Zona Gastronomica SLU and Others v Carbon Finance Ltd and Others

 
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[2015] IECA 93

THE COURT OF APPEAL

Kelly J.

Peart J.

Mahon J.

Appeal Nos. 444/2014
446/2014
447/2014
O'Flynn & Ors v Carbon Finance Ltd & Ors
Michael O'Flynn and John O'Flynn, Brabston Limited, Broomco (4102) Limited, Cesium Limited, Coleridge International Limited, Crestor Limited, Deanshall, Dellacourt Limited, Eastgate Developments (Cork), Fairbury Unlimited, FTG Projekt Kerpen GMBH & Co. KG, Galileo Residenz Bremen Gmbh & Co. KG acting by its general partner Galileo Residenz GMBH, Graiguemore Limited, Jelton Limited, Lamada Limited, Little Island Property Limited, Magnum Freeholds Limited, Magnum Property Nominees 15 Limited, Medallion Investment Limited, Millington Properties Limited, O'Flynn Construction (BTC) O'Flynn Construction (Lapps Quay), O'Flynn Construction (Rochestown), O'Flynn Construction (Technology Park), O'Flynn Construction Co., O'Flynn Construction Holdings, Precis (2111) Limited, Precis (2110) Limited, Precis (2102) Limited, Precis (2103) Limited, Precis (1672) Limited, Precis (2175) Limited, Precis (2176) Limited, Precis (2112) Limited, Residencias Universitarias, SA, Rose Castle, Sentinel Number Two Limited, Shelbourne Senior Living Limited, Tiger Atrium Limited, Tiger Bremen One GMBH, Tiger Bremen Two GMBH, Tiger Cowley Limited, Tiger Developments, Tiger Developments Gmbh & Co KG. Tiger Developments (Jersey) Limited, Tiger Guildford Limited, Tiger Hannover Gmbh & Co. KG, Tiger Harbour Island Limited, Tiger Haymarket Limited Partnership, Tiger 4 Limited, Tiger 55 Limited, Tiger 130 Limited, Tiger (Dominion) Limited, Tiger Haymarket No. 1 Limited (As General Partner For Tiger Haymarket Limited Partnership), Tiger (IOM) Limited, Tiger (Retail Dominion) Limited, Tiger No. 1 General Partner Limited for itself and as General Partner of Tiger No. 2 Limited Partnership, Tiger No. 1 Limited Partnership A Limited Partnership Established Under The Limited Partnership Act 1907, Tiger No. 2 General Partner Limited For Itself AND as General Partner of Tiger No. 2 Limited Partnership, Tiger No. 2 Limited Partnership a limited Partnership Established Under The Limited Partnership Act 1907, Tiger No. 5 Limited, Tiger Properties Limited, Tiger St. Michael's Limited, Tiger Teesdale Limited, Topwell No. 1 Limited, Topwell No. 2 Limited, Topwell No. 5 Limited, Topwell No. 6 Limited, Magnum Property Nominees 3 Limited, Magnum Property Nominees 4 Limited, Magnum Property Nominees 14 Limited, Magnum Property Nominees 16 Limited, Magnum Property Nominees 43 Limited, Godalming Trustee Company Limited, Tiger Enterprise No. 2 Limited, Stockley Park Trustee Company Limited, Stockley Park Trustee Company No. 2 Limited, The Livingstone Trustee Company Limited, Livingstone Trustee Company No. 2 Limited, Valdes Property Limited, Victoria Hall Construction Limited, Victoria Hall Limited, Zona Gastronomica SLU
Plaintiffs

and

Carbon Finance Limited Paul McCann, Patrick Dillon, Mark Byers, Marcus Wide and the Blackstone Group LP and the Blackstone Group International Partners LLP
Defendants

2014/444, 2014/446 & 2014/447 - Kelly Peart Mahon - Court of Appeal - 19/2/2015 - 2015 IECA 93

Appeal – Rules of the Superior Courts – Jurisdiction Clauses – Damages – Abuse of Process – Practice and Procedures – Liberty – Summons – Justice – Conspiracy – Breach of Contract

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Judgment of the Court delivered on the 19th day of February 2015,

Introduction
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1. On the 24 th day of November 2014, the court dismissed three separate appeals from orders made by McGovern J. in the High Court Commercial Division.

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2. One appeal was taken by the plaintiff and the others by the first and seventh and sixth defendants respectively.

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3. The court indicated that it would give its reasons for dismissing the appeals at a later date which it now does in this judgment.

Part A
The Plaintiffs' Appeal
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4. This is the plaintiffs appeal against an order made by McGovern J. in the Commercial Court in which he acceded to an application made by the first, sixth and seventh defendants and struck out that part of the plaintiff's claim which related to five group facility agreements each dated the 28 th February, 2013, which were subject to an exclusive jurisdiction clause in favour of the Courts of England. The application was brought pursuant to O. 19, r. 27 of the Rules of the Superior Courts and the inherent jurisdiction of the court.

The Jurisdiction Clauses
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5. Whilst eight corporate facility agreements are impleaded, the five which are the subject of the order under appeal, all contain the following clause:-

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2 "40.1 Jurisdiction

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(a) The Courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this agreement (including a dispute regarding the existence, validity or termination of this agreement).

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(b) The Parties agree that the Courts of England are the most appropriate and convenient courts to settle disputes and accordingly no party will argue to the contrary.

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(c) This clause 40.1 is for the benefit of the finance parties and the secured parties only. As a result, no finance party or secured party shall be prevented from taking proceedings relating to a dispute in any other courts with jurisdiction. To the extent allowed by law, the finance parties and the secured parties may take concurrent proceedings in any number of jurisdictions."

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6. In Kutchera v. Buckingham International Holdings Limited [1988] I.R. 61 , McCarthy J. identified the proper approach which courts ought to have to a choice of jurisdiction clause. He said:

"The correct legal principle is that the parties' choice of jurisdiction should be upheld and the necessary procedural orders granted unless there are strong reasons to the contrary."

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Later in the judgment he said:

"It must be the policy of this and other courts to hold parties to the bargains into which they enter."

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7. More recently, Charleton J. in Kelly v. Lennon [2009] 3 I.R. 794, held that where parties to a contract have agreed a choice of jurisdiction the "court is obliged to give effect to the choice of jurisdiction".

The Plaintiffs Argument
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8. The plaintiffs accept that the five agreements in question are governed by English law and confer jurisdiction on the Courts of England. But they contend that the first defendant waived its entitlement to rely on these exclusive jurisdiction clauses by entering a non conditional appearance to the plenary summons on the 1 st August, 2014. Any doubt about that is said to have been put to flight by Carbon's conduct during and its participation in both examinership and injunction proceedings in early August 2014.

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9. In order to understand how this argument comes to be made it is necessary to sketch out briefly what these proceedings are about and the somewhat complicated procedural history which followed their commencement.

The Proceedings
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10. This action began with the issue of a plenary summons on the 31 st July, 2014. At that time there were just two plaintiffs, Michael O'Flynn and John O'Flynn. There were five defendants. They were Carbon Finance Limited, an Irish registered company, Paul McCann and Patrick Dillon, both members of the firm of Grant Thornton, with a registered place of business in Dublin and Mark Byers and Marcus Wide, both of the firm of Grant Thornton with registered offices in London.

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11. On the 1 st August, 2014, an appearance was entered to the proceedings by the first defendant. The appearance was unconditional.

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12. The proceedings sought a series of declaratory reliefs relating to the legality of what is said to be a premeditated and complicated enforcement plan instigated by the first defendant against the plaintiffs. The plaintiffs contend that the plan was implemented on foot of invalid demand letters of the 29 th July, 2014, served on the first and second plaintiffs. Within three hours of so doing, the first defendant allegedly put into train a series of enforcement actions against the personal plaintiffs and members of the O'Flynn group of companies. It is not in dispute but that the receivers and directors appointed by the first defendant on foot of this alleged plan were removed by order of Irvine J. on the 13 th August, 2014.

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13. The plaintiffs also claimed damages for abuse of process and conspiracy arising from the presentation by the first defendant of a petition seeking the appointment of an examiner in respect of O'Flynn Construction Company Limited and three related companies. That petition was presented to McGovern J. at 4.00 pm on the 29 July, 2014, ex parte. The companies, the subject of that petition, applied successfully to have it set aside. That order was also made by Irvine J. on the 13 th August, 2014. She held that the petitioner had...

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