Templeville Developments Ltd. v. Leopardstown Club Ltd. & Anor [2003] IEHC 90 (10 December 2003)
THE HIGH COURT
BETWEEN
TEMPLEVILLE DEVELOPMENTS LIMITED
PLAINTIFFS
AND
LEOPARDSTOWN CLUB LIMITED AND THE COUNTY COUNCIL FOR THE COUNTY OF DUN LAOGHAIRE RATHDOWN
DEFENDANTS
JUDGMENT of O'Sullivan J. delivered on the 10th day of December 2003
The first defendant owns and operates a racecourse over a large tract of land at Leopardstown, County Dublin. The plaintiff, by lease of the 5th June, 1998 holds part of these lands upon which are constructed, inter alia, a large and complex sports facility, several outdoor tennis courts, indoor tennis courts underneath two air filled domes and ancillary buildings. They also enjoy, in common with the defendant, the right to have their patrons park their cars in two identified car parks at all times and on "race days" (approximately twenty two per annum) on further car park or parks designated by the defendant and on non-race days on a parcel of land herein after called the yellow hatched land which lies to the south of the complex of buildings just referred to and to the north of the motorway CPO take acquired or to be acquired by the second defendant and already anticipated in the lease of 1998. The yellow hatched lands are defined so as to exclude the area affected by the CPO and also so as to exclude an area to be identified and known under the 1998 lease as the "new site".
The "new site" was intended to be an alternative site to accommodate the plaintiff's structures and tennis courts either built or to be built which would be
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affected by the then expected but as yet to be determined area of the proposed motorway take.
On the same date in 1998 the parties, aware of the impending compulsory purchase order of the second defendant and that it would in all probability affect the yellow hatched area and conceivably the entire or a significant amount thereof, entered into a supplemental licence agreement intended to be temporary governing the plaintiff's rights to develop its sports facilities including the air filled Domes to cover proposed tennis courts, outdoor tennis courts and car parking in the context of the impending CPO. The essential idea behind the licence agreement was that any structures already built by the plaintiff under the lease affected by the CPO take would have to be moved onto the "new site" at the expense of the licensor which would also have to accommodate those of the plaintiff's yet to be constructed tennis courts which it was entitled to construct under the lease.
I will return with greater precision to the arrangements in the lease and in the licence insofar as is necessary for this interlocutory application at a later point.
As it transpired the CPO take of the second defendant did affect the yellow hatched area by encroaching into it from the south and the motorway plans included a bridge over the proposed motorway servicing a large car park to the south of the motorway and accessed from the north via a ramp which, it came to the attention of the plaintiff shortly before the initiating of this interlocutory application, will extend beyond the second defendant's acquisition line into the yellow hatched area by some distance and which will displace a number of car parks marked on a hard surface and shown on photographs in the course of the hearing before me. This number appears to be somewhere in the mid to high twenties and the defendant accepts that it will have to provide alternative car parking spaces for the plaintiff's patrons to enjoy, in
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common with the defendant's patrons, on the "new site". It also came to the attention of the plaintiff in October (the injunction application having been adjourned by consent from July last in the context of the defendant's assurance that the proposed works referred to were not imminent at that stage) that the access ramp will be supported by a solid substructure with the result that there would be no access under it eastwards from the west into the remainder of the yellow hatched area over which the plaintiff claims to enjoy parking rights (in common with the defendant).
Under the licence agreement as already indicated the plaintiff was entitled in the events which have happened to the benefit of a "new site" sufficient to accommodate yet to be developed structures which it may build under the lease of 1998 comprising seven outdoor tennis courts and also sufficient to accommodate its joint car parking rights on the balance of the yellow hatched area remaining apart from the motorway take and the area of the "new site". The licence provided that any disagreement in relation to the proposed new site should be referred to arbitration. The defendant has identified an area for seven tennis courts situate in the balance of the yellow hatched area to the east of the existing dome number two and the existing (4) outdoor tennis courts already constructed on the yellow hatched area and there are disputes between the parties in relation to this proposed "new site". These are to be referred to arbitration and it is further agreed between the parties that if they are unable to reach agreement about the specific questions or some of them to be referred to arbitration it may be necessary that that particular matter should be dealt with by the High Court. Also referred to arbitration will be the question whether under the licence the defendant is entitled to have the second defendant as its agent build the ramp, described above, over an area which is outside the second defendant's CPO
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take and which affects portion of the yellow hatched area over which the plaintiff has joint car parking rights.
The result of the arbitration, accordingly, will be a determination whether the proposed "new site" offered by the defendant pursuant to its obligations under the licence satisfies those obligations and also whether it is entitled to build the access ramp in the manner proposed and described above.
The instant application is for an interlocutory order to restrain the construction of the proposed ramp pending the outcome of this arbitration.
The plaintiff submits first that it has raised an arguable case, at least, to say that the defendant is not entitled to construct a ramp which firstly intrudes over some twenty five or thirty of its car parks to which it has a joint right, and secondly which prohibits access into the yellow hatched area over which it has also rights for car parking. These rights are, it is submitted, established under the lease and are clearly intended to survive the temporary arrangements created by the licence. It is further submitted that damages will not be an adequate remedy because it will be impossible for the plaintiff to distinguish at the trial any reduction in its business referable either to its own less attractive car parking facilities in the event that the ramp is constructed on the one hand, or on the other, competition arising from a recently established sports facility in the vicinity.
It is further submitted that such estimate of loss as is advanced by the defendant in the context of its case that any delay in the construction of the ramp might cost it thousands of euro per week (the situation apparently being that the overall motorway project is being carried out by the well known construction company, Ascon and in regard to this the plaintiff says that this is an ascertainable sum unlike the damage which it will suffer and one which if necessary can be met by
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a payment pursuant to the plaintiff's undertaking as to damages. The plaintiff submits that if the court is satisfied that there is a substantial question of law to be decided, I should first consider whether the plaintiff if now refused could be adequately satisfied by an award of damages. If so then it is accepted that normally an injunction will not be granted no matter how strong the plaintiff's claim might be. On the other hand if damages would not provide an adequate remedy it is submitted I should next consider whether if the defendant were now enjoined and subsequently established a right to build the ramp it would be adequately compensated under the plaintiff's undertaking as to damages. Once again if damages were to be an adequate remedy for the defendant on this hypothesis there would be no reason on this ground it is submitted to refuse the interlocutory injunction, and an injunction should issue without any further consideration of the balance of convenience.
The plaintiff submits that in the present case once it is accepted that there is a substantial question to be tried it is clear that damages will not be an adequate compensation for the plaintiff's loss which is not capable of computation as identified above. On the other hand damages would be an adequate compensation for the defendant's loss if now enjoined from building the ramp if it is subsequently held that it is entitled so to do because of the plaintiff's undertaking as to damages and the readily quantifiable character of the losses identified by the defendant.
The plaintiff further submits, however, that if contrary to the foregoing I consider that I should move on to weigh up the balance of convenience in this case, that too clearly shows that the injunction should be granted. Such rights as the plaintiff enjoys over the balance of the yellow hatched area will survive the temporary licence agreement and continue for the remainder of the thirty five year term of the 1998 lease: it is unlikely that an arbitrator would make an order directing the removal
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of an already constructed ramp and the construction thereof would therefore permanently inhibit and curtail the joint car parking rights of the plaintiff into the balance of the term of the lease. On the other side, it is said, the defendant would merely be delayed in constructing a ramp accessing the bridge over the proposed motorway and if appropriate can be adequately compensated for this delay.
In response to the foregoing the defendant submits that the instant application is unmeritorious. It is the second attempt to bring such an injunction, the real purpose of which is to force the first defendant into yielding a more favourable agreement in relation to the car parking and other facilities at Leopardstown than the plaintiff is entitled to. A first attempt at an injunction was brought when the second defendant's contractor's vehicles first entered the site in January, 2002 and were allegedly encroaching on the plaintiff's rights on the yellow hatched area and also interfering with and depositing mud and debris on the vehicle access ways within the site. It is alleged that these proceedings were abandoned (this is strongly denied by the plaintiff). It is further said that the application is grounded on a fortuitous mistake, namely the fact that the original take line of the CPO would have meant that the access ramp was too steep and therefore the ramp had to be extended beyond the take and into an area in respect of which the plaintiff was able to make a technical argument that it eliminated car parking rights and impeded access to further rights.
As part of the submission that this injunction application is really part of an overall strategy by the plaintiff to pressurise the defendant into conceding a more favourable deal on re-locating the plaintiff's sports facilities, it is pointed out that the plaintiff is some nine months in arrears of rent in an amount of approximately 250,000.00. This was not denied by the plaintiff: rather it was pointed out that there
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were many disputes and disagreements in relation to this matter which should not be rehearsed here as they are not directly relevant.
It is further submitted that the plaintiff has not indicated a sufficient risk of damages at all and has indicated no credible apprehension of damage at least in respect of the balance of the yellow hatched area. In this regard it is pointed out that this area has been fenced off as part of the construction work requirements of the CPO for the last eighteen months or more and the plaintiff has not indicated any loss arising out of this curtailment of its access to the yellow hatched area nor has it attempted to provide itself with an alternative parking facility. The exterior flood lighting erected in this area by the plaintiff is for security purposes according to the defendant (the plaintiff says that this is to facilitate night time parking). The defendant submits that the reason why the plaintiff has been unable to point to any specific losses arising from its inability to access the yellow hatched area for car parking in the last year and a half is because there are plenty of other areas where its patrons park everyday. The defendant says that the plaintiff has sustained no credible loss whatsoever under this heading and therefore there is no need for an injunction to prevent such loss. With regard to the specific loss of twenty five or six car parking spaces under the foot print of the extended ramp the defendant accepts that the plaintiff will have to be compensated for this and submits that such compensation will be provided under the licence agreement whereby that issue is referred to arbitration. The defendant accepts that the plaintiff must be provided with additional car parking to substitute and replace these lost car parks and that issue will be or can be referred to arbitration under the licence agreement.
The defendant points to the background to the dispute and to the fact that there is an unambiguously worded arbitration clause and to the fact that the plaintiff refused
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to have these issues referred to arbitration for well in excess of a year while these proceedings were being processed and has therefore been delaying the resolution of this issue. Now it agreed at the last minute when this injunction application came to court to have these matters referred to arbitration. If the plaintiff had accepted the arbitration clause eighteen months ago then these matters would have been determined and there would now be no need for an injunction. This delay is merely a tactical ploy to put pressure on the defendant to yield a better agreement in respect of the new site than the plaintiff is entitled to achieve. Moreover, it is clear that an alternative access route can be provided for patrons of the plaintiff into the balance of the yellow hatched area even if the ramp is constructed but it is fair to point out that the plaintiff hotly disputes the viability of this alternative access route. The defendant submits that the whole difficulty arises out of the CPO and indeed the plaintiff has acknowledged as much in his affidavit and that it is clear that same was intended under the licence agreement to either curtail the plaintiff's rights over the yellow hatched area or if there was a disagreement about it such difficulty should be referred to arbitration. The defendant disagrees that the plaintiff is entitled to a demise over the yellow hatched area or the balance thereof left over the CPO and the new site had been taken out of it as claimed by the plaintiff.
In reality the loss claimed by the plaintiff is de minimis in the overall context of the car parking available to it at Leopardstown and given that the defendant is obliged to compensate the plaintiff by providing equivalent or alternative facilities in the new site under the licence. It was also submitted that the evidence in relation to the ramp is that the original ramp which turned out to be too steep would itself have blocked off access into the yellow hatched area for the plaintiff's patrons' car parking but in this context counsel for the plaintiff asked that I would bear in mind that this
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evidence was produced in a last minute affidavit filed with liberty of the court by the defendant and that the plaintiff's instructions on this point would differ with that conclusion.
Conclusions
Fair question to be tried?
The 1998 lease demises to the plaintiff inter alia
"The right to park motorcars and motor vehicles on non-race days on the parcel of land cross hatched in yellow which does not form part of the new site and which is not affected by the CPO".
Such is the description of part of the rights conferred on the plaintiff under Clause 2 of that lease.
Clause 2 of the licence provides inter alia as follows:
"And provided always (for the avoidance of any doubts), the parking rights conferred on the licensee under Clause 2 of the lease, which relates to the parts of land which is shown on map number 1 attached thereto and thereon cross hatched in yellow and which is not affected by the CPO will subsist in every respect beyond the grant and demise referred to above notwithstanding the provisions of Clause 3.11 hereof".
(Clause 3.11 provided that on the expiration or earlier termination of the licence the licensee covenanted to cease to occupy and use the licensed area and to fully vacate the same and hand up possession thereof).
It seems to me that it is at least arguable that the lease conferred parking rights on the balance of the yellow hatched area which were acknowledged in the licence and intended under both instruments to survive the temporary existence and termination of the latter. In those circumstances in my view it must be likewise
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arguable that the plaintiff now enjoys rights over the balance of the yellow hatched area and is entitled not to have those rights imperilled or infringed. The parties are in the process of refining their agreement to refer to arbitration issues as to the adequacy of the proposed new site and also as to the entitlement of the defendant to build the ramp as now proposed. In my view the plaintiff has raised an arguable case as specified above and in compliance with the established jurisprudence in this regard I do not intend to say anything more about it given that the purpose of the plaintiff's undertaking as to damages is to enable the court to avoid answering such a question at this interlocutory stage.
On the question of the adequacy of damages as a remedy for any loss that the plaintiff might sustain if I refuse to grant the injunction and hereafter it is established that the construction of the ramp has wrongfully interfered with the plaintiff's rights it seems to me that there is force in the contention that the relevant period for consideration should be the balance of the thirty five year period dating from June 1998 because if the ramp is constructed as intended it is likely to be a permanent structure in respect of which there must be at least some doubt that it will ever be removed. I do acknowledge that the defendant has proposed an alternative access route for the plaintiff's patron's vehicles to access car parking in the balance of the yellow hatched area. This is a proposal which has been developed late in these proceedings and has been subjected to adverse criticism on behalf of the plaintiff. In my opinion the construction of the ramp is capable of curtailing the range of alternative car parking facilities to be made available to the plaintiff which curtailment I consider should be viewed as a potentially permanent diminution of the plaintiff's car parking entitlements. This diminution may in the event be slight but it is not so slight in my view as to be unworthy of being weighed in the balance at this
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stage of these proceedings. I am also persuaded by the submission that it would be difficult if not impossible to quantify in damages the amount of any loss to the plaintiff arising because of this diminution in his car parking or alternative car parking entitlements and for this reason I do not think damages would be an adequate remedy for such loss as the plaintiff might sustain were I to refuse the injunction.
On the other hand I am satisfied that damages would be an adequate remedy for any losses which the defendant would sustain and that these would be an amount which would be capable of being met by the plaintiff pursuant to its undertaking as to damages.
In these circumstances it is appropriate that I grant the injunction sought and I purpose so to do: that is to say to make an order prohibiting the defendant or its servants or agents from constructing the ramp at the western extremity of the yellow hatched area pending the outcome of the arbitration referred to in this judgment.
I consider however that a substantial amount of the disputed rent arrears should be placed on joint-deposit with the parties' respective solicitors or otherwise by agreement pending further order of the Court. The amount to be so lodged should be 150,000.00 and the proposed injunction should take effect from the date of such lodgement subject to the proviso that the amount be lodged before 31st December, 2003.
In reaching the foregoing conclusion I wish to make it clear that I am specifically following the authority of the Supreme Court judgment delivered per Blayney J. in Ferris v. Ward [1998] 2 I.R. 194 at 201/2 as follows:-
"In the circumstances what the court has to do is to look at the balance of convenience and the manner in which this should be approached is set out
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with great precision in the same judgment of Diplock L.J. in a passage immediately following that already cited:-
'As to that, the governing principle is that the court should first consider whether, if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction, he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant's continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages in the measure recoverable at common law would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff's claim appeared to be at that stage. If, on the other hand, damages would not provide an adequate remedy for the plaintiff in the event of his succeeding at the trial, the court should then consider whether, on the contrary hypothesis that the defendant were to succeed at the trial in establishing his right to do what was sought to be enjoined, he would be adequately compensated under the plaintiff's undertaking as to damages for the loss he would have sustained by being prevented from doing so between the time of the application and the time of the trial. If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason upon this ground to refuse an interlocutory injunction.
It is where there is doubt as to the adequacy of the respective remedies in damages available to either party or to both, that the question of the
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balance of convenience arises. It would be unwise to attempt even to list all the various matters which may need to be taken into consideration in deciding where the balance lies, let alone to suggest the relative weight to be attached to them. These will vary from case to case.'
I do not think that there is any doubt here as to the respective remedies in damages. It is clear that the receiver's remedy would not be adequate: not because damages could not adequately compensate him, but because Mr. Ward could not be relied upon to have the financial means to pay the damages. On the other hand, I think there is no doubt that Mr. Ward would be adequately compensated by an award of damages since the loss he would suffer as a result of an injunction being granted would be entirely pecuniary and the receiver would be in a position to pay whatever damages he might be awarded. There is accordingly no reason to refuse the receiver an injunction. It follows that I would dismiss Mr. Ward's appeal against the injunction granted to the receiver."
I also wish to make it clear that if I am incorrect in reaching the foregoing conclusion and if had been appropriate for me to further consider the balance of convenience (which I understand to become appropriate only if there is a doubt as to the adequacy of the respective remedies in damages in respect of which I entertain no doubt as already indicated) I would hold that the balance of convenience also favours the granting of an injunction because it seems to me that the construction of a permanent ramp as proposed by or on behalf of the defendant would bring about a situation unlikely to be reversed whereby the range of possible alternative car parking facilities that could be made available to the plaintiff by the defendant pursuant to its
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obligations under the licence would be diminished and that this would be an injustice not capable of being remedied in damages. On the other hand a temporary hold-up in the construction of the ramp would be a wrong which would be capable of remedy firstly in the sense that it could be compensated in damages as I have already held and secondly in the sense that no permanent harm would be done to the defendants' rights.
The plaintiff's motion for judgment in default of defence
The defendant says that the plaintiff should have agreed at once to arbitration and that the motion for judgment in default of defence was artificial and indeed an attempted ruse to trick the defendant into taking a step which would have disentitled it from proceeding to arbitration. The plaintiff says that the defendant is even now not ready to identify the issues for arbitration and that in any event there are certain issues apart from the arbitration issues which should be litigated in these proceedings.
In my opinion the plaintiff is not entitled to judgment in default of defence and I would dismiss the plaintiff's motion with costs thereof to the defendant to be taxed in default of agreement.
With regard to costs of the interlocutory application for an injunction I will in the usual way reserve these to the trial judge.