CA164
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You are here: BAILII >> Databases >> Irish Court of Appeal >> The Leopardstown Club Ltd -v- Templeville Developments Ltd & anor [2015] IECA 164 (28 July 2015) URL: https://www.bailii.org/ie/cases/IECA/2015/CA164.html Cite as: [2015] IECA 164 |
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Judgment
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THE COURT OF APPEAL Appeal No. 2014/1159
[Article 64 Transfer] Finlay Geoghegan J. Peart J. Hogan J. THE LEOPARDSTOWN CLUB LIMITED PLAINTIFF/RESPONDENT AND
TEMPLEVILLE DEVELOPMENTS LIMITED AND PHILIP SMYTH DEFENDANTS/APPELLANTS Judgment of Ms. Justice Finlay Geoghegan delivered on the 28th day of July 2015. 1. This is an appeal against a limited part of a judgment delivered by the High Court (Charleton J.) on the 2nd September, 2013, in which inter alia, he dismissed the defendants’ counterclaim that they were entitled to rescind the Mediated Settlement Agreement (MSA) entered into on the 26th October, 2011, upon the grounds of 2. I have had the opportunity of reading in draft the judgment of Hogan J. which he will deliver. He has set out in great detail the background facts, the relevant extracts from the High Court judgment and evidence relevant to the pursued ground of appeal. I do not propose repeating all in this judgment. I am in agreement with Hogan J. as to the order to be made on the appeal and the purpose of this judgment is to set out briefly the reasons for which I have come to that decision. 3. The plaintiff, (“Leopardstown”) is the owner of Leopardstown race course. Mr. Smyth, the second named defendant is the principal shareholder and director of the first named defendant (“Templeville”). Leopardstown and Mr. Smyth have had a business relationship in relation to the running by Mr. Smyth of a sports club at the racecourse since the 1970s. Templeville now runs a fitness, health and leisure centre known as Westwood Club at the premises. 4. By reason of the events more extensively described in the judgment of Hogan J. the parties entered into a mediation process, with Paul Gallagher S.C. acting as mediator, on the 27th September, 2011. At the time there were approximately nine items of actual or threatened litigation outstanding between the parties. The mediation process led to the MSA being entered into between the parties on the 26th October, 2011. It comprises a written agreement between the parties hereto, maps referred to and a solicitor’s note. 5. The MSA was received and made a rule of court in the High Court in proceedings between the parties on the 3rd November, 2011. 6. Regretfully disputes recommenced between the parties early in 2012. There were continuous disputes up until June 2012, and much correspondence between the solicitors. On the 15th June, 2012, Templeville’s solicitors wrote informing Leopardstown that Templeville had elected to terminate the MSA with immediate effect because of an alleged fundamental breach of the MSA by Leopardstown. Following further correspondence Leopardstown issued proceedings on the 10th July, 2012, seeking a declaration that the MSA remained in full force, judgment for liquidated sums allegedly due and other consequential reliefs including damages. A statement of claim was delivered on the 11th July, 2012, and thereafter the proceedings were entered into the commercial list, pleadings delivered including a defence and counterclaim and pre-trial procedures and preparations were followed in accordance with commercial list practices and the action was listed for hearing on the 11th June, 2013. 7. The single determination of the trial judge against which an appeal was pursued at the appeal hearing was on a counterclaim which had not been made in the original defence and counterclaim, albeit that the representation contended for had been referred to in a letter on the 22nd July, 2012. This claim was only included in a proposed amended defence and counterclaim delivered on the 24th May, 2013, and liberty to amend was only granted pursuant to an order of the trial judge on the second day of the hearing, i.e. the 12th June, 2013. The defendants pleaded in the amended defence and counterclaim that Leopardstown by furnishing a map, Arup drawing number [5002] in the course of negotiations leading to the execution of the MSA represented that the “New Site” was not materially affected by an underground ESB cable; that the representation was false; that it was made with an intention that the defendants should rely on it and that the defendants did in fact rely upon it when executing the MSA. The defendants pleaded that they were entitled to rescission or in the alternative damages. In reliance on the same facts, they also pleaded that the MSA was void or voidable by reason of common mistake and also there were pleadings in relation to breach of warranties by the plaintiff. 8. It is necessary to emphasise that this additional claim added to a multiplicity of issues already in the proceedings with which the trial judge had to grapple in the course of the hearing. 9. The trial was lengthy, approximately fourteen days and the order records approximately 25 witnesses who gave oral evidence. The judgment delivered by the trial judge was required to deal with multiple issues as he did. It is fair to say that overall he found Mr. Smyth not to be a credible witness and found in favour of the plaintiff and against the defendants on all issues. 10. The initial judgment left over a claim by Templeville for relief against forfeiture. There was a further hearing on that issue in October 2013, and thereafter the trial judge indicated that relief against forfeiture would be granted subject to certain conditions and a final order was made on the 14th November, 2013. 11. In February 2014, the defendants lodged a notice of appeal to the Supreme Court with multiple grounds of appeal. It was transferred to this Court pursuant to Article 64 of the Constitution on the 29th October, 2014. Following directions given in this Court, the submissions furnished on behalf the appellants effectively confined the appeal to the determination of the trial judge dismissing the counterclaim to rescind the MSA by reason of the 12. The judgment of Hogan J. sets out in full the portion of the judgment of the trial judge in which he considered the relevant part of the counterclaim, made his findings and reached his conclusions. As appears, he commenced this part of his judgment by stating at para. 64:-
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![]() ![]() 15. It is against these findings and conclusions that the appeal is pursued. The appellants contend that the trial judge was in error in failing to consider their counterclaim for ![]() ![]() ![]() ![]() ![]() ![]() 16. Leopardstown disputes that the trial judge was in error in his approach to the determination of the relevant issues. It relies upon the findings of fact made by him, in particular the lack of credibility of Mr. Smyth and the inferences drawn and submits that this Court in accordance with the principles established in Hay v. O’Grady [1992] 1 I.R. 210 and subsequent judgments should not interfere with the findings of fact made by the trial judge as to the knowledge of Templeville and Mr. Smyth of the true position in relation to the transverse ESB cable at the time they entered into the MSA and should not interfere with his conclusion that the counterclaim be dismissed. Rescission on grounds of
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![]() ![]() ![]() ![]() 20. The defendants in GAHAN had also argued that the purchaser should have pursued his enquiries regarding the proposed route of the motorway “in quarters where he would have been reliably informed as to the true position”. But Henchy J. would not accept that the doctrine of constructive knowledge could have any application in this situation:
![]() ![]() I was unable to accept this argument. I consider it to be well-settled law that the only knowledge that will debar a purchaser from repudiating a contract he has been induced into by the vendor’s ![]() ![]()
It must be carefully noticed, however, that relief will not be withheld on this ground except upon clear proof that the plaintiff possessed actual and complete knowledge of the true facts - actual not constructive, complete not fragmentary. The onus is on the defendant to prove that the plaintiff had unequivocal notice of the truth.” ![]() ![]() ![]() ![]() Conclusions 24. I have noted that in the final sentence of paragraph 75 of his judgment, the trial judge stated that he could not accept that “any 25. The failure of the trial judge to consider and decide the relevant questions of fact in accordance with law in relation to whether or not Leopardstown made a 26. I accept the submission made on behalf of Templeville and Mr. Smyth that the relevant portion of the trial judge’s judgment does not disclose that he ever asked himself the question as to whether or not Leopardstown had established that at the time of the negotiations leading to the MSA and on entering into the MSA, Templeville and Mr. Smyth had “actual and complete knowledge of the true situation” in relation to two ESB cables potentially affecting the tennis court site over which it was agreed Dome 3 might be built. A consideration of this question was of course difficult in the absence of prior findings as to the allegedly untrue representation made, its materiality and the fact that it induced the other party to enter into the agreement. 27. It must be recalled what is the nature of the alleged representation which it was contended by the appellants was untrue. It is a combination of the positive representation made in the Arup maps series 1000 to 5000 showing the existence of one ESB underground cable by a red broken line with an attached legend “ESB underground cable approximate position” and the failure to show on the maps the second ESB underground cable approximately parallel to the one shown but in parts running inside the proposed tennis court site to be covered by Dome 3. The contention of Templeville is that Leopardstown having chosen to show or represent one ESB underground cable on the maps, but failing to show the second ESB cable has 28. For the reasons set out below I am not making any finding as to whether or not the production of the maps showing only one ESB cable running outside the tennis court site did or did not constitute a representation of a material fact which was false. Similarly I am not making any findings that it was intended that Templeville rely on same and was induced thereby to enter into the MSA. If however such findings were made in favour of Templeville, it appears to follow that for Leopardstown to succeed on a defence that Templeville and Mr. Smyth had actual and complete knowledge of the true situation in accordance with the principles set out above it had to establish that Templeville or Mr. Smyth had actual and complete knowledge of the existence of two (and not only one) underground ESB cables and knew that one of the underground cables was underneath or traversed in part the tennis court site. If the 29. It was not in dispute on appeal that Templeville and Mr. Smyth did have actual knowledge in 2007 and 2008 (in the context of the 2007 planning application and the 2008 arbitration) of the existence of one ESB cable which traversed the tennis court site. The finding of the trial judge that they had knowledge in 2007/2008 of one transverse ESB cable is supported by the evidence. However, insofar as the trial judge appears to have concluded that they had knowledge even in 2007/2008 of two cables then, for the reasons set out by Hogan J., I agree such finding is not supported by the evidence. Further, the evidence related to the knowledge in 2007/2008. Even at that point in time it does not appear to constitute complete knowledge of the true situation. 30. In accordance with the authorities the relevant question is whether Templeville and Mr. Smyth had actual and complete knowledge of the true situation in 2011 at the time of entering into the MSA. Gahan makes clear constructive knowledge is not sufficient it must be actual knowledge. The trial judge did not make findings supported by evidence from which such inferences could be drawn. Part of the difficulty undoubtedly was the failure by the trial judge to identify what was (if he so thought) the 31. I would also like to add that I have very carefully considered the submission of Leopardstown that having regard to the credibility findings of the trial judge in relation to Mr. Smyth that the appeal should be dismissed. There was inter alia, ample evidence to support the conclusion of the trial judge to reject the evidence of Mr. Smyth that he first discovered the existence or location of the transverse cable on the 14th June, 2012. Further, the subsequent complaints and delay in alleging 32. It follows in my judgment that the appeal against the dismissal by the trial judge of the counterclaim on grounds of 33. The final question is what order this court should make as a consequence of the conclusions reached above. Leopardstown submitted that this Court should find that there was no 34. Templeville and Mr. Smyth submit in the alternative that the court should make the findings to the opposite effect and allow the counterclaim to rescind. 35. I am in agreement with Hogan J. that this Court regrettably, given the extent of prior litigation between the parties, should not now determine whether or not Leopardstown was guilty of actionable 36. Further there is the issue as to whether or not having regard to the facts subsequent to the MSA, Templeville should or should not be entitled to rescind or whether it is entitled to damages. As I have indicated, there was ample evidence to support the conclusion of the trial judge to reject the evidence of Mr. Smyth that he first discovered the existence or location of the transverse cable on the 14th June, 2012. This and the subsequent behaviour whilst not capable of supporting the dismissal of the appeal may be relevant to the remedy in the event Templeville were to succeed on its claim for Relief 38. I would remit to the High Court for retrial before a different judge the single issue on the counterclaim and the defence thereto in relation to the above alleged |