High Court of Ireland Decisions

1. The first Plaintiff in these proceedings is the son of the Defendants, and the proceedings have arisen as a result of a most unfortunate series of disputes between the first Plaintiff and the Defendants which culminated in no fewer than five sets of proceedings between the parties, four of them in the High Court and one of them in the Circuit Court in Cork. The first Defendant is tenant for life and the first Plaintiff, as the eldest son, is remainderman in relation to a trust set up under the will of Sir George Oliver Colthurst who died on 15th February 1951. Included in the property which was subject to the trust was:-

2. It is not necessary for the purpose of this judgment to identify in detail the various disputes between the parties, and it is sufficient to say they concerned a right of way claimed by the first Plaintiff, rights claimed by the first Plaintiff over two shops connected with Blarney Castle, the ownership of the second Plaintiff, which was a company which operated the said shops and certain claims by the first Plaintiff against the first Defendant for breach of the terms of the said trust. The latter action in fact never got beyond the stage of the delivery of a Statement of Claim, but one of the reliefs sought by the first Plaintiff was:-

3. It was alleged that the failure to furnish such inventory was a breach of trust by the first Defendant.

4. The three High Court cases in which pleadings had been closed came on for hearing on 2nd July, 1999 and lengthy negotiations took place between Counsel for the first Plaintiff and Counsel for the first Defendant. The second Defendant was a party to one of these actions, and was separately represented as such, but her Counsel appears to have played little part in the negotiations, and what part he did play is not relevant to these proceedings.

5. The negotiations started shortly after 10 o’clock in the morning and continued until about 7 o’clock in the evening. The parties agreed that although the landlord and tenant proceedings in the Circuit Court in Cork and the breach of trust proceedings were not before the Court on that day, the negotiations would in fact encompass all disputes between the parties. Agreement was ultimately reached, and a detailed settlement was signed by all the parties or their representatives. Among the matters agreed was an item under the heading “the furniture”, which read as follows:-

6. There was then a Schedule attached to the agreement listing twenty-one paintings, a number of which were portraits of members of the family.

7. In these proceedings, the Plaintiffs seek recision of the settlement and an Order setting aside the consent Order made on foot of it on 6th July, 1999. The basis of the Plaintiffs’ claim is that they were induced to enter into this agreement on foot of a misrepresentation made on behalf of the Defendants in the course of the negotiations. It is not alleged that this misrepresentation was made fraudulently or negligently, and the Plaintiffs accept that the only remedy available is recision. There is a further issue in the case which I will deal with at the end of the judgment as to whether the second Plaintiff ever authorised the issue of proceedings in its name, or indeed authorised a claim for recision to be made.

8. For the Plaintiffs to succeed they must show that there was a representation of a fact, that that representation was untrue and that the Plaintiffs were induced to enter into the settlement by reason of the representation. The representation relied on in this case was not made by one of the parties to another party, but was made by Counsel for the first Defendant to Counsel for the first Plaintiff. The vital evidence in relation to the representation, therefore, is that of Mr John Gordon S.C., who is Counsel for the first Plaintiff. It appears that Counsel for the first Defendant, Mr Jack Fitzgerald S.C., somewhere in the mid-morning said that it would be an essential term in any agreement that the first Plaintiff would confirm that the contents of the mansion house, known as Blarney House, were the property of his father and mother. The first Plaintiff was quite unwilling to give such a confirmation, and when Mr Gordon asked what was the basis for this, Mr Fitzgerald said, in the words of Mr Gordon in his evidence:-

9. I am quite satisfied that that was a representation of an existing fact made by Mr Fitzgerald S.C., clearly on the instructions of his client. I should say it is not suggested for a moment by anybody that there was any wrongdoing on the part of Mr Fitzgerald S.C.

10. The next question which arises is whether that representation was untrue. Mr O’Neill S.C. on behalf of the Plaintiffs accepts that the onus of proving this is on his client, but points out that it is extremely difficult to prove a negative. However, he has produced a number of documents dating back as long ago as the 1920’s from which he submits I should draw the inference that some of the furniture in Blarney House is subject to the trust, including some of the most valuable furniture which is there. Among the documents is an inventory dated 7th June, 1951 prepared in the estate of Sir George Oliver Colthurst, who was the original settlor, and in evidence the first Plaintiff has identified some thirty items, excluding pictures, which he says were in Blarney House up to a few years ago. However, these are thirty items out of an inventory which runs to forty pages. The real problem is that the representation made was that the first Defendant had bought back some items a number of years earlier, and the only contrary evidence which the Plaintiffs can point to in relation to this part of their representation is that no documents have been discovered in connection with such a sale, nor do the proceeds of such a sale appear in such accounts of the trust as exist. The Defendants have chosen not to go into evidence, and Mr O’Neill invites me to draw inferences from that fact also. I appreciate the Plaintiffs’ evidential difficulties, and I am certainly prepared to accept as a matter of probability that some of the items now in Blarney House were subject to the trust at the date of the settlement. However, the representation made was not that there were no items in the house subject to the trust, but that “the bulk of the contents, if not the entire contents” belonged to the Defendants. It was, therefore, quite clear that there might be some furniture which was subject to the trust, but from the items identified by the first Plaintiff, I do not think I can draw an inference that it was untrue to say that the bulk of the contents were the property of the Defendants. Assuming that I accept the first Plaintiff’s evidence that all the items in the inventory of 1951 that he referred to as being present in the house are in fact subject to the trust, I still think that what remains in the house must be the bulk of the contents. I think it is also very relevant that during the negotiations the first Plaintiff did not seek to identify what was meant by “the bulk of the contents”. Accordingly, I do not think that the Plaintiff has discharged the onus of showing that the representation was untrue.

11. With regard to the third ingredient of an action of misrepresentation, namely, whether the Plaintiff was induced by his belief in the representation to enter into the settlement agreement, I think this is a matter upon which I should also comment. There is in fact a serious conflict between the evidence of the first Plaintiff and that of Mr Gordon S.C. The first Plaintiff initially asserted in evidence that he believed what Mr Gordon S.C. told him, namely, that the furniture in Blarney House belonged to his parents. However, in cross-examination he accepted that initially he did not believe the representation but that in the course of the discussions he changed from a position of disbelief to a position of belief, although he at all times denied in evidence that he ultimately agreed to a compromise.

12. Mr Gordon’s evidence was quite clear. He was adamant that the first Plaintiff did not accept that there had been any transaction whereby some of the furniture had been bought in by his father, and very significantly in his evidence in chief he said that with very considerable reluctance the first Plaintiff ultimately decided or accepted that a compromise in relation to the contents might form part of the settlement.

13. I have to say that I strongly prefer Mr Gordon’s evidence on this point, and I believe that the first Plaintiff entered into this settlement in the full knowledge and that there was a claim by his parents that they owned the furniture, that he had serious doubts as to whether this was so and that in the end he agreed to a compromise whereby he would concede the furniture in the house, and his parents would effectively concede the paintings. I do not believe that his concession was based on a belief in the representations that had been made to him but rather was made as part of a detailed and quite complicated settlement whereby he obtained considerable benefits in return for his concessions on the furniture. He was told that this was a make or break point in the whole settlement negotiations, and he made a conscious decision to trade off the furniture for the other benefits given to him in the settlement. I should add that it is particularly relevant that part of the trade off was that he received the benefit of the paintings. Logically, if he believed that his father and mother owned the contents of Blarney House, then they would have owned the paintings as well, and he would then have believed that he was getting something to which he was not entitled. Accordingly, I think the Plaintiff must fail on the question of reliance also.

14. Finally, I would deal briefly with the position of the second Plaintiff. This is a company which operates the shops at Blarney Castle. Its shares are owned as to 49% by the first Plaintiff, 1% by his wife and the remaining 50% are held by the second Defendant, that is his mother. They are also the three directors. The second Defendant claims that the company never authorised the issue of these proceedings, nor did the company ever resolve that it wished to set aside the settlement. The first Plaintiff went through somewhat of a charade in an attempt to put a gloss of legality on issuing these proceedings in the name of the company. The Plaintiffs’ Solicitors were authorised to issue the proceedings by a letter dated 1st September, 1999 signed by the first Plaintiff and his wife which reads as follows:-

15. What was in fact done was that a meeting of directors was convened for 10th August, 1999 for the purpose of convening an extraordinary general meeting of the company pursuant to Section 132 of the Companies Act, 1963, the purpose of such extraordinary general meeting being to pass a resolution authorising the Plaintiffs’ Solicitors to issue proceedings to set aside the agreement. No notice of this directors meeting was given to the second Defendant. In due course an extraordinary general meeting was called for 1st September, and again no notice of this meeting was given to the second Defendant. Minutes of that meeting have been produced, in which it is stated:-

16. The only explanation I have been given for the failure to notify the second Defendant is that the first Plaintiff and his wife were aware that she would vote against any such resolution, but were also aware that they would out-vote her. He also claims that he was advised by his accountants not to give her notice, which I find quite astonishing, both that in general his accountant would not have been aware of the necessary formalities in calling an extraordinary general meeting, and in particular that he would advise a director and 50% shareholder would not be notified of either a directors meeting or a general meeting of the company in which it was intended to pass a resolution authorising the company to issue proceedings against her. I am satisfied this was a deliberate attempt to prevent the Defendants from finding out the Plaintiffs’ intention to issue proceedings against them, and it is very significant that during the period between the supposed directors meeting on 10th August and the issue of proceedings, the Defendants were allowed to continue to make arrangements to put in place elements of the settlement.

17. Lest there be any doubt as to the validity of the meeting of 1st September, I would point out that it purported to be an extraordinary general meeting of the company, and that under Section 134 of the Companies Act, 1963 notice of a meeting of the company must be served on every member of the company, and further under Section 193 of the Companies Act, 1990 the auditor of the company is entitled to attend any general meeting of the company and to receive all notices in relation thereto. In view of the statutory provisions, quite clearly the resolution which was purported to be passed is invalid, and the second Plaintiff has no standing in these proceedings. In fact, this in itself, in my view, would have determined the case in favour of the Defendants, but I felt that I should deal with the merits of the Plaintiffs’ claim in any event, in an attempt to forestall any further proceedings which the first Plaintiff might bring.

18. Accordingly, this claim must be dismissed.