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Cite as: [2013] IEHC 526
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Judgment Title: The Leopardstown Club Limited -v- Templeville Developments Limited & anor Neutral Citation: [2013] IEHC 526 High Court Record Number: 2012 6741 P Date of Delivery: 02/09/2013 Court: High Court Composition of Court: Judgment by: Charleton J. Status of Judgment: Approved |
Neutral Citation: [2013] IEHC 526 THE HIGH COURT [2012 No. 6741P] Between: THE LEOPARDSTOWN CLUB LIMITED Plaintiff -and-
TEMPLEVILLE DEVELOPMENTS LIMITED AND PHILIP SMYTH Defendants Judgment of Mr. Justice Charleton delivered on the 2nd of September, 2013. Leopardstown racecourse was founded in 1888, at a time when it was in the countryside near Dublin. Now, it is surrounded by the city, becoming the only urban racecourse in Ireland. It is used for National Hunt racing and flat racing. There are 23 race meetings on the track every year. The most significant of these are the Hennessy Gold Cup meeting and the Christmas racing festival. For the purposes of this litigation, the racecourse is owned and controlled by the plaintiff company (hereinafter “Leopardstown”), though some portions of the land, particularly on the Carrickmines side, are owned directly by Horse Racing Ireland. The campus in which the racecourse is situated also contains a golf course, situated in the middle of the track, a nightclub towards the back of the main stand, a golf shop and a fitness club. This club is central to this litigation. The fitness club is on property leased by the first named defendant company Templeville Developments Limited (hereinafter "Templeville") from Leopardstown. The second named defendant Philip Smyth is the guarantor on the lease and on the agreement which is most central to this judgment. Templeville, despite being a limited liability company and having four directors, is totally controlled by Philip Smyth. Leopardstown and Templeville are physically the closest of neighbours. The fitness club is branded as Westwood. There are other Westwood clubs in Dublin city. Unlike this situation, those others are situated on their own land. This club features gymnasium, tennis, swimming and other facilities to a very high standard. There is also a facility called Fit Zone and a children's party area. These are all located proximate to the racecourse grandstand. For whatever reason, the parties as neighbours do not get along. As with many such disputes, where people continue to live or do business side by side without severing the relationship by one party moving elsewhere, the dispute has continued over decades: in this instance for 14 years. I do not regard it as essential to rehearse every detail of the bitter disputes between the parties that have marked this time. Litigation in abundance has resulted. Many sets of proceedings were ongoing in the Autumn 2011, when the parties decided that an attempt to put matters behind them would be a good idea. Hence, mediation was arranged. It was apparently successful. Having ostensibly settled their differences under a mediation painstakingly conducted by Paul Gallagher SC in October 2011, and having set out their mutual rights and obligations in a mediation settlement agreement dated the 26th of that month, the defendants Templeville and Philip Smyth no longer regard themselves as bound by the terms of that contract. In that regard, however, Templeville has had no independent say. These defendants claim that the mediation settlement agreement has been brought to an end by the conduct of Leopardstown. They assert a breach of agreement so serious as to be a fundamental breach that terminated the rights and obligations of Templeville and Philip Smyth as innocent parties, returning them to a state that no such agreement existed. The defendants also claim that by virtue of misrepresentation, and or because of a mistake central to the mediation process as to the site of a major electricity cable, which was allegedly set up and exploited by Leopardstown, the mediation settlement agreement was void from its inception. The defendants further assert that if the mediation settlement agreement is valid and has not been terminated by the fundamental breach of Leopardstown, they have been grievously wronged under the terms thereof and are counterclaiming for damages. They also seek declarations that rights of way to their premises over and through the racecourse have been breached and claim appropriate declarations through this process. A claim is also made by Templeville and Philip Smyth to ownership through adverse possession of certain land on which three shipping containers are sited. Leopardstown asserts that rent and service charge due under the mediation settlement agreement has not been paid. Leopardstown seeks the termination of the lease under which the defendants hold their premises on the racecourse and argue that the conduct of the defendants has been so wrong that they are unworthy of equitable relief against forfeiture. Background The purpose of the mediation process was to settle all the disputes between the parties that were then outstanding. At all stages, Philip Smyth alone controlled the Templeville side of the mediation negotiation while Leopardstown were represented by various officers. In the mediation process the subject of ESB cables running through a proposed site of seven new tennis courts proximate to Dome 2 never arose on either side. This cable has now become central to this litigation. There are two cables, one skirting the site and another traversing the site. At the first session, the mediator had identified the main issues on both sides and position papers and replies were exchanged between October 5th and 7th. A map was produced on the 4th October showing the layout of the site. This was done quickly by Ian Roberts, the engineer engaged by Leopardstown, and showed a jagged edge and a map accompanying it showed a major underground ESB cable skirting the site. No map produced during the mediation process showed another cable which traversed the site. Later I will discuss the issue as to whether Templeville or Leopardstown were aware of this cable. As will be seen, Templeville had applied for planning permission to lay out seven new courts in this exact place and this had been granted by the local authority. During racing days, this site was useful to Leopardstown as a car park as were the four outdoor tennis courts that had been laid out and surfaced beside this unfinished site. The racecourse used these too. Templeville put forward the argument that outdoor tennis was not popular and that they should be permitted to erect a further dome, Dome 3, to protect the new seven tennis courts when they were laid out. In the alternative, the plan was that the site could be used for indoor soccer. In doing so Templeville were prepared to cede back to Leopardstown four outdoor tennis courts to be used on a permanent basis as a car park. It would seem that on the 10th October, Leopardstown conceded that the site should be rounded off to its edges, thus removing the jagged boundary. Leopardstown agreed to give up the right to park on the new site of the seven tennis courts on race days and instead were prepared to take back the four outdoor courts as a car park to the benefit of patrons. There was discussion about the new site and the issue arose as to whether Leopardstown would concede the erection of a structure over the new seven tennis courts. Leopardstown were concerned about landlord and tenant rights possibly arising. After this meeting some heads of terms were generated and a further position paper was exchanged by both sides. Another meeting took place on October 18th. At this meeting it was agreed that Templeville could put on a covering over the site of the seven tennis courts; which Templeville contemplated as taking the shape of a dome. What was probably then conceived by both parties was that either an irregular, as opposed to rectangular, shaped dome or two interlocking rectangular domes could be erected. In the later agreement, this is reflected in the fact that Leopardstown agreed to support any planning application for an appropriate structure by Templeville. In effect, the mediation process was finished by Friday, the 21st October, 2011. An agreement in principle had been reached. Again, no ESB cable was discussed. Engineering representatives on behalf of both sides met on the following Tuesday, the 25th October at the Westwood café. It appears that they did not walk the site. The mediation settlement agreement was signed that day on behalf of Leopardstown by Denis Brosnan. Between Friday the 21st and the following Wednesday, certain small issues had arisen that were supplemental to the agreements that had been guided to a conclusion by the mediator. These issues concerned signage; service charge; lighting in car parks; and an issue of cars using Leopardstown to bypass heavy traffic during rush hour. These small issues were discussed and made the subject of a solicitors’ note that was appended to the agreement on Wednesday, the 26th October, 2011 and signed by both solicitors. Philip Smyth had signed the agreement on behalf of Templeville earlier and is the personal guarantor of Templeville’s performance of it. The mediation settlement agreement was supplemented by a solicitors’ note and by consent of the parties on the 3rd November, 2011 and was lodged as part of the announcement to the High Court that the monetary claim had been settled. What perhaps has not been appreciated on the part of the defendants in this case is that whatever the rights and wrongs of any situation over the years of the relationship prior to this settlement, whatever litigation was pending and whatever disputes festered or remained to be resolved between these parties, all of these were entirely removed as justiciable controversies through the agreement thus entered into. An unnavigable barrier has been placed in the way of any controversy that the mediation settlement agreement embraced. That barrier is the terms of the settlement document. The agreement Leopardstown contends that the agreement represented a fresh start. It seems that for a short time thereafter business relations between the parties were positive, at least on the surface. Raymond Horan, director and company secretary of Leopardstown, was tasked with overseeing the implementation of the agreement. Day-to-day interactions with Templeville concerning issues on the ground were delegated to Pat Keogh, the newly appointed chief executive officer of Leopardstown, and Nessa Joyce, racing and operations manager. Matthew O’Dwyer was also involved with matters on the ground, particularly lighting and car parking. The evidence on behalf of Leopardstown is that Leopardstown has at all times endeavoured to discharge its obligations under the agreement and remains fully committed to enforcing and abiding by the agreement. Philip Smyth and Templeville assert that almost immediately after the agreement was reached, Leopardstown began breaching the terms of the agreement and that these breaches were so detrimental to their ability to operate their business that they constituted a fundamental breach of the mediation settlement agreement. What was called a notice of termination for fundamental breach was served on Leopardstown by Templeville on the 15th June, 2012. All of these decisions were made by Philip Smyth. Templeville as an independent corporation were never consulted, much less made any decisions, as to any of this. Correspondence In his letter of the 9th November, 2011, Philip Smyth mentioned that the ladies who sell chocolate and fruit on race days had left rubbish near Dome 2. Barriers used to marshal horses through car park 1 and near Dome 2 had not been fully cleared, he asserted. He complained that during the recent heavy rain "a large amount of water came down from the grandstand's roofs and torpedoed on to the roof of" his facility. He complained that cars parking in front of the grandstand on non-race days had stickers put on them when they parked on double yellow lines. He complained that during a recent race day or days, very few racing enthused people had attended and that the car parks that he was normally entitled to use on non-race days had been underused. Photographs of some horse droppings were enclosed. No abundant amount of manure is involved. What is extraordinary about this letter is that Philip Smyth had felt the need to write it at all. I am satisfied that it was made perfectly clear by Pat Keogh that if the parties were to resort to writing letters to each other then the spirit of the mediation settlement agreement would be undermined. He was right. Whereas Leopardstown drafted a reply, it was not sent for that express reason. Instead they attempted to reopen ordinary channels of friendly communication. I am satisfied that this effort was calculatedly rebuffed by Philip Smyth and, through his express direction and control, by Templeville. Very quickly, also, the solicitors on both sides became embroiled as fresh disputes bubbled to the surface. In order to resolve these, it will be necessary to approach each issue on the basis of the degree of importance which a reasonable person would attach to whatever fault attaches to the party responsible. In terms of the correspondence, on the 7th February, 2012 the solicitors for Leopardstown wrote to the solicitors for Templeville complaining that some €156,827 in water rates remained unpaid. A without prejudice meeting was suggested. That meeting did not happen. I am satisfied that it did not happen because Philip Smyth had instructed Templeville not to engage. The 30th March, 2012, dawned with a letter from Leopardstown's solicitors to Templeville’s solicitors complaining about an apparent attempt to drill a well on the racecourse with the erection of high fences. Also mentioned were the adhesion of advertising material to the sign of the Leopardstown Road entrance by Templeville; the spillage of sewage near the racecourse; a break in and changing of locks at the water meter service press inside the grandstand; and the lack of progress in the attempts by the engineers for Leopardstown to contact the engineers for Templeville with a view to progress in works under the mediation settlement agreement like the car park and the new site. The answer from Templeville’s solicitors of the 3rd April, 2012 contained a bizarre lie, clearly properly based on instructions, in claiming that no well drilling attempt had taken place. On the 19th April, 2012 the Leopardstown solicitors complained about a very serious matter: rent for January and February had been paid by Templeville but at the lower rate that had ceased to apply under the mediation settlement agreement from the beginning of that year; furthermore, no payment in respect of service charge had been made. On the 27th April, 2012, the solicitors for Leopardstown suggested scheduling the works that were necessary to implement what was needed under the agreement. That letter was ignored. The evidence establishes clearly that this was because of the strategy on Templeville’s part of ignoring any communication from Leopardstown in favour of constructing a case that they had been badly wronged. The origin of this strategy was Philip Smyth. On the 2nd May, the solicitor for Philip Smyth wrote to the engineer for Templeville in the following terms:
It is pointless to go through the rebuttal of this letter and the further fulsome correspondence which gushed out of the again-active dispute as the Court has had evidence of all the substantial matters which need to be addressed in this judgment. In addressing what I consider to be of importance, I have not forgotten or failed to have regard to any complaint. Thirteen extra long days of court time have been filled with these complaints and any answer there may be to them. It suffices to say, that only substantial complaints will be addressed; and these as to the essence thereof. It also suffices to note that the correspondence continued. On the 8th June, 2012 the solicitors for Templeville, not the solicitors in this litigation, who at all times acted professionally, claimed that Leopardstown was in fundamental breach of the mediation settlement agreement. This letter describes replying correspondence from Leopardstown as being a "crude, reactionary response". A further letter from these solicitors, dated the 13th June, 2012 reiterates old wrongs and makes new complaints. It ends in this way:
In the meantime our client is cognisant of its obligation to act promptly and decisively in this matter. TAKE NOTICE, therefore, that our client elects to terminate the mediation settlement agreement of the 26 October 2011 with immediate effect because of your client's fundamental breach of it. We shall be writing to you separately seeking remedy that breach. Approach of the Court The map The well and the water tanks
From France in February 2012, an instruction was received from Philip Smyth by Templeville that instead of proceeding with putting in water tanks, a well was to be drilled instead. In his evidence, he justified this instruction on the basis that if a well was successfully drilled that he would go and present the good news to Leopardstown: abundant free water, as he put it, would be to the benefit of everyone. It is also clear that he insisted that his intentions would be concealed by the ostensible purpose of installing water tanks. Apart from his own evidence, this state of affairs is evidenced in an e-mail from Brenda Flood of Templeville to George Farrell which states: "I spoke with Philip [Smyth] he said just go ahead and organise the drill for the well. No need for me [to inform] the racecourse". As with other matters, the unfortunate recipient of this instruction was Brenda Flood. She is the managing director of Templeville and together with Karen Polley and Philip Smyth, one of the three directors of Templeville who gave evidence. Brenda Flood is universally respected on all sides of this dispute and for good reason. She is a highly intelligent and reliably efficient manager who would clearly be an asset to any organisation that employed her. She was put in an impossible position on this issue and on other issues by Philip Smyth. On the 4th March, 2012 "a builder's skip for cleaning up after the drilling" was arranged within Templeville. On the 5th March, 2012, Matthew O'Dwyer, the general manager of Leopardstown, received notification that exploratory works for the installation of the two tanks were to be conducted at the appropriate location on the following Wednesday. He rang the Westwood club and left a message seeking details from the appropriate person. His telephone calls were not returned. This was under instruction from Philip Smyth. Matthew O’Dwyer then emailed the club forbidding works until consultation had taken place under the mediation settlement agreement. His approach was far from unreasonable as evidenced in his e-mail to Templeville of that date:
Had water been found and not controlled, the proximity to the racecourse of the proposed well could have ruined the surface of the gallops. Damian Kirby, maintenance caretaker, had met the men and they also proposed to construct a kind of French drain to take the silt from drilling. Leopardstown had not agreed to the drilling of any well. If Templeville had wanted it, they could have asked for it. Instead the approach was to enter into an agreement which, certainly as to this provision, meant nothing in terms of obligation. At this trial, instead of admitting that the defendants were about drilling a well, Leopardstown was left to prove this matter by evidence and the production of photographs of the equipment and the high fencing installed proximate to the gallops. Philip Smyth in evidence eventually admitted that well drilling was his purpose. If neighbours behave in an underhand manner they cannot reasonably expect to be treated with anything other than distrust. What is worrying about this episode is that Philip Smyth instructed what he regards as his staff, but who in reality are employed by Templeville, to engage in evasion and obstruction. It is clear that while a well may have been a good idea, the appropriate approach would have been to honestly discuss the plans with Leopardstown and to avoid the kind of machinations that experience shows raises the emotional temperature of even the most sanguine of individuals. The water meter cabinet The rubbish and horse droppings issue A racecourse will of course have horses on it and horses will drop the waste from their digestive systems randomly as they walk around. The parade ring at Leopardstown is to the back of the grandstand. Racing personnel and punters congregate around this area in order to get a good view of the horses on which they are spending or are about to spend good money. The idea, apparently, is to see what kind of condition the horses about to race are in and whether they are worth a bet. Some gossip, no doubt, is exchanged together with tips as to form, of varying reliability, part of the currency of this gathering. To get to the parade ring, the horses must leave their stable area in the centre of the racecourse, proceed through the race track, exit the track by the side of Templeville's main premises and proceed through the car park which, for this purpose, has lines of fencing erected in the shape of movable barriers. These are essential so that if a horse panics it will not hurt members of the public. With five or six races on a card, there can be a considerable amount of droppings. Some of the correspondence in relation to this issue has already been referenced. I am satisfied that Leopardstown make substantial efforts to clear all horse droppings as and when they occur and at the end of race meetings. On less than a handful of occasions, however, some residues of horse droppings have been left in the car park. Complaints were made about this in 14th January, 2007, two occasions in July, 2008 and in 2012 on the 4th February, the 8th June, the 13th October and the 4th November. From the photographs produced in court, on occasion the application of a hose as well as a shovel could well benefit the cleanliness of the area. As parents and children may be accessing the Westwood club belonging to Templeville, it is unfortunate when it happens that dung is walked into the otherwise scrupulously clean premises. This is all a matter of give and take. As between neighbours who tolerate each other is a matter easily solved. In the context of Templeville's attitude to Leopardstown, the very small number of issues concerning horse dung has been seized upon as a major offence and a deliberate insult. This it is not. Three containers and the blocking car
Later in this judgment the court will deal, in so far as is necessary, with prescriptive rights. Characteristic of these is that no claim to any form of adverse possession can arise where occupation has occurred through force, concealment or permission. The claim made by Philip Smyth is that because Leopardstown gave him permission to site these containers where they now are, that adverse possession of the land thereby arises. This claim is self-contradictory. Nor was any evidence produced as to how long the containers were there. What is worrying about this claim is that it demonstrates that the person who made it as capable of making unsubstantiated demands on the property of another party without any justification. The claim had every appearance of arising simply out of whim while Philip Smyth was in the witness box. There may well be emotional impulses related to the past relationship in this, but with the intervention of the mediation settlement agreement, any past rights or wrongs can no longer form part of this litigation. The area of the four tennis courts that are outdoors and at the rear of Dome 1, beside Dome 2, is under the mediation settlement agreement to be ceded by Templeville to Leopardstown for car parking purposes. David Harris, the general manager of the Westwood club, gave evidence that he was asked to park a car at the gateway which would give access to this area. Regrettably, his evidence is not reliable. The car has been there since the 14th June, 2012. In addition, despite the fact that under the agreement the tennis courts were to be repainted as car parking, the gateway was shut and locked and additionally secured. When access was asked for at an early stage, reference was made by Templeville to advance tennis bookings. The true reason for this excuse emerged in the evidence of David Harris. The origin of this instruction was Philip Smyth. The Court was asked to believe in the evidence of Alan Leach that the car had been parked there temporarily but “had died.” The Court has heard of mechanics and of the Automobile Association and so have these witnesses. They look foolish. The car has now been parked there for over a year. On the 14th June, 2012, David Harris wrote to another Templeville employee:
Blocking a fire escape With every complaint from Templeville, the attitude in the background needs to be kept in mind. Matters were generally over-emphasised in evidence; what could have been sorted out through communication was shunned in favour of storing up a flavour of bitterness to present to the court. No insight was present as to the effect that their own conduct would have on even the most stoic of neighbours. On the 25th March, 2012, on the express or implicit instructions of Philip Smyth, Brenda Flood e-mailed all the senior managers in Templeville in the following terms:
What I am not satisfied of, on this issue, is that anything was done by Leopardstown in a malicious manner. When it comes to matters of fire, extreme caution is needed. That, however, is a matter for both sides. No reasonable person could countenance an attitude of preferring to take a photograph, rather than dealing with such a serious matter. On the 29th March, for instance, a bale of hay or straw matting was put where it should not have been put. The fault there is Leopardstown’s; the fault in not following that up in immediate action is that of Templeville. The situation is not capable of exact analysis because of the lack of complaints. Damien Kirby, as maintenance caretaker of Leopardstown, believes that he never blocked an exit. He struck me as being an honest witness. Even still, from time to time there seem to have been some problems. Barriers On the 9th March, the throughway beside Fillies that can lead to car park 1 beside Dome 1 was blocked. This happened again on the 30th March. Some degree of fault here must be ascribed to Leopardstown since no one from Fillies can be blamed. Again, with ordinary communication, this matter could have been sorted out. I am not satisfied, as a probability on the evidence, that serious disruption was caused to patrons of Templeville by these incidents. People are used to coming to car parks and having to look around for a space. There is no right in the lease for Templeville to use any particular route as of right. On the express instructions of Philip Smyth, the reaction was to remove and dump barriers. The response of Templeville was utterly out of proportion. It showed a determination by Philip Smyth to escalate the situation from an early stage so that issues that could be seized on as grievances would always remain as a record about which he could later complain. On the instructions of Philip Smyth, which once again badly compromised the staff of Templeville, barriers and beautifully made wooden benches were damaged. A perhaps extreme protest in this context might be to carry the barriers and put them in a place which would cause them to be noticed by Leopardstown and perhaps thereby to learn a lesson. Instead, on the 30th May, barriers belonging to Leopardstown disappeared. This was followed up by 19 barriers and 3 benches being taken by Templeville staff and thrown over a wall down a ravine towards the M 50. The photographs demonstrate that many of these were wrecked. On the 12th May, a further 17 barriers went the same way. This is hooliganism. Little of this was the fault of Templeville staff who, under proper leadership, would have displayed restraint and common sense. Stickers on cars In evidence, Philip Smyth complained that putting stickers on cars was a terrible way to treat young staff. The entire matter has been exaggerated out of all proportion. Some samples of the stickers were produced to the court. These are about 8 cm x 18 cm. They were never plastered across somebody's windscreen, so they couldn't see, but were instead placed on the rear of the driver’s window, or rear passenger window if it was a saloon car. Leopardstown staff were entirely within their rights in acting as they did. Sewage Wrongful denial of access A vast amount of evidence has been given on this issue. Most of it seems to have been proffered on the basis that the court should regard the mediation settlement agreement as at an end and should reassign the rights to the parties based upon the view of an independent mediator. That is not the function of the court. The parties are at large as to what agreement they reached and the court is not entitled to interfere with that agreement, absent an appropriate defence. Clause 9 of the mediation settlement agreement governs race day parking and shuttle bus arrangements for those 23 racing days of the year. Complaints have been made that some race meetings are small and that car parking in the four designated areas, in the event that the four outdoor tennis courts ever get made into a car park, is poorly taken up. This is irrelevant. Sensible evidence was given that in the event that the Leopardstown car park was used that it might have proved more suitable on most of the race days than the arrangements currently in place: but this is not what was asked for, much as provided for, during the mediation process. Evidence has been heard of inconvenience to mothers with children, whereby five minutes was lopped off an agreed concession for those picking up and dropping children on race days, of a lack of complete knowledge by the security personnel and an attempt to allege to the court that these men were rude. A video with regard to the latter was produced which was not only entirely unconvincing but strong evidence that the security personnel were reasonably trained, polite and friendly. During race days, members of the public who are not important racing folk like jockeys and owners and commentators and administrators are not admitted to the car parks near to Templeville’s Westwood premises and near to the grandstand and parade ring. Equal treatment is given to those using the Templeville facilities. Important horse people get to park in a privileged way. The entrances remain open during race days for all comers but members of the public, including those coming to the Westwood club, are required to park, if coming from the Leopardstown road entrance at the Horse Racing Ireland car park, and if coming from Carrickmines, in the Carrickmines car park. This is supposed to start four hours before the first race of the day and end two hours after the last race of the day. This may be irksome to either the public or to those using Templeville’s services but it is what has been agreed. I note quote clause 9 of the mediation settlement agreement:
There have been occasions when the security personnel were over enthusiastic and stopped people coming from the Leopardstown Road entrance into Templeville’s premises of the Westwood club too early. A small incident of this occurred on the 28th and the 29th January, 2012. In addition, the International Thoroughbred Breeders Association met in Leopardstown on the 24th and the 25th February, and An Taoiseach, tireless in promoting Irish industry, attended. There was no provision for blocking off entrances and this was inconvenient. A complaint was made on the first day and any inconvenience was limited and entirely minimised on the second day. Philip Smyth had been invited to meet An Taoiseach but, as noted, was elsewhere. On another occasion, some energetic ladies from a nearby basketball club came and did a foot race around the racecourse, there were no fences apparently, with a view to raising money. The inconvenience of this is complained of by Templeville and it sounds, and it is, silly. The racecourse is entitled to use its facilities as it wishes. A student race day is complained of on the 28th March and it is said that drunken students attended “descending in buses”. This strikes me as an exaggeration. On that day the four hour rule was broken. On the 15th April, the four hour rule was again broken. On the 14th June, there was another minor breach. None of these breaches were for a serious length of time and none of them were in consequence of a deliberate policy by Leopardstown. None of this would happen when the parties were in communication with each other. The correspondence clearly establishes that this situation is partly lack of attention by Leopardstown but, as to the vast bulk thereof, a result of the entrenched and entirely self -motivated attitude of Templeville as directed by Philip Smyth. In addition, on a number of occasions, specifically on the 14th May and the 22nd June, 2012, temporary signs indicating that there was no through road were left up along the Carrickmines entrance. In fact the road was functioning. This seems to have happened, but it was minor and there is no evidence of any inconvenience. Breach of contract: reduction in rent
In evidence, Philip Smyth was asked as to why he gave an instruction in early March that rent should be paid at the 2011, and not the 2012, rate. He gave a number of reasons. None of these amounted, even if correct, to a serious breach of contract. In the context of the agreement which he had entered into there was no entitlement to withhold rent. First of all, it was said that Willie Gibbons had confronted his staff. He is the racecourse manager and therefore is responsible for managing such things as barriers and ensuring proper cleanup after races. As with the staff from Templeville, he is a credit to his employer. Unlike the staff from Templeville, however, he does not labour under the burden of emotional mismanagement. When, on the 12th May, 2012, the barriers and seats were flung into the ravine, he rightly queried this matter by going to Westwood reception and asking for an explanation. He asked to speak to Brenda Flood; but she would not meet with him. He was very unhappy with what had happened. Notwithstanding that, I am satisfied that, within the measure of appreciation that must be allowed to human nature, he behaved properly and formally. His membership of the Westwood club was cancelled out of the blue. Philip Smyth seeks to justify this, as it was at his direction, but in reality this was nothing other than an act of spite. Even had set off been possible, Templeville was in the wrong. Further, no one can see forward in time. Secondly, Philip Smyth complained that the signs at the Leopardstown Road entrance were not properly done. This is wrong. While Leopardstown insisted on using blue, Westwood at their other clubs have paid the designer the compliment of copying her colour. There is nothing to complain about. Thirdly, he said that the well drillers had been put off the site. So they had, and rightly too. Fourthly, he said that priority had not been given to installing lighting in car parks 1 and 2. This was supposed to have been carried out under clause 4.4 of the mediation settlement agreement within six months and no later than nine months, with the possible delay because of planning permission difficulties. Further the public ownership of the space required public tendering. In reality, any delay is substantially explicable by the lack of cooperation by Templeville, as evidenced in the letter of 2 May 2012 quoted above, and in particular the emotion-driven instruction by Philip Smyth not to cooperate in any process involving Leopardstown. As a fifth matter, Philip Smyth complained that Leopardstown were not cutting the hedge and grass between car parks 1 and 2. As he was out of the country, I do not know how this complaint could rationally be made. No complaint is made anywhere about this in correspondence and, even if it were, this is a trivial matter. The sixth complaint concerns horse manure. That has been analysed above. As to the seventh issue, the question of barriers is raised. Actually, in the context of what was done, this complaint would be ironic were it not also groundless. Lastly, Philip Smyth complains that in reality he was dealing with the old chief executive of Leopardstown rather than with the new one. I reject that complaint. There was nothing wrong with the old chief executive and there is nothing wrong with the new one. It is also hard to imagine how someone can complain of having to deal with an individual when they are living about 1000 km away in France away from the dark Irish winter. There was no basis for withholding rent. A clear breach of the mediation settlement agreement was wilfully engaged as of March 2012, by Templeville on the direction of Philip Smyth. Car parks
The impenetrable nature of the problem faced by Leopardstown, whatever were the rights and wrongs of the situation prior to the mediation settlement agreement, is internally evidenced by emails inspired by Philip Smyth’s direction which were exchanged in August 2012. A member of Templeville staff writes to a senior manager: “The potholes have not been repaired. Will I write to remind them would we prefer that they were left undone?” The answer is given the next day: “No don’t send another letter. Take photos today with date. And say again in another week etc.” Thirdly, the lighting is said to be substandard. As it turns out, the lighting is not quite the right standard. A probability is established, however, that the lighting would have reached the appropriate standard had Templeville allowed a professional person on their behalf to meet with the lighting contractor from Leopardstown. During the course of this hearing, agreed evidence was given as to defects and the commitment made in evidence to rectification would, I am completely satisfied, have been given to Templeville by Leopardstown absent this litigation. Counterclaim I have had regard to the opposing evidence that attendance is about 71% higher on non-race days, compared to race days. This statistic can be looked at in a different way, in which case it looks more like 30%. I have also taken into account references to international journals and perhaps not so reliable websites. The evidence from both experts, one on each side, was genuinely helpful. It is also irrelevant. The parties bargained for this and that is what they have got. The counterclaim has no basis. A loss is claimed by the defendants of €1.189 million. Members of Westwood sign a form on joining saying that there will be parking restrictions on race days. There is also a plaque on the wall of Westwood indicating this. In addition to any change that may be due to people not attending because there is racing on, there is a lot of competition among these kind of clubs and, regrettably, all but the best patronised leisure facilities have gone the way of so many other businesses have gone since the economic crisis manifest from 2008. The membership of Westwood through Templeville at Leopardstown has kept relatively steady which is a tribute to good management and the attractive nature of the product provided. Rights of way
Mistake and the agreement In addition, the site was the subject of a planning application in 2007. At that stage Templeville were planning to construct seven outdoor tennis courts and to this application Leopardstown put in an observation. This was made by Ian McGrandles on behalf of Leopardstown through a firm called Tíros Resources. In the observation, he refers to an earlier planning application that had been made by Leopardstown in 2002 that included this site. This application showed both cables. It is inconceivable that Templeville did not have regard to this application which was lodged together with appropriate drawings on the 12th July, 2002. In it, drawing D 2443-11 C121 PL1 showed an alignment of two almost parallel 220 kV underground cables one of which traversed the application site. In the observation by Leopardstown on the planning application which was lodged on the 21st February, 2007, and directly relevant to the application being made by Templeville, the following was pointed out: “there are two 220 underground kV ESB cables and an associated wayleave at the western edge of the proposed site” and an observation was made that it was not shown on the site plan as required under the relevant Planning and Development Regulations. That is not all. The local planning authority then engaged by seeking additional information from Templeville, stating: "it will be necessary to consult with ESB regarding the potential impact of development on the ESB cables indicated as traversing the site. Please submit written evidence of consultation with ESB on this matter.” On the 19th July, 2007, Brendan O'Sullivan, on behalf of Templeville, responded to this request including a revised position of the access to the site showing the line of the ESB cable traversing the site marked in yellow and in ESB link box within the application site. Evidence was also submitted of consultation with the ESB by Templeville about the cable traversing the site. Following a meeting with John Daly, who is a manager for high-voltage cables, an e-mail was exchanged between them summarising their discussion as to this transverse cable and making the following points:
• The curved pedestrian entrance will be redesigned to avoid a conflict with the cable circus at the steps, if it proves necessary • The lower vehicular entrance will be moved from the NE corner to the SE side to avoid conflict • The proposal to install low shrubs over part of the cable route is acceptable to ESB, provided no trees are installed • The cable was originally installed in this area in non-road construction, so at all traffic crossing locations, the back filling must be replaced to road construction standards. If the cable depth has been compromised, this may require special provisions to spread traffic loading, such as steel plates/concrete slabs • All planned signage and fencing posts must be designed to avoid the cable route • ESB Central Site should be re contacted to obtain an up-two-date record of all ESB services in the area. On the 26th May, 2008, a position paper was submitted by Templeville during the course of the arbitration to Paul Gardiner SC. Since this arbitration was about the land which Templeville claimed to be entitled to, the submission by Templeville described the land and at para.13.5 added:
It is impossible not to be satisfied that Templeville had knowledge of the transverse ESB cable. I am satisfied that Philip Smyth, in claiming no knowledge of the cable is giving evidence that, in these circumstances, a court could not accept. Unawareness of this transverse cable, of which Templeville clearly had knowledge, is blamed on Ian Roberts, the engineer who drew up the relevant map and who decided as a matter of subconscious prudence not to show any features on the interior of the site. Thus, the maps used in the mediation process, including for instance Arup D4352-20, show the skirting ESB underground cable in an approximate position. Ian Roberts was skilfully cross-examined. I entirely accept all of his evidence. In particular, whether conscious or unconscious, putting nothing on the inside of the sites that was to be devised to Templeville was entirely prudent and completely in accordance with a fair-minded desire to avoid trouble. As he put it in the witness box, if in marking the cable within the site he had been even inches out, the result would have been another court case. This is a prudent observation. On the 27th March, 2012, Toal Ó Muiré wrote to the solicitor for Templeville in the following terms:
While Philip Smyth was in France, on the 26th March, 2012, acting on an earlier instruction from him, Kieron Flood had walked site with a view to finding differences between the signed map in the mediation agreement and the latest general arrangement of map and he said, among other things: "the underground ESB lines now appear to be running within the site as opposed to along the access road and car parking on the signed map.” Brenda Flood was again placed in an impossible position on the instructions of her employer. It is highly probable that she drew this to his attention during one of the several phone calls that she made reporting general and important affairs to him in France 2 to 3 times a week. Yet, in the correspondence, this is not at all mentioned. Philip Smyth did not claim that it was part of his reasoning for not paying the full rent to Leopardstown on the 15th March, 2012. In terms of what is probable or improbable the situation as it ostensibly developed rules out any acceptance of his evidence. He claims that on June 14th, 2012, he walked the site and noticed blue lines. This happened only by accident, he says, because there was a race meeting on and he was stopped at the Carrickmines car park, which is a pleasant walk in good weather from Dome 2. He claims to have telephoned, through Brenda Flood, Kieran Flood and to have been surprised that there was a transverse ESB cable which might compromise the number of courts that he could put on that site. Kieran Flood described a recollection of Philip Smyth being apparently surprised. Brenda Flood had little recollection of the event. The next day the letter claiming termination for fundamental breach of contract went out. It, however, has no mention of the cable. If there was a horrible surprise, this was the time to mention it. Not until the 20th July, 2012, was the cable referenced in correspondence among a number of points of difficulty as to the site of the seven tennis courts. In the meantime, a letter of the 20th June, complained of a rainy 14th June, race day with only four cars in the Dome 2 carpark, rubbish, a forklift and security barriers. This, in comparison, would be trivial stuff. I regret that I cannot accept any evidence that the cable was first discovered on the 14th June, 2012. Nor can I accept that Ian Roberts acted dishonestly, or gave untruthful evidence, or that there was any kind of sharp practice by Leopardstown, or that Templeville made a mistake or that any misrepresentation of any kind was made by Leopardstown. Although it is not essential to this decision, which would have been made in the absence of this principle, the failure by the defendants Templeville and Philip Smyth to call Brendan O'Sullivan makes it reasonable to independently reject this evidence. Failure to call evidence Laffoy J. has analysed this matter in Fyffes PLC v. DCC PLC and Others [2009] 2 IR 417:
(a) Kyran McLaughlin, a senior executive in Davy, whom it was contended was a critical witness in relation to the dealing issue and whose involvement will be outlined later, and (b) two of the non-executive directors of DCC, the chairman, Mr. Spain, and Mr. Gallagher, and two of the Dutch directors of Lotus Green, Gerard Jansen Venneboer and Henri Roskam, in relation what was characterised as Mr. Flavin’s direct and controlling involvement in the share deals. While the plaintiff did not cite any authority of a court of this jurisdiction in support of its argument, it did rely on a number of English authorities, which it is necessary to consider in some depth in order to ascertain whether they support the proposition advanced by the plaintiff. The earliest authority cited by the plaintiff was M’Queen v. Great Western Railway Company [1875] L.R. 10 Q.B. 569. The plaintiff in that case sued for the value of a parcel of drawings which he had entrusted to the defendant railway company for delivery. The goods never reached their destination, having been stolen while in the custody of the defendant. The defendant pleaded a defence under the Carriers Act. The plaintiff responded that the defence was not available because the goods were lost by reason of having been taken feloniously by the servants of the carrier. The trial judge directed the jury that, if the facts, in their opinion, were more consistent with the guilt of the defendant’s servants than with that of any other person not in their employ, that was sufficient to call upon the defendants for an answer, which not having been given, the inference might well be that a felony had been committed by some of the defendant’s servants. It was held that the direction was wrong and that the jury’s verdict in favour of the plaintiff was wrong. The principle relied on by the plaintiff is contained in the following passage of the judgment of Cockburn C.J., who, coincidentally, had been the trial judge, at p. 574: “If a prima facie case is made out, capable of being displaced, and if the party against whom it is established might by calling particular witnesses and producing particular evidence displace that prima facie case, and he omits to adduce that evidence, then the inference fairly arises, as a matter of inference for the jury and not as a matter of legal presumption, that the absence of that evidence is to be accounted for by the fact that even if it were adduced it would not disprove the prima facie case. But that always presupposes that a prima facie case has been established; and unless we can see our way clearly to the conclusion that a prima facie case has been established, the omission to call witnesses who might have been called on the part of the defendant amounts to nothing.” It was held that a prima facie case had not been made out that the defendant’s servants, rather than somebody else, had stolen the goods. All that had been established was that the defendant’s servants had a greater opportunity of committing the theft. In Reg. v. IRC, ex p. Coombs & Co. [1991] 2 A.C. 283, the issue was whether a notice under the taxation code issued by the Inland Revenue to a firm of stockbrokers to deliver or make available for inspection documents in their possession relevant to the tax liability of a taxpayer, a former employee, in connection with various named companies should be quashed. Against the background of a presumption of validity and having noted the sparseness of the evidence adduced by the IRC, Lord Lowry, with whom the other Law Lords agreed, stated as follows at p. 300: “In our legal system generally, the silence of one party in face of the other party’s evidence may convert that evidence into proof in relation to matters which are, or are likely to be, within the knowledge of the silent party and about which that party could be expected to give evidence. Thus, depending on the circumstances, a prima facie case may become a strong or even an overwhelming case. But, if the silent party’s failure to give evidence (or to give the necessary evidence) can be credibly explained, even if not entirely justified, the effect of his silence in favour of the other party, may be either reduced or nullified.” The IRC had relied on their general duty of confidentiality as a justification for their reticence. Lord Lowry accepted that, by reason of the principle of confidentiality, the general rule for taking account of a party’s silence did not fully apply. The earlier authorities were reviewed by the Court of Appeal in Wisniewski v. Central Manchester Health Authority [1998] Lloyd’s Reports Med. 223. Brooks L.J. summarised their effect in the following passage from his judgment: “From this line of authority I derive the following principles in the context of the present case: (1) In certain circumstances the court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action. (2) If a court is willing to draw such inferences they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call witnesses. (3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue. (4) If the reason for the witness’s absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.” That case which concerned a claim on behalf of an infant who suffered irreversible brain damage before birth in the defendants’ hospital, which it was alleged was caused by negligence of the defendants, illustrates the application of the foregoing principles. The trial judge had held that the defendants were negligent, in that the senior house officer should have attended and examined the plaintiff’s mother about two hours before the birth. That led to an issue on causation, which turned on what the senior house officer would probably have done if he had attended the mother, read her notes and seen the cardiotachograph trace and, in particular, whether a Caesarean section would have been performed at that stage, which would have prevented the injury which was caused because, as the baby moved down the birth canal, the umbilical cord was wrapped around his neck and had a knot in it and he was effectively being strangled. The senior house officer, who was living in Australia, was not called, nor was the registrar who had been on call that night, nor the consultant with overall responsibility for the obstetrics unit. On an analysis of the evidence, Brookes L.J. identified the evidence on the issue as to what the senior house officer would have done which was adduced by the plaintiff as the evidence of two expert witnesses (whose evidence conflicted with the evidence of two expert witnesses called on behalf of the defendants) and certain text book references. The Court of Appeal held that the trial judge was entitled to adopt the course he chose to adopt, which was to infer from the failure of the senior house officer to attend the trial that he had no answer to the criticism made and to find that he would have done what the plaintiff’s expert witnesses testified should have been done and that he would have proceeded to a Caesarean section. The Court of Appeal found that the plaintiff had established a prima facie, if weak, case as to what a doctor would have done in the hypothetical situation the court was required to envisage. The trial judge was entitled to treat the absence of the senior house officer, in the face of a charge that his negligence had been causative of the catastrophe which had befallen the plaintiff, as strengthening the case against him on that issue. The court was referred to three recent decisions of the English High Court in which the application of the principles set out by Brooks L.J. in the Wisniewski case was considered: Pedley v. Avon Insurance [2003] EWHC 2007; Rock Nominees v. RCO Holdings [2003] 2 B.C.L.C. 493; and Lewis v. Eliades (No. 4) [2005] EWHC 488 (Unreported, England and Wales, High Court, Smith J., 23rd March, 2003). Having considered the judgments in those cases, I am of the view that decisions made in the last two cases to draw adverse inferences because of the failure to call witnesses turned very much on the facts of those cases. While, as I have already stated, the plaintiff did not point to any Irish authority in which the basis on which adverse inferences may be drawn from the absence or silence of a witness whose evidence might be expected to be critical to an issue arose, I have no doubt that in practice, in the course of fact finding, judges do draw adverse inferences in such circumstances. The type of situation I have in mind arose in one of the earlier authorities considered in the Wisniewski: Herrington v. British Railways Board [1972] AC 877. Where an issue arises as to whether an adverse inference should be drawn, I consider that the principles outlined in Wisniewski are helpful guidelines for the court. I regard the absence of Brendan O'Sullivan as a witness is fatal to the claim of surprise and misrepresentation made by Templeville and Philip Smyth. That determination is independent of the decision that I have already made on this issue by reference solely to the likelihood or otherwise of the evidence presented in testimony. Mistake
There is a category of cases in which it is accepted that there was an offer and acceptance reached between the parties but in which it is claimed that the parties shared a common mistake which has resulted in the agreement being void. For example, where both parties agree on the purchase and sale of a painting believing it to be a Gainsborough and it is subsequently established that this is not so, or where both parties agree on the sale of tenanted property and both believe that the tenant is affected by the Rent Restrictions Act and subsequently ascertain that this is not so…’
(i) The law ought to uphold rather than destroy apparent contracts. (ii) The common law rules as to a mistake regarding the quality of the subject matter are designed to cope with the impact of unexpected and wholly exceptional circumstances on apparent contracts. (iii) In order to attract legal consequences the mistake must substantially be shared by both parties and must relate to the facts as they existed at the time the contract was made. (iv) The mistake must render the subject matter of the contract essentially and radically different from the subject matter which the parties believed to exist. (v) The mistake must not consist of a belief which is entertained by a party without any grounds for such belief. The third category, unilateral mistake, may occur where one of the parties is mistaken as to some element of the agreement. This does not automatically render an agreement void: more is needed, such as an exploitation of that mistake by the other party. McDermott states:
“…a party who has entered into a written contract under a serious mistake about its content in relation to a fundamental term will be entitled in equity to an order rescinding the contract if the other party is aware that circumstances exist which indicate that the first party is entering the contract under some serious mistake or misapprehension about either the content or subject matter of that term and deliberately sets out to ensure that the first party does not become aware of the existence of his mistake or misapprehension.
Breach of contract The doctrine of fundamental breach of contract was developed to ensure that exclusion clauses which limited or excluded liability for breach could not be so wide as to deprive the innocent party of any redress under the contract. Two propositions were blurred. The first was that, by a rule of law, no excluding or limiting term was given force and effect by the courts in a context which ensured that an innocent party would be protected from any consequence that a party that had perpetrated a fundamental breach of contract would be able to sidestep obligations under the agreement. Secondly, in contrast to a rule of law, the interpretive power of the court would generally exclude all but the clearest cases, backed up by plain wording in unambiguous language, whereby liability could be denied notwithstanding that the contract had in an important, or fundamental sense, not been performed. With the passing of the Sale of Goods and Supply of Services Act 1980, particularly s.22, resort to fundamental breach, or even to fundamental frustrating breach, a further development of the doctrine, has been rendered unnecessary where the parties deal one with the other as a consumer or, in other jurisdictions, through unfair contract terms legislation. The law has, similarly, modernised with regard to the old distinction between breaches of terms and breaches of condition but this has been done not by statute but through judicial reordering of the applicable case law. It used to be that a breach of a term would not entitle the innocent party to give notice of termination of contract but that party would be required to perform the contract and be left to a remedy solely in damages. A breach of condition, on the other hand, was more serious and entitled the innocent party to bring the contract to an end and claim damages based upon the loss suffered and what would be quantifiable as the benefit of the contract had it been properly performed. Some earlier written forms of contract had been scrupulous as to classifying particular obligations as either terms or conditions and in setting out preconditions on the exercise of the parties’ entitlements thereby. Such clarity is admirable; and it is possible where people sit down with lawyers and think of every foreseeable event and provide for what is to happen should one come to pass. But it is unlikely. Human affairs and the use of language as a necessarily imprecise instrument pointed up this approach as both excessive and unlikely to yield clear results. What matters, as a principle of ordinary commonsense, is how serious any breach of contract is and whether on the basis of the parties mutual rights and obligations it can be classified as so striking at the heart of what the innocent party was to expect under the agreement as to entitle that party to bring the contract to an end. The modern law as to how serious a breach of contract must be to justify the innocent party bringing an agreement to an end and seeking damages was considered by Costello J. in Irish Telephone Rentals v. ICS Building Society [1992[ 2 I.R. 525. The plaintiff had rented to a financial institution a telephone system which was impossible to use and which caused astonishing delays in those seeking to access the business from outside due to the backing up of calls blocked within the system. The defendant counterclaimed for damages on the basis that it was entitled not to pay the rental for a system which did not do the job that any reasonable person would have expected it to. The comments of Costello J. are instructive:
There may be many cases in which the court, when presented with a problem of this sort, may be required to consider whether the term which was broken was ‘a condition’ or a ‘warranty’ or, a ‘fundamental term’ of the contract but, as the frequently cited case of Hong Kong Fir Shipping Co. Ltd v Kawasaki Kisen Kaisha Limited [1962] 1 Q.B. 26 shows, this is by no means a necessary exercise to be undertaken in every case. I think the approach suggested by the judgment of Diplock L.J. at pages 65 and 66 of the report is appropriate to this case. In answer to the question ‘In what event will a party be relieved of his undertaking to do that which he has agreed to do but has not yet done?’ he said:- “The contract may itself expressly define some of these events, as in the cancellation clause in a charter party; but, human prescience being limited, it seldom does so exhaustively and often fails to do so at all. In some classes of contract such as sale of goods, marine insurance, contracts of affreightment, evidenced by Bills of Lading and those between parties to Bills of Exchange, parliament has defined by statute some of the events not provided for expressly in individual contracts of that class; but where an event occurs the occurrence of which neither the parties nor parliament have expressly stated will discharge one of the parties from further performance of his undertakings, it is for the court to determine whether the event has this effect or not. The test whether an event has this effect or not has been stated in a number of metaphors all of which I think amount to the same thing: does the occurrence of the event deprive the party who has further undertakings still to perform of substantially the whole benefit which it was the intention of the parties as expressed in the contract that he should obtain as the consideration for performing those undertakings?” If this question is posed in this case there can be only one answer to it. The ‘event’ which occurred in this case is the development of a situation in which the installation which the defendants had hired significantly failed to fulfil its purpose. This ‘event’ has deprived the defendant of the whole of the benefit which it was intended the defendant would obtain from the hiring agreements. The defendant was therefore, in my opinion, discharged from further performing the hiring agreements and was entitled to treat the contract as being at an end and request the plaintiff to take back its installations. It follows therefore that the plaintiffs are not entitled to rely on clause 11 of the contract and that its claim for damages for breach of the hiring contracts relating to the telephone installations also fails. Posing the test as to whether there has been a breach of obligation by Leopardstown which is so serious as to entitle Templeville and Philip Smyth to bring the mediation service agreement to an end, I conclude that there is evidence of some minor lack of attention by Leopardstown and nothing more than that. Most of the problems that have arisen could have been easily sorted out. They were not sorted out because Templeville, under the direction of Philip Smyth, retreated with no reasonable cause into an entrenched attitude of exploiting every grievance and storing up resentment under the misplaced belief that it could provide evidence of serious breach of contract in a later legal case. There is no tenable evidence of misbehaviour under the mediation settlement agreement by Leopardstown. On the other hand, Templeville has demonstrated no commitment to the mediation settlement agreement. The agreement was carefully worked out. It could have operated to the benefit of both parties. Instead of that, the attitude of Templeville has been one of non cooperation from the outset. While it is true that there have been a number of lapses from the obligations of Leopardstown, these are entirely minor. Any reasonable assessment of the evidence presented would indicate that had Templeville kept open the channel of communication that was vaguely present like a ray of sunshine on a wet December day, from the end of 2011 into 2012, there was more than sufficient goodwill on the part of Leopardstown to allow the parties to work together. Instead of that, the attitude of Templeville has been one of seeking to vacuum up the least grievance with a view to litigation, a lack of any reasoned response through communication as to its difficulties and the justification of the destruction of property, the non-payment of sums due and the invasion of rights of realty through subterfuge. Even had everything that Templeville claims to have gone wrong with the mediation settlement agreement been proved in evidence, and that has not happened, the substance of what Templeville had bargained for was available to them. On the other side of the contract, Leopardstown have been deprived of substantial money and has had the unpleasantness of dealing with a company directed away from plain dealing. It is clear that Templeville has not been deprived of the substantial benefit of the mediation settlement agreement. Sums outstanding
Whether it was in respect of arrears, or was somehow otherwise apportioned to outstanding obligations, the obligations as to payment under the mediation settlement agreement cannot be re-written. Under clause 14 of the mediation settlement agreement, Templeville was to pay Leopardstown the sum of €4,090,000 in two tranches: the first being €2.5 million by the 10th November, 2011, and the second, taking into account the release of €90,000 held jointly between the parties, being €1.5 million was to be paid on or before the 10th August, 2012. The first tranche was paid, I imagine but do not know because I was not told that the €90,000 was also released to Leopardstown, but the second tranche of €1.5 million was never paid. Clause 14.2 of the mediation settlement agreement provided that in the event that Templeville should default on either of the payments it consented to Leopardstown marking judgement against it. Philip Smyth agreed that such a default would require him to pay within seven days thereof any amount then due up to a maximum of €1.5 million, with no extension of time. These obligations have been badly defaulted on by Templeville and by Philip Smyth. Therefore, in accordance with the mediation settlement agreement, Leopardstown are entitled to judgement as against Templeville and as against Philip Smyth, as guarantor. There is no dispute as to the manner of calculating interest on rent or the service charge. The sum outstanding in respect of rent and service charge and the interest thereon amounts to €688,793.11. Together with the sum outstanding as of the 10th August, 2012, of €1.5 million, the sum due as of the 30th April, 2013, is €2,188,793.11. There will be judgment in that amount as against Templeville. As to any further sum outstanding that will be adjusted as of the date of judgment hereof. There will be judgment as against Philip Smyth in the amount of €1.5 million. Forfeiture and relief against forfeiture Templeville must be restructured. At least two new directors need to be brought in from outside the sphere of influence of Philip Smyth. There have been deliberate breaches of the mediation settlement agreement. There has been a lack of objectivity on the part of Philip Smyth. There has been the direction of Templeville in a manner not entirely beneficial to the corporation by him. This is all deeply regrettable. Philip Smyth is a determined businessman who has made a truly valuable contribution to Irish life. It is not for the court to exercise personal judgements beyond recognising that his exceptional qualities of concentration and attention to detail are perhaps the origin of some of the unfortunate decisions made through the agency of Templeville. A corporation cannot be the agent of one of its directors. No neighbour should have to put up with the conduct evident in this case from Templeville. The court would have no hesitation in ordering forfeiture of the 1998 lease but for the fact that the intelligent and sensible direction of Brenda Flood and of her colleagues as directors offer a final chance. The court would order forfeiture in this case were only Philip Smyth involved as lessee. But he is not even the lessee. He is a party to the mediation settlement agreement and he is the guarantor under the relevant lease. In Campus and Stadium Development Ltd v. Dublin Waterworld Ltd [2006] IEHC 200 (Unreported, High Court, 21st March, 2006), Gilligan J. set out that the equitable nature of relief against the legal remedy of forfeiture. Relief in equity, following that judgment, should be approached thus:
I would be compelled otherwise to refuse relief against forfeiture. There is no comprehension on the part of Templeville of the solemnity of an agreement arrived at through a process of considerable care and much expense. An attitude of non-cooperation and the seeking out of grievances does not show an attitude which would enable any agreement to work. I will give time to Templeville to consider giving a solemn undertaking to the court. Absent an undertaking in the terms indicated, the approach I must take is clear. Conclusion |