Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
High Court of Ireland Decisions
You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Kelly v. Kelly [2003] IEHC 627 (20 January 2003)
URL: http://www.bailii.org/ie/cases/IEHC/2003/627.html
Cite as: [2003] IEHC 627
[New search] [Printable RTF version] [Help]
RECORD NO. 14436P/2002
BETWEEN
PLAINTIFF
DEFENDANT
Judgment of Mr. Justice T.C. Smyth delivered the 20th day of January, 2003.
This is the defendant's motion seeking to have the claim of the plaintiff struck out in its entirety as being vexatious and an abuse of process. On the motion coming on for hearing the defendant invoked the inherent jurisdiction of the Court rather than rely upon the provisions of Order 19 r 28 of the Rules of the Superior Courts. On the second day of the hearing the plaintiff abandoned his claims to an interest in all properties set out in the schedule of properties to the plenary summons with two exceptions.
The chronology of legal proceedings:
1st May, 2002: Proceedings entitled the Supreme Court (Bankruptcy 185/01) In the matter of Matthew Kelly, a bankrupt - and - In the application by Kellys Carpetdrome Limited were compromised on terms on the matter coming on for appeal in the Supreme Court which envisaged or necessitated the procuring by Matthew Kelly of waivers from (inter alia Cathal Kelly) in respect of certain unspecified properties but which included certain properties which were in the registered name of Armada Developments Limited and required same on or before 3 l" May, 2003 the payment of substantial monies.
August/October, 2002: On days or dates unspecified a waiver was sought or requested of Cathal Kelly by Matthew Kelly through or by Sean McGrattan but was not forthcoming and Cathal Kelly became aware that without his authorisation his name had been appended to purported waivers sometime in or about late October early November 2002.
12th November, 2002: Issue of plenary summons in these proceedings.
26th November, 2002: Entry of appearance in these proceedings.
2nd December, 2002: Issue of plenary summons (2002/15398P) in an action by Cathal Kelly -v- Sean McGrattan in which 9 of the 12 reliefs sought are in exactly similar terms to those in the present proceedings.
12th December, 2002: Issue of notice of motion (with a return date of 13/01/03) and affidavit of the defendant to which this judgment is directed.
3rd January, 2003: Delivery of statement of claim in these proceedings which alleges (inter alia):
"3. From in or around the beginning of 1997 until the end of 1998 the plaintiff invested a total sum in the region of £600, 000 with the defendant in order that the lands, premises and shares particularised in the schedule hereto be purchased for and on his behalf by the defendant or by a company or companies controlled by the defendant. "
13"' January, 2003: Filing and delivery of a replying affidavit by Cathal Kelly on this the return date of the motion.
14th January, 2003: The filing of a "Requested Contributing Affidavit" of Sean McGrattan, this was supplemented on this day.
14th January, 2003: Replying affidavit of Matthew Kelly.
This recitation becomes of significance because of matters that emerged in the cross-examination of both Mr. Cathal Kelly and Mr. Sean McGrattan upon their affidavits and the submissions of counsel thereon.
The matter of the appeal to the Supreme Court hereinbefore referred to has been adjourned from time to time to enable the implementation of the compromise referred to: Clause (14) of the compromise provides that:
"As regards any sum to be paid hereunder, or the performing of any act hereunder, it is agreed that time shall be of the essence of the matter. "
THE FACTS
I am satisfied and find as a fact (where not agreed upon by the parties) on the evidence that for some years the plaintiff Cathal Kelly and Sean McGrattan were involved in a general way in business dealings. These might be loosely described as property deals or developments. The plaintiff avers that he was entirely reliant upon Mr. McGrattan as his ,advisor and that he Mr. McGrattan handled all his business affairs over a number of years. Sometime in or about the month of April, 1997 the plaintiff first became acquainted with the defendant through Mr. McGrattan who was, it would appear, an advisor to the defendant. The plaintiff elected not to cross-examine the defendant on his affidavits and in particular a schedule of properties exhibited to the replying or supplemental affidavit of 14th January, 2003, which indicated the year of acquisition of various properties. That indicates (to the extent relevant to my determination) that:-
a. Premises in Talbot Street, Dublin were acquired in 1991.
b. 100% shareholding in Armada Developments Limited was acquired in 1992.
c. Apartments and public house at 28-33 North King Street, Dublin acquired in 1993.
d. 50% site of North King Street and Red Cow Lane, Dublin acquired in 1997.
It may be that items (c) and (d) formed all the one site - the evidence was not conclusive on that issue.
The plaintiff avers that:-
"I can only speculate until such time as my legal advisors have had an opportunity to receive a separate report from a forensic accountant, that there are documents that link your deponent to the properties in dispute. "
Furthermore the plaintiff avers until he obtains Discovery he is unable to establish the whereabouts of the substantial sums of money he invested through Sean McGrattan:
" ... some of which were invested in the properties the subject matter of these proceedings. "
And that:
"I was at all times assured by Mr. McGrattan that the purchase of the properties the subject matter of these proceedings was to be through the purchase of Armada Developments Limited, the owner of the properties. "
What is not in dispute, despite a day's evidence given by the plaintiff is that:-
(A) The plaintiff did not pay any money to the defendant for any property or properties or share or shares - this was so on the plaintiffs own evidence.
(B) The defendant avers, and was not challenged, that he received no money or monies for either property or properties or share or shares from the plaintiff.
(C) Mr. McGrattan's evidence is to the effect that he did not pay any monies to the defendant for and on behalf of the plaintiff or the plaintiff and himself (Mr. McGrattan - whom the plaintiff referred to as his business partner).
A meeting of Armada Developments Limited was held on 7"' August, 1997: both the plaintiff and Mr. McGrattan attended this meeting but the defendant was not present. A number of resolutions were passed at this meeting designed to reorganise and reconstruct the basis of the companies operation. It is clear that a number of the alterations were dependent for their efficacy on certain events taking place. Particular importance was attached by the plaintiff to resolution (c) which reads:
"That a share issuance is effected and that 250, 000 shares be allocated to Mr. Sean McGrattan as to 125, 000 shares and to Mr. Cathal Kelly as to 125, 000 shares respectively with each share having a value I. R. £1.00. "
I am satisfied and find as a fact on the evidence before me that the plaintiff did not pay to the company or to the defendant any money or consideration to give effect to this resolution. It is true that the Memorandum of Association was amended in its objects clause to purchase premises in North King Street, Dublin and to carry on the business of licensed vintners thereon in "The Orbit Bar" and that such Memorandum was signed by both the plaintiff and Mr. McGrattan the subscribers and the number of shares taken by each subscriber is stated and it notes the member of shares taken: it is dated the same date as the meeting and apparently duly delivered at a later date to the Companies Registration Office.
Within ten days of the company meeting Mr. McGrattan confirmed to a third party that the plaintiff Mr. Cathal Kelly was his partner and with reference to the "licensing of the Orbit Bar, 28 North King Street, Dublin" as follows:
"As the owners of the licensed premises and indeed of the entire project at the above referenced address we hereby confirm our acceptance of the liability and in this matter I am authorised to pledge Mr. Kelly's acquiescence. "
About a month later on 15t" September, 1997 a notice of application was lodged in the Dublin Circuit Court by Armada Developments Limited for "a Declaration that certain premises which the Applicant proposes to reconstruct and known as the Orbit Bar would be fit and convenient to receive a Publicans Sevens Day On Licence. "
The Plaintiffs case is that he trusted Mr. McGrattan to invest whatever monies Mr. McGrattan had on his behalf in Armada Developments Limited and that he was entitled to the fruits of such investment, in the company's properties at both Talbot Street and North King Street. Mr. McGrattan's evidence was that he held no monies the property of the plaintiff and that the intended reconstruction of the company did not proceed as envisaged by the resolutions of 7th August, 1997.
I am satisfied from the Plaintiffs own evidence that whatever interest or indebtedness to him that may exist is referable solely to the premises in North King Street and that at no stage did he do any work or have any interest in the premises in Talbot Street. I reject as not being sustained by the oral evidence - what is averred in paragraph (9) of the plaintiffs affidavit that –
"I at all times believed that I was obtaining a beneficial interest in all the properties the subject matter of these proceedings through my shareholding in the said company" (i.e. Armada Developments Limited).
I am satisfied that the plaintiff had an appreciation that the defendant apparently required waivers from him to the extent that he might possibly have had an interest in Armada Developments Limited and that some person as yet unknown "forged" the plaintiffs signature to such waivers. It appears that he may have had some physical or fi iancial involvement of a very imprecise extent in the premises in North King Street, Dublin in late 1997 early 1998 and as a result he had a very serious falling out with Mr. McGrattan. Notwithstanding this fact it was not until after the matter of the waivers came to his notice in October, 2002 that he issued these proceedings and the proceedings against Mr. McGrattan.
The plaintiff avers in paragraph (6) of his affidavit that he is not prepared to sign any waiver required by the defendant: yet in his oral evidence he swore he would have been prepared to sign waivers for 600,000/700,000 (pounds or euros not specified),. Mr. P. Hunt, S.C. in submissions sought to deflect from that position contending that the plaintiff should be more or less at large to pursue maybe even a further amended claim. In my judgment, to the extent that the plaintiff may have a claim (and it would seem to lie more properly in the McGrattan proceedings) it was expressed in paragraph (3) of the statement of claim in these proceedings as earlier quoted in this judgment.
[There is in fact no schedule to the statement of claim but there is one set out in the summons.]
I am satisfied that the plaintiff may have some form of claim for services rendered or monies expended on the premises in North King Street but no other. While it is not at all clear against whom such claim may lie, and given the confused state of affairs brought about by Mr. McGrattans convoluted reorganisation and reconstruction which has left confusion in its wake. In my judgment the claim to the extent earlier identified by me should not be struck out, but the plaintiff should be permitted to pursue such action on terms and that non constat, invoking the inherent jurisdiction of the Court the matter will and would not otherwise be so permitted. It is my judgment that the interests of both parties to these proceedings can be protected by:
(a) The execution of all the necessary waivers by the plaintiff envisaged in the Supreme Court compromise.
(b) That the sale of the Orbit Bar in North King Street premises between Armada Developments Limited and Coldport Building Company Limited be completed and the proceeds be lodged in Court to the credit of the bankruptcy matter and to have regard to the terms of the compromise in the Supreme Court.
(c) That the official assignee be joined as a party to these proceedings.
(d) That in the event of the monies so lodged being sought to be released to the official assignee and the discharge of the defendant from bankruptcy and any surplus monies being sought or absorbed by the implementation of the payments due on foot of the compromise in the Supreme Court the defendant therefrom, is hereby bound to the Court in this suit not to dispose of or to cause or permit Armada Developments Limited to dispose of the Talbot Street premises until the determination of this action or earlier order and furthermore that he reduce not his own assets below 600,000 for the like time.
(e) The following timetable is to be strictly observed:
I Within 10 days of this date the matters referred to at (a) and (b) be completed and implemented.
II Within 7 days of this date the plaintiff deliver such amended statement of claim as he may be advised in these proceedings and a statement of claim in proceedings 2002/15398P (the McGrattan action).
III Within 7 days of the respective statements of claim referred to in the immediately proceeding paragraph, being delivered defences thereto be delivered within a period of seven days.
IV That general discovery in these proceedings be made and completed by the plaintiff, the defendant and Armada Developments Limited from 7th August, 1997 to date be made on or before 11.00 am on Monday 17th February, 2003 and a like form of discovery be made in proceedings 2002/15398P by the plaintiff and Mr. McGrattan.
V That these proceedings and those numbered 15398P/2002 be listed for mention (to secure an early date for trial) on Monday 17th February, 2003.
(f) In the proceedings 15398P/2002 the defendant (Mr. McGrattan) may on notice to the plaintiff - if it be essential to refer to this order - to come before the Court' for mention on Wednesday next 22nd January at 10.45 a.m.
The reasons for the strict timetable are to have regard to the interest of the justice system, the various rights and interests of the parties hereto and those parties already involved in the justice system in the bankruptcy proceedings and the compromise made in the Supreme Court who are and have been adversely affected by these proceedings and particularly the delays in their being taken and pursued to date.
Having had the benefit of oral evidence and an opportunity of observing the demeanour of all witnesses in Court it was quite clear to me that there was in the background and unpleasant atmosphere. I formed a preliminary view - which may be displaced on a full hearing of the action that the plaintiff who is in difficult financial circumstances realising that his signature(s) were required on waivers to assist the defendant to be discharged from his bankruptcy and resolve other serious difficulties was incensed that his signature had been appended to documents without his authority and seized the opportunity to exploit an alleged grievance about which he did nothing for over five years. Equally so I formed a like view that the defendant as a result of matters that occurred in 1997 knew he had an obligation of some description to obtain Waivers under the compromise in the Supreme Court and when the plaintiff `could not be found' or make waivers available consider that they could be secured by fair means or foul.
The plaintiff in his evidence was evasive, vague and garrulous but clearly had a sense of grievance - he is not entitled (as I find as a fact he had in this case) to engage in speculative litigation and to use the Court or justice system in a manipulative manner. However, this does not mean that the timid, the confused or foolish (and I do not make any such finding against the plaintiff in these regards) should not feel confident that if they have a genuine legal right to assert that they can have recourse to the Courts; they should feel confident that the Courts will not permit them to be bullied or frightened out of their entitlements.
I have read in full and considered the authorities set out in part I of the appendix to this judgment.
APPENDIX PART I List of Legal Authorities
l. Barry-v- Buckley (1981) I.R. 306
2. Tessin Din -v- Banco Ambrosimo (1991) 1 I.R. 569
3. Sun Fat Chun v- Osseous Limited (1992) I.R. 435
4. Kennedy =v- Midland Oil Company 110 I.L.T.R. 26
5. Jodiefern -v- Fitzgerald (2000) 3 IR 321
6. Supermacs & Anor v- Katesan & Anor (2000) 4 I.R. 373
7. McCabe -v- Harding (1984) I.L.R.M. 105
8. Flanagan-v- Kelly (Unreported 26/02/1999 O'Sullivan J.)
9. Ewing -v- Kelly & Others (Unreported 16/05/2000 O'Sullivan J.)
APPEARANCES
PART II
Plaintiff: Patrick Hunt S.C., Justin McQuade B.L. (Instructed by Aherne & O'Shea Solicitors)
Defendant: James Salafia S.C., Maguire B.L. (Instructed by Stewart & Co. Solicitors)
Official Assignee: Mark Sanfey B.L. (Instructed by A.F. Smyth & Co. Solicitors)
Coalport Building Company Limited: Ronan Murphy B.L. (Instructed by John B. O'Connor & Co.)