Victoria Hall Management Ltd v Patrick Cox Rockford Advisors Ltd

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr. Justice Michael Quinn
• Judgment Date: 26 November 2024
• Neutral Citation: [2024] IEHC 674
• Docket Number: Record No. 2016/5037P

Between:

Victoria Hall Management Limited

Palm Tree Limited

Grey Willow Limited

Albert Project Management Limited

O'Flynn Capital Partners

O'Flynn Construction (Cork)

Plaintiffs

and

Patrick Cox Rockford Advisors Limited

Liam Foley

Foley Project Management Limited

Eoghan Kearney

Carrowmore Property Limited

Carrowmore Property Gardiner Limited

Carrowmore Property Gloucester Limited

Defendants

[2024] IEHC 674

Record No. 2016/5037P

THE HIGH COURT

COMMERCIAL

Breach of contract – Damages – Fiduciary – Plaintiffs seeking damages for breach of contract – Whether the first defendant acted in breach of his fiduciary duties

Facts: The plaintiffs sought damages for breach of contract, breach of duty, breach of confidentiality, breach of trust, breach of fiduciary duty, conspiracy, inducement of breach of contract, intentional interference with the plaintiffs’ contractual and commercial relations and/or interference with the plaintiffs’ economic and commercial interests. The defendants pleaded the following: they denied that they owed to the plaintiffs any of the contractual or other duties relied on by the plaintiffs; that before pursuing the Gardiner Street project the first defendant, Mr Cox, had obtained the consent of his then employer to undertake commercial property development in Dublin on his own account; that with certain exceptions the documents taken by Mr Cox and circulated among them were not confidential or proprietorial and were not used or required by them to undertake the Gardiner Street development; that it had not been proved that any of the plaintiffs would have had the capacity to develop the Gardiner Street scheme or would have developed it; that in the manner of their dealings with the National Asset Management Agency (NAMA) the plaintiffs acted in breach of the NAMA Act 2009 and otherwise acted unlawfully and were therefore not entitled to any relief; and that in the manner in which the plaintiffs presented their case they sought to mislead the court about the circumstances in which the plaintiffs were established, the relationship between the plaintiffs and the O’Flynn Group and other important facts and had in their presentation relied on fabricated and false evidence.

Held by the High Court (Quinn J) that: (1) Mr Cox, was a fiduciary of the plaintiffs; (2) Mr Cox acted in breach of his fiduciary duties when, without the consent or approval of the plaintiffs, he concealed from the plaintiffs the opportunity to develop the Gardiner Street scheme and diverted its profits to himself and his co-defendants; (3) in taking documents and information of the plaintiffs without their consent, retaining them for a year after his resignation from the O’Flynn Group, returning them when called on to do so after the plaintiffs learned of the taking, and sharing of documents and information with his co-defendants, Mr Cox acted in breach of his fiduciary duties; (4) no cause of action had been made out against the third to eighth defendants; (5) the sale of sites at Birmingham and Coventry by Victoria Hall Ltd was not closely or necessarily connected to the events which grounded the plaintiffs claims against the defendants; (6) the plaintiffs did not act illegally or fraudulently in the transaction for the sale of sites at Birmingham and Coventry, or otherwise; (7) the plaintiffs did not mislead the court or give false or fabricated evidence.

Quinn J declared that the first and second defendants had at all times held the profits of the Gardiner Street scheme on trust for the plaintiffs and ordered that those defendants account to and pay the said profits to the plaintiffs together with interest. Insofar as the first or second defendants were not entitled to or had not received profits of the Gardiner Street scheme, Quinn J held that the remedy would be an order against them for damages for breach of fiduciary duty equivalent to the full profits of the scheme. Quinn J was not persuaded that the conduct of the defendants warranted an award of aggravated damages.

Relief granted in part.

JUDGMENT of Mr. Justice Michael Quinn delivered on the 26 ^th day of November 2024

Table of Contents

PART ONE: INTRODUCTION	9
This Judgment	12
PART TWO: THE PLEADED CASE	13
Statement of claim	13
Amended defence delivered 21 March 2019	18
The Reply	22
PART THREE: ISSUES TO BE DETERMINED	23
PART FOUR: THE O'FLYNN GROUP	24
Colebridge International Limited	25
NAMA	26
The investor process	28
Restructuring Agreement	28
Sale of loans	29
Actions of Carbon	29
The Carbon Settlement	30
The parallel structure	31
The Sharing Agreement	32
PART FIVE: PATRICK COX	36
PART SIX: GARDINER STREET	37
John Fleming	37
Peter Mullins	37
Dublin City Council and Others	38
The scheme with GSA	40
PART SEVEN: THE PLAINTIFFS	41
VHML	43
John Nesbitt evidence about VHML	48
Ownership and control of VHML	52
The conference call of 22 April 2014	53
Early activities of VHML	56
Evidence of Mr. Alan Stewart of NAMA re VHML	57
Summary of VHML	59
Palm Tree Limited	61
Grey Willow Limited	61
Albert Project Management Limited	62
O'Flynn Capital Partners	62
O'Flynn Construction (Cork)	63
PART EIGHT: THE RECRUITMENT AND APPOINTMENT OF MR. COX	63
The Contract of Employment	69
Who can invoke the Cox Contract of Employment?	73
The first four plaintiffs	74
The fifth named plaintiff	76
The sixth named plaintiff	77
The Carbon Assignment — 15 May 2017.	78
Execution and delivery of the Assignment	80
Evidence of Mr. Robert Dix	81
Evidence of Patricia O'Brien	83
Supreme Court of Judicature Act (Ireland) 1877	85
Origins of the assignment	87
Clause 2.3 as consent to assignment	90
Assignment of a bare right to litigate	91
Conclusion regarding enforceability of the Assignment	93
PART NINE: WAS MR. COX A FIDUCIARY OF THE PLAINTIFFS?	93
Evidence of Michael O'Flynn regarding the role of Mr. Cox.	95
Evidence of John Nesbitt	96
Evidence of Patrick Cox	97
Other witnesses	98
Further evidence of Mr. Cox's role	99
Curriculum Vitae, business cards and marketing material	109
“A note of thanks”	110
The Carrowmore website	110
Role of Mr. Cox in O'Flynn Capital Partners (OFCP)	112
The O'Flynn Capital Partners Strategy Day — 13 January 2015	114
Resignation of Patrick Cox	115
Mr. Cox's “leaving arrangements”	119
Emails to Frank Dowling at NAMA	121
Analysis of the status of Mr. Cox	122
Summary as regards fiduciary duty	130
Findings as regards fiduciary duty	131
PART TEN: OFCP STRATEGY DAY	132
Communications with Trinity College at time of strategy day	137
PART ELEVEN: DID THE PLAINTIFFS WAIVE DUTIES OWED TO THEM?	140
December 2013	141
May 2014	142
11 June 2014	142
Letter of 14 July 2014	145
The “house” proposition	153
Informed consent	155
The expenditure limit	156
PART TWELVE: CHRONOLOGY OF GARDINER STREET	158
The Bridewell Street Appraisal and the Dublin Development Appraisal	159
August 2014	162
DTZ report on Dublin student accommodation market	167
Events after Mr. Cox's resignation	168
30 June 2015	171
6 July 2015	172
31 July 2015	172
The inbox of Mr. Nesbitt	173
7 October 2015	174
21 October 2015	174
Capital Providers and Advisors Master List (22 October 2015)	175
16 December 2015 email of Liam Foley to Patrick Cox	176
PART THIRTEEN: THE TAKING OF DOCUMENTS AND INFORMATION	177
Evidence of Orla Kelleher and Ronan Magee	182
Business plan and asset summary taken 25 March, 2015	184
The hard drive taken on 20 May 2015	185
Other documents taken or obtained by Mr. Cox	189
The Bridewell Street Appraisal	189
The Birmingham Bank Pack and the Chester Budget	192
The inbox of Mr. Nesbitt	193
Residential models	193
Capital Providers and Advisors Master List	194
The Blackrock Heads of Terms	194
The Coral Heads of Terms	196
Evidence of Mr. Foley	196
Evidence of Mr. Kearney	197
Other Witnesses	197
Evidence of Aaron Bailey	199
Pre action correspondence regarding confidential information	200
Conclusion as regards confidential information	202
PART FOURTEEN: CONCLUSION ON THE PLAINTIFFS' CASE AGAINST THE FIRST DEFENDANT	205
PART FIFTEEN: LIAM FOLEY	207
PART SIXTEEN: EOGHAN KEARNEY	216
PART SEVENTEEN: CONSPIRACY	221
PART EIGHTEEN: INDUCEMENT AND PROCUREMENT OF BREACH OF CONTRACT	225
PART NINETEEN: THE LONG BREAK IN THE TRIAL	227
PART TWENTY: THE NAMA DEFENCE	229
Pleadings on the NAMA defence	231
PART TWENTY-ONE: THE BIRMINGHAM AND COVENTRY SITES	237
DTZ Report and Valuation 31 March 2011	239
Planning applications	241
Engagement with NAMA	241
“Introduction	242
Properties	242
Proposal	242
The Gylemuir process	244
The exchange of sites and sale by Gallagher	250
The Coral transaction	251
The VHML appraisals	252
The Coral Terms	253
Simon Fox	261
Tony Barry	261
Michael O'Flynn evidence	262
Development and planning activity before and after 20 October, 2011	263
The cost of planning permissions	267
Alan Stewart, Chief Legal Officer of NAMA	270
Identity of the applicant for planning consent on Birmingham swap site: the “Mistake”	274
Correspondence with NAMA	276
Conclusion on Birmingham and Coventry	279
Mr. Gallagher's uplift	284
Did Mr. Nesbitt have a duty to try to persuade NAMA to change its mind?	284
Fiduciary Duties of Mr. Nesbitt	286
Do the...