintiff would then have to go through the whole process again at the trial, thus wasting additional time and costs. He argued that there was little else at issue between the parties and pointed out that nonetheless Mr. Black's affidavit had not clarified what evidence and witnesses would be required for that issue as opposed to those required for a full hearing. In those circumstances he...