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THE HIGH COURT

[2019] IEHC 829

[2018/5402 P.]

BETWEEN

RAY GREHAN, DANNY GREHAN AND

GLENKERRIN HOMES UNLIMITED COMPANY (IN RECEIVERSHIP)

MICHAEL MCATEER AND PAUL MCCANN

PLAINTIFFS

AND

MAYNOOTH BUSINESS CAMPUS OWNER’S MANAGEMENT COMPANY LIMITED BY

GUARANTEE

DEFENDANT

JUDGMENT of Mr. Justice Robert Haughton delivered on the 22nd day of November,

2019

Introduction

1. These proceedings, as they have evolved, now require the court as its primary task to

rule on whether the obligation to carry out repairs to a defective surface and underground

carpark in Maynooth Business Campus (“the Campus”) falls on the plaintiffs as

owners/developers/receivers, or the defendant management company. The Campus is a

largely completed commercial business campus with light industrial units and office

accommodation. While certain issues of fact fall to be determined, particularly in relation

to the nature and extent of the defects in the carpark, and in relation to the context and

circumstances in which an agreement between the developers and the management

company was entered into, many of the salient facts are undisputed and the primary task

of the court relates to construing that agreement and determining the obligations of the

parties arising from that agreement and related conveyancing documentation.

The Parties

2. The first and second named plaintiffs are businessmen who have been involved in

property development from 1989. They acquired the property on which the Campus was

later developed, and title to the common areas are still vested in them. The first and

second named plaintiffs have a track record of developing five or six large multi-

use/mixed-use developments with common areas, including carparks, and the

involvement in those developments of management companies. These included Glen

Royal Centre in Maynooth, a mixed retail, hotel, leisure and department development, St.

Wolstan’s Abbey in Celbridge, and developments in Ballinteer, Dundrum, the Grange in

Blackrock, St. Edmund’s in Lucan, Alder Park Court in Tallaght, and Friary Gate in Naas.

3. The third named plaintiff (“Glenkerrin” or “the developer”) is an unlimited company with

its registered office at Unit J1 in the Campus. It is a company formed by the first and

second named plaintiffs, for the purpose of developing the Campus. The first and second

named plaintiffs were directors of Glenkerrin, but all three ceased to have involvement in

the development of the Campus when Glenkerrin went into receivership on 3rd May,

2011.

4. The fourth and fifth named plaintiffs (“the Receivers”) are insolvency practitioners in the

firm of Grant Thornton. By Deed of Appointment dated 3rd May, 2011 the Receivers were

appointed by the National Asset Management Agency (NAMA) as joint statutory receivers

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in respect inter alia of the first second and third named plaintiffs’ indebtedness owed to

and securities held by Allied Irish Banks plc (“AIB”), all of which were acquired by NAMA

pursuant to the NAMA Act, 2009. These securities included the lands upon which the

Campus is situate, being described in Folio KE34112F, and a debenture over the

undertakings of Glenkerrin.

5. The defendant (the “Management Company”) is a company limited by guarantee, having

its registered office at Unit F4 in the Campus. It was incorporated by the first and second

named plaintiffs inter alia for the purposes of being the Management Company in respect

of the Campus. The unit holders in the Campus are all members of the Management

Company.

Background facts and relevant documentation

6. The first and second named plaintiffs acquired the Campus lands, then comprising Folio

15989F of the Register County Kildare, from one Francis Brady, on 1st September, 2000,

with funds provided by AIB. The Campus lands were later registered in Folio 34112F.

7. By Deed of Mortgage also dated 1st September, 2000 the first and second named

plaintiffs mortgaged the Campus lands to AIB. The Mortgage is in standard form and

includes –

(1) a covenant on demand to pay to AIB all monies due (Clause 3.01).

(2) a covenant by the mortgagors to keep the property in good and substantial repair

and to complete the construction of partially constructed buildings hereon to the

satisfaction of AIB and to permit its servants or agents and workman to enter the

property and examine its condition and make good defects, and at the cost of the

mortgagors to remedy defects (Clause 7.01).

(3) a covenant “not to do or cause or permit to be done anything which might in

anyway depreciate jeopardise or otherwise prejudice a value to the Bank of the

security hereby created” (Clause 7.01(i)).

(4) Clause 8 conferring on AIB the statutory powers conferred on mortgagees by the

Conveyancing Acts, including the power to appoint a receiver who “…shall be

deemed to be the agent of the Mortgagor and the Mortgagor shall be solely

responsible for the acts and defaults of such receiver and for his remuneration and

the Bank shall not under any circumstances be answerable for any loss or

misapplication of the rents and profits of the mortgage property or any part

thereof…” (Clause 8.01(d))

(5) agreement that the mortgage is a continuing security (Clause 9.02), and “…is in

addition to and not in substitution for any other remedy lien security or securities or

which may hereafter be held by the Bank for the secured monies or any of them…

(Clause 9.03).

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8. On 6th April, 2001 the first and second named defendants contracted to sell the lands

upon which the Campus was developed to Glenkerrin for IR£12m. The development of

the Campus was to be undertaken by Glenkerrin, using funding obtained by the first,

second and third named plaintiffs from AIB. Early in the process the defendant

Management Company was incorporated. The plan was that Glenkerrin would complete

the development, to include the common areas (including the carpark in question), and as

each unit was completed it would be transferred by way of long lease (999 years) to the

purchaser. Upon the sale of the last unit the common areas would then be transferred to

the Management Company.

The Management Agreement

9. In order to effect this scheme, the Management Agreement which falls to be construed in

these proceedings was entered into. This was prepared by Mr. Damien Maguire, solicitor,

based on a precedent conveyancing document. He described it as “an essential

component of the title as it imposed a legal obligation on the Developer that, on its

completion of the development and the sale of the last unit, it would transfer the Estate

Common Areas …. to the Management Company which was also a party to each

purchaser’s title by way of an additional document entitled a Lease of Easements” (his

Witness Statement, para.3). As was accepted conveyancing practice at that time his firm

acted for all three parties to the Management Agreement. His partner Ms. Elaine O’Keeffe

was also involved in taking instructions at the time, and is also a witness to execution of

the Agreement by Glenkerrin.

10. It is an “Agreement for Sale” made the 6th day of April, 2001 between Ray Grehan and

Danny Grehan as “the Vendors”, Glenkerrin Homes Limited as “the Developer”, and

Maynooth Business Campus Management Limited as “the Purchaser” (“the Management

Agreement”). It has been variously described in these proceedings as an “agreement for

transfer of the common areas”, abbreviated to “ATCA”, or the “Management Agreement”.

The latter term will be used for convenience although “agreement to transfer the common

areas” may better describe its purpose.

11. It is necessary to refer to certain of the definitions, and recitals as well as the operative

parts of the Management Agreement: -

“Clause 1.1 – this defines “the estate” to include all the property comprised in Folio

34112F i.e. the Campus lands.

Clause 1.3 – the “Sites” is defined to mean “the individual site sold or leased or

intended to be sold or leased to any purchaser/lessee”.

Clause 1.4 – “The Estate Common Areas” means “the part of the Estate not

included in the Leased Sites and described in the First Schedule.”

It is common case that “the Estate Common Areas” includes the carpark the condition of

which is in issue.

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“Clause 1.5 – “Estate Service Charge” means “the aggregate costs, expenses and

outgoings paid, incurred or to be paid or incurred by the Developer in discharging

its obligations under the Fourth Schedule Part 1 of the Management Agreement”.

This is a reference to the service charges which will fall to be discharged by the Developer

under Leases of Easements to be concluded with each unit purchaser/lessee. In this

regard it was common case the reference to “Management Agreement” in this and

subsequent clauses is a reference to Leases of Easements, in the form of a draft prepared

by Mr. Maguire/Ms. O’Keeffe prior to the execution of this agreement, and intended to be

entered into by all Campus unit purchasers – although this is a subject that will be

addressed in more detail in this judgment.

The Recitals and operative part then read as follows: -

“2. WHEREAS:-

2.1 The Developer has entered into an Agreement with the Vendor to purchase

all of the property comprised within Folio 34112F of the Register County

Kildare of which the Vendor is the registered owner.

2.2 The Developer has laid out the Estate for development as a commercial

business Campus and intends to lease sites in the Estate to prospective

purchasers and to enter into leases and Management Agreements similar in

form to the draft Lease and Management Agreement furnished prior to the

execution of this Agreement or on such other terms as may be agreed

between the Developer and prospective purchasers or lessees.

2.3 The Developer will complete the development of the Estate in accordance

with the plans and specifications produced to the Purchaser and shall lease all

the units/sites on the estate and on the demise of the last Unit/Site,

3. IT IS HEREBY AGREED

3.1 that in consideration of the Purchaser assuming the Developer’s liability

under the Leases hereinafter mentioned and further in consideration of the

sum of Ten Pounds (IR£10.00) the Vendor as registered owner shall transfer

and the Developer as beneficial owner shall transfer and confirm unto the

Purchaser ALL AND SINGULAR the freehold interest in ALL THAT AND THOSE

that part of the lands comprised within Folio 34112F of the Register County

Kildare more particularly described in the First Schedule hereto, subject to

and with the benefits of the Leases and Management Agreements which are

to be granted by the Developer and subject to the rights of the Purchaser and

its members.

3.2 The transfer will be completed at the expiration of 28 days (twenty eight

days) from the service of a notice requiring completion served by the

Developer’s Solicitor on the Purchaser provided always that the notice will be

served within the Perpetuity Period. Completion will take place at the office of

the Developer’s Solicitor.

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3.3 Pending completion the Developer shall subject to the payment to it of the

estate service charge provided for in the Management Agreement, carry out

all of its obligations contained in the said Management Agreement and on

completion of all services charges whether in credit or in arrears shall be

apportioned as between the Developer and the Management Company as of

the completion date.

3.4 The Developer agrees to comply with the purchasers covenants in the

Management Agreement where the Developer grants short term leases of

part or parts of any of the units on the estate and as the landlord reserves a

vote in the management company and a certificate of membership in the

management company in the name of the Developer shall issue for the

respective units.

3.5 The title of the Developer shall consist of the copy document listed in the

Second Schedule hereto. The Purchaser buys with the full knowledge of the

contents of the document being furnished.

3.6 Notwithstanding that the Estate is in the process of being developed as a

Business par the Developer may alter the development as the Developer sees

fit and there is reserved to the Developer full right and liberty to alter the

Development as the Developer may think fit and reserved to the Developer

full right and liberty to vary the location, layout and extent of the Estate, the

sites on it, the car parking spaces and the Estate Common Areas including

the exclusion of any additional lands. Accordingly, the Developer may make

Lease, assignments, transfers or Assurance of any part or parts of the Estate

free from any conditions or covenants contained in any Lese or Management

Agreement.

3.7 The terms of the General Conditions of Sale (1995 edition) of the Law Society

of Ireland shall where appropriate be deemed to be incorporated in to this

Agreement.

FIRST SCHEDULE

The Estate Common Areas

The roads, paths, car parks, gardens, open spaces, water features, ponds, lakes,

grass, margins, security huts and any other parts of the Estate for which no owner

or lessee is directly responsible.

SECOND SCHEDULE

(The Title)

1. Folio and file plan 34112F County Kildare

2. Copy Agreement for Sale dated the 6th day of April 2001 and made between

Ray Grehan and Danny Grehan and Glenkerrin Homes Limited.”

12. The competing contentions and the court’s decision on the true construction of the

Management Agreement will appear later in this decision, but it is important to note at

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this stage the defendant’s claim that Clause 3.7 has the effect of incorporating into the

Management Agreement the General Conditions of Sale (1995 Edition) of the Law Society

including General Condition 36.

13. On a plain reading of clause 3.7 it is quite clear that General Condition 36 is incorporated

into the Management Agreement, and this was accepted in the evidence given on behalf

of the plaintiffs both by the independent expert conveyancer Mr. Patrick Sweetman called

by the Plaintiff, and by Ms. Orla Higgins, a solicitor in Gartlan Furey being the firm

instructed by the Receivers to draft Contracts and handle sales during the receivership.

General Condition 36

14. Under General Condition 36(a)(1) the vendor warrants: -

“(ii) That all Planning Permissions and Building Bye-Law Approvals required by law for

the development of, or the execution of works on or to the subject property as of

the date of sale, or for any change in the use thereof at that date were obtained

(save in respect of matters of trifling materiality), and that, where implemented,

the conditions thereof and the conditions expressly notified with said Permissions

by any Competent Authority in relation to and specifically addressed to such

development or works were complied with substantially…”

15. Further under General Condition 36(c) the vendor on or prior to completion must furnish

to the purchaser –

“(i) written confirmation from the local authority of compliance with all conditions

involving financial contributions or the furnishing of bonds and –

(ii) “a Certificate or Opinion by an Architect or an Engineer (or other professionally

qualified person competent so to certify or opine) confirming that, in relation to any

such Permission of Approval (other than those referred to in the proviso aforesaid)

the same relates to the subject property; that the development of the subject

property has been carried out in substantial compliance therewith and that all

conditions (other than financial contributions) thereof and all conditions expressly

notified with said Permission by any Competent Authority and specifically directed

to and materially affecting the subject property or any part of the same had been

complied with substantially (and, in the event of the subject property forming part

of a larger development, insofar as was reasonably possible in the context of such a

development).”

16. Finally, General Condition 36(d) provides that: -

“Unless the Special Conditions contain a stipulation to the contrary, the Vendor warrants

in all cases where the provisions of the Building Control Act 1990 or of any Regulations

from time to time may thereunder apply to the design or the development of the subject

property or any part of the same or any activities in connection therewith, but there has

been substantial compliance with the said provisions insofar as they shall have pertained

to such design development or activities and the Vendor shall, on or prior to completion of

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the sale, furnish to the Purchaser a Certificate or Opinion by an Architect or an Engineer

(or other professionally qualified person competent so to certify or opine) confirming such

substantial compliance as aforesaid.”

17. Central to the defendant’s defence and counterclaim is that the condition of the carpark

has always been that it has structural defects such that it could not be certified by

Glenkerrin as substantially complying with the Building Control Act 1990 or any

regulations made thereunder by an architect or engineer, and therefore the plaintiffs

could not comply with General Condition 36 and could not complete the transfer of the

estate common areas in accordance with the Management Agreement. The defendant

contends that as the completion of the Management Agreement is “imminent” the

plaintiffs (or one or more of them) have an obligation to carry out remedial works, and for

that purpose to use monies arising from the sale of the last unit, Block C and the Link

Building.

The Debenture

18. Continuing chronologically, by Deed of Debenture made on 10th December, 2003 the

third named plaintiff as “Developer” covenanted to repay to AIB all “principal monies” at

any time due, owing or payable by the third named plaintiff to AIB, and demised to AIB

property described in the First Part of the First Schedule to AIB to hold for a term of ten

thousand years, and by virtue of Clause 4(e) granted a floating charge as follows: -

“(e) Charges by way of a floating security its book debts and other debts and its

undertaking and all its other property, assets and rights whatsoever and

wheresoever both present and future including those for the time being charged by

way of a specific charge pursuant to the foregoing paragraphs if and to the extent

that such charges as aforesaid fail as specific charges but without prejudice to any

of those specific charges as shall continue to be effective.”

The third named plaintiff gave certain covenants in Clause 8 including –

“(e) Not to do or cause to or permit to be done anything which may in any way

depreciate jeopardise or otherwise adversely affect the value of the legally

mortgaged property, equitably charged property or any of the other assets or

property hereby charged;”

and –

“(j) to use its best endeavours to ensure that no charge, easement, right or other

encumbrances, save those created hereunder, shall be created over or otherwise

come to effect the legally mortgaged property, the equitably charged property or

any of the other property or assets hereby charged”.

Clauses 11-15 conferred powers on AIB, including the power of sale – whether or not a

receiver was appointed. Clause 14 provides –

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“14. Neither the Bank nor any such receiver shall in any circumstance, save in the case

of wilful default, either by reason of any entry by it into or by the taking by it of

possession of any of the assets hereby charged to be liable to account as

mortgagee in possession or on any other basis whatsoever in connection therewith

for which a mortgagee in possession may be liable as such.”

It is important to note that this Debenture was entered into after the Management

Agreement.

The Debt

19. By Letter of Sanction dated 8th January, 2009 AIB offered various loan facilities to the

first and second named plaintiff by way of ongoing funding of various developments then

being carried out. The loan amounts in Euro in respect of Loan Accounts 1, 2, 4 and 5

come to approximately €40,000,000. In addition, loan accounts 3, 6 and 7 account for

approximately £35,000,000 Sterling. The security required under this Letter of Sanction

included the Mortgage by the first and second named plaintiffs dated 7th December, 2001

of the Campus site.

20. By Letter of Sanction dated 16th September, 2009 AIB offered loan facilities to the

Glenkerrin under twenty facilities for sums in excess of €180,000,000 in total. As in the

case of the Letter of Sanction of January, 2019 most of these were by way of continuation

or replacement of existing loan facilities between the same parties.

21. The said Letters of Sanction, and the Terms and Conditions applicable to the facilities,

were accepted by the first and second named plaintiffs and Glenkerrin respectively. It is

notable that it was on foot of these facilities, and not any earlier lending, that the

Receivers were ultimately appointed on 3rd May, 2011.

22. Pursuant to the NAMA Act, 2009 the said Facilities, the 2000 Mortgage and the 2003

Debenture were acquired by NALM on or about 9th July, 2010. Such acquisition was

certified pursuant to s.108 of the Act of 2009 by NALM in a Certificate dated 28th

January, 2019.

23. On 29th April, 2011 NALM issued a demand letter to the first and second named plaintiffs

for the sum of €20,385,327.06 pursuant to the Letter of Loan Sanction dated 8th January,

2009. On the same date NALM issued a demand letter to the directors of Glenkerrin for

the sum of €195,664,738.33 pursuant to the Letter of Sanction dated 16th September,

2009.

Appointment of the Receivers

24. By Deed of Appointment dated 3rd May, 2011 NALM appointed the Receivers as joint

statutory Receivers over the assets charged inter alia by the Mortgage and Charge dated

1st September, 2000 in respect of the Campus.

25. By further Deed of Appointment dated 3rd May, 2011 NALM appointed the Receivers to be

joint statutory receivers in respect of the assets comprised in and charged by inter alia

the Mortgage Debenture dated 10th December, 2003 between Glenkerrin and AIB.

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26. On 9th November, 2011 by order of Kelly J. (as he then was) judgment was granted in

the High Court against the first named plaintiff in favour of NALM in the sum of

£269,619,927.87, and against the second named plaintiff in favour of NALM in the sum of

€264,869,326.07.

Unit sales by Receivers

27. When the receivership commenced the Campus was largely developed, and most of the

units had been leased/purchased. Glenkerrin had also developed most of the common

areas. The Receivers were effectively appointed over the following units: -

(i) Block C, an office block adjacent to the carpark, and ‘the Link Building’ (partially

tenanted).

(ii) The undeveloped site for Blocks D and E.

(iii) Block J1 (tenanted).

(iv) Block J5 (tenanted).

(v) Block K6 (tenanted).

(vi) Block K7 (vacant).

(vii) Block K8 (vacant).

These were the units which were secured by the Receivers’ agents. According to the

evidence of Mr. Billy Murphy, a Director in Grant Thornton and the person in the

Receivers’ office most closely connected with the issues arising on the receivership, the

Receivers did not take any steps in respect of the Campus Common Areas as they were

under the control of the defendant at the date of appointment – although, as I find later

in this judgment, this is not strictly correct in respect of the basement of the carpark,

access to which was blocked off. The sale of the site for the future Blocks D and E

completed in November, 2016. The marketing for the sale of Block C and the Link

Building commenced in June 2017. The sale of Unit J5 completed in 2014, while K6, K7,

and K8 were completed in 2018. His evidence was that the sale of Unit J1 was “due to

complete shortly” (his Witness Statement para. 3). His further evidence was that at the

time of appointment the Campus was under the management of the defendant which

looked after upkeep and maintenance of the Common Areas, including the provision of

security, and it appeared to be well maintained.

Leases of Easements

28. Prior to the receivership Campus units were sold off by Glenkerrin after they were

completed. Purchasers/lessees were required to execute an Indenture headed “Lease of

Easements”, the form of which had been furnished prior to entry into the Management

Agreement. A sample Lease of Easments dated 18th January, 2008 made between

Glenkerrin as “Lessor”, the defendant as “Management Company” and Sandwell

Developments Ltd as “Lessee” was put in evidence. It is a lengthy document, the

purpose of which was to ensure that for a term of 999 years the purchaser/lessee would

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be entitled to the benefit of easements over the common areas not covered by buildings,

that they would enjoy specified car parking rights – in Sandwell’s case, 44 spaces - that

they would become members of the Management Company and enjoy the benefit of

services provided by it on the Campus, and that they would be bound to pay estate

service charges levied by the Management Company.

29. It is appropriate to refer to some of the wording of the Lease of Easements, as the parties

emphasise the importance of different parts, and the primary relief sought by the

plaintiffs when these proceedings commenced was an order requiring the defendant to

execute a Lease of Easements to facilitate the sale of Block C and the Link Building. The

scheme of the Sandwell Lease of Easements is evident from some of the recitals and the

main operative part: -

“3.1 The Developer has developed the Estate Common Areas for the amenity and use of

the owners and occupiers of the light industrial units and offices within the Estate

and to this end the Developer has procured the incorporation of the Management

Company, with, inter alia, the object of acquiring the Estate Common Areas and

assuming responsibility for the Estate Services.

3.3 The Lessor and the Management Company have by agreement dated the 6th day of

April 2001 agreed to transfer all their right, title and interest in the Estate to the

Management Company on the completion of the sale of the last unit in the Estate

upon the terms and conditions contained in the said Agreement and subject to and

with the benefit of all leases or licences created by the Lessor in respect of the

Estate. Provided always that where the Lessor shall retain the freehold interest in

any part or parts of the Estate, other than the Estate Common Areas, that these

shall not be included in the Demise to the Management Company and in the event

of the Lessor granting short term commercial leases in respect of such part or parts

of the Estate that the benefit of such leases including all the rents, fines, premiums

and payments thereunder shall be the sole property of the lessor and all matters in

relation to the disposal of such part or parts of the Estate shall be entirely at the

discretion of the Lessor provided that if the Lessor grants short term losses or

retains the freehold of part of the Estate, other than the Estate Common Areas, the

Lessor shall remain liable to the Management Company for the appropriate

proportion of the Estate Service Charge.

3.4 The Lessor further intends that each and every person becoming the owner of a

Unit on the Estate shall become a member of the Management Company other than

lessees of short term leases.

3.5 The Lessee is a member of the Management Company.

3.6 By transfer of even date (hereinafter called “the Transfer”) and executed

immediately before the execution of these presents made between the Lessor of

the first part and the Lessee of the second part, the Lessor assured the Property to

the Lessee for an estate in fee simple in possession free from encumbrances.

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3.7 The Lessor has agreed with the Lessee to join in these presence [sic] for the

purposes of granting to the Lessee the easements rights and privileges set out in

the Second Schedule herein excepting and reserving unto the Lessor the easements

rights and privileges as set out in the Third Schedule herein.

3.8 The Management Company has agreed to join in these presence [sic] as the

beneficial owner of the Estate Common Areas and subject to the payment by the

Lessee of the Lessee’s share of the Estate Service Charge as herein defined and

further subject to the performance and observance by the Lessee of the obligations,

covenants and conditions on the part of the Lessee more particularly set out in the

Fourth Schedule hereto, to perform and observe the obligations covenants and

conditions on the part of the Management Company in relation to the maintenance

and upkeep of the Estate Common Areas as more particularly set out in the Fifth

Schedule hereto.

NOW THIS INDENTURE WITNESSTH AS FOLLOWS:

1. For the consideration appearing in the Transfer and in consideration of the

covenants on the part of the Lessee as hereinafter set out, the Vendor HEREBY

DEMISES and the Management Company HEREBY DEMISES AND CONFIRMS unto

the Lessee ALL THAT AND THOSE the easements, rights and privileges specified in

the Second Schedule hereto EXCEPTING AND RESERVING unto the Lessor and its

assigns and the Management Company the easements, rights and privileges

specified in the Third Schedule hereto TO HOLD the same unto the Lessee from the

18th day of January 2008 for a term of 999 years YIELDING AND PAYING therefore

yearly during the first 10 years of the said term the yearly rent of €1 and

thereafter during the next 20 years of the said term the yearly rent of €1.50 and

thereafter in each succeeding year of the said term the yearly rent of €2, such rent

to be paid in advance on the 1st day of June in each year and the first payment

thereof being a proportionate part of the said yearly rent to be paid on the

execution of these presents together with the Estate Service Charge payable as set

out in the Fourth Schedule, Part 1.

2. The Lessor and Management Company hereby covenant and undertake with the

Lessee to complete the Assurance pursuant to the Agreement for Sale of the

Common Areas as soon as practicable after the sale of the last Unit and in the

event of the Lessor being desirous of retaining any of the Units, the Lessor shall

take an assurance of same as soon as practicable after completion of the sale of the

remainder of the units and in any event within 60 days of same.

3. Notwithstanding that the Estate is in the process of being developed as a

commercial business campus and in the manner hereinbefore recited the Lessor

shall not be under any obligation to complete or cause to be completed such

development or may alter such development (other than the Premises) as the

Lessor may wish…provided however that the Lessor shall have obtained any

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necessary Planning Permission for any such alteration (including alteration by way

of discontinuance of the development) or variation.”

30. The operative parts at clauses 6 and 7 then delineate the obligations of Glenkerrin during

the period of the development of the Campus, and the transfer of obligations to the

defendant as the Management Company on completion of the sale of the estate common

areas to it: -

“6. The Lessor hereby covenants with the Lessee that subject to the Lessee and all

persons deriving title under him as the owner for the time being of the Premises

complying with the covenants, obligations, agreements, stipulations and restrictions

set forth in the Fourth Schedule hereto, that the Lessor until the completion of the

sale of the Estate Common Areas to the Management Company will perform and

observe the covenants, obligations and agreements set out in the Fifth Schedule

hereto provided that on the completion of the sale of the Estate Common Areas to

the Management Company, the liability of the Lessor under this covenant shall

absolutely cease.

7. The Management Company hereby covenants with the Lessee that subject to the

Lessee and all persons deriving title under him as the owner for the time being of

the Premises complying with the covenants, obligations, agreements, stipulations

and restrictions set forth in the Fourth Schedule hereto, the Management Company

on and from the completion of the sale of the Estate Common areas to the

Management Company will perform and observe the covenants, obligations and

agreements set out in the Fifth Schedule hereto and references therein to the lessor

shall as and from the completion of the sale of the Estate Common areas to the

Management Company be deemed to be references to the Management Company.”

31. The Second Schedule then sets out the “Easements, Rights and Privileges granted to the

Lessee for the benefit of the premises” and lists the Passage of Services for the lessee,

Support for the Premises, the use of the Estate Common Areas, Rights of Way and, the

most relevant to the present case, Car Parking Spaces, which in the Sandwell Lease of

Easements specified: -

“The exclusive use of 44 car parking spaces, as shown coloured in yellow on Plan

No. 3 next year to, for the sole purpose of use as car parking spaces only and for

no other purpose for the term of this Lease.”

32. The Third Schedule set out the Easements, Rights and Privileges accepted and reserved to

the lessor and the Management Company, and of note is that in respect of Car Parking

Spaces they reserve: -

“The full right and liberty for the Lessor/Management Company at any time on

giving written notice to the Lessee to alter or vary the location of the car parking

spaces allocated to the Lessee in the visitor’s car parking areas as marked on the

Page 13 ⇓

map and next to some part of the Estate Common Areas designated by the

Lessor/Management Company for car parking.”

33. The Fourth Schedule sets out the lessee’s covenants including a covenant to pay the

Estate Service Charge, calculated in accordance with Seventh Schedule Part One “to the

lessor or after the transfer of the common areas to the Management Company”.

34. The Fifth Schedule sets out the covenants of “the lessor and after the transfer of the

estate common areas the Management Company”. These include covenant 2.1.3 “to

effect and maintain public liability insurance and employer’s liability insurance in respect

of the estate.”

Covenant 6 headed “Provision of Services” then provides: -

“6. “PROVISION OF SERVICES

Subject to reimbursement by the Lessee of the Estate Service Charge and the

performance and observance of the covenants contained in this Lease, the Lessor

covenants with the Lessee that it will use its best endeavours in accordance with

the principles of good estate management to observe and perform the obligations

set out in Part II of the Seventh Schedule hereto until such time as the freehold

reversion in respect of the Estate Common Areas is transferred to the Management

Company.

The Management Company covenants with the Lessee that subject to the payment

by the Lessee of its share of the Estate Service Charge and the performance and

observance by the Lessee of the covenants and obligations contained in this lease

that it will on the completion of the transfer of the Estate Common Areas pursuant

to the agreement for Sale dated 6th April 2001 and made between the Vendor of

the First Part, the Lessor of the Second Part and the Management Company of the

third part that it will at all times thereafter use its best endeavours in accordance

with the principles of good estate management observe and perform the obligations

set out in Part II of the Seventh Schedule herein.”

35. The Seventh Schedule, Part 2 is headed “Estate Services”, and sets out the covenants of

the Lessor and the Management Company to provide certain services, and the opening

part is particularly relevant: -

“The lessor and after the transfer of the Estate Common Areas to the Management

Company, then the management Company covenant with the Lessee: -

1. The Services.

Subject to reimbursement by the Lessee of the Lessee’s Share of the Estate

Service Charge to use all reasonable endeavours to provide the following

services in accordance with the principles of good estate management:

Page 14 ⇓

1.1 As often as may be required to maintain, repair, cleanse and renew the

Estate Common Areas and all Buildings, erections and fixtures on the

Estate Common Areas (if any) including the roads, paths, car parking

areas, pipes, drains, water course, sewers, cabling, wires, and other

conduits for the passage of water, soil, gas, electricity, telephone, radio

and television transmission, heating fuels and other services in under

or passing through the Estate Common Areas.

1.2 To maintain all plants and decorative features within the Estate

Common Areas including the maintenance and landscaping of

appropriate areas to be determined by the lessor or Management

Company subject to the proviso that the Lessee will pay the relevant

proportion of the costs of doing so as part of the Estate Service

Charge.” [Emphasis added]

36. The plaintiffs argued that insofar as the carpark in question required repair or renewal,

this covenant and the words highlighted placed the obligation on the Management

Company. The plaintiffs also relied on the covenant at para. 1.19 of the Seventh

Schedule in support of their argument that the Management Company had an obligation

to execute the Lease of Easements in respect of Block C: -

“1.19 To take reasonable steps to enforce the observance and performance by the owners

of other parts of the Estate/Demised Units of their obligations arising under their

assurances and management deeds and to impose financial penalties on the

owner/Purchases of the premises in particular in relation to the clamping/removal

of authorised and unauthorised vehicles parked in unauthorised areas of the estate

and the removal of waste/rubbish from the Estate Common Areas.”

The plaintiffs also relied on covenant 1.21 in support of the contention that the obligation

to repair/renew the carpark rests with the defendant. The salient part of this reads: -

“1.21 Provision of such sinking or reserve funds as the Lessor/Management Company

may reasonably deem fit for the replacement or renewal of the Estate Common

Areas or any part of them or for the renewal, replacement or purchase of other

capital items, machinery or equipment in the Estate Common Areas…”

37. In addition to being required to execute a Lease of Easements, purchasers were also

required to execute a “Deed of Covenant” with the defendant as “the Management

Company” and “Glenkerrin” as “the developer”. In the case of Sandwell this was also

executed by it on 18th January, 2008. It recites that Glenkerrin is the beneficial owner of

the property in Folio 34112F which it has laid out as a commercial business park, and that

it has developed the Estate Common Areas and: -

“It is intended that the freehold interest in the Estate Common Areas will be

transferred to the Management Company on completion of the sale of the last unit

or office premises subject to and with the benefit of any commercial leases entered

into by the Developer in respect of those units or office premises on the Estate, but

Page 15 ⇓

otherwise free from encumbrances, provided always that the benefit of any short

term commercial leases on any units or office premises retained by the Developer

and any rents payable thereunder shall vest solely the Developer as the case may

be”.

38. It further recites that Sandwell is entitled to be registered as a full owner of the unit that

it is acquiring, and that it “will become a member of the Management Company, and that

as such it has agreed to ‘enter into this Deed of Covenant’”. The operative part consists

of a covenant by Sandwell to bind it and its successors in title to a series of covenants

which are largely reflective of the covenants provided in the Fourth Schedule in the Lease

of Easements.

39. The first and second named plaintiffs were directors of Sandwell Limited. That company

also went into receivership, and was sold on by the Receivers on 9th December, 2013.

40. Subsequent to 3rd May, 2011 the Receivers utilised similar, but not identical, Leases of

Easements and Deeds of Covenant when disposing of Campus Units. The first of these

put in evidence by Ms. Orla Higgins, solicitor in the firm of Gartlan Furey acting for the

Receivers. It was in fact prepared by A&L Goodbody Solicitors in a parallel receivership

concerning the assets of Mr. Ray Grehan, and related to Block B, but it became the

template for further Leases of Easements prepared by Ms. Higgins and utilised by the

Receivers in the disposal of Block C and the other blocks/units listed earlier in this

judgment. The post-2011 Lease of Easements is substantially in the same form as those

utilised by Glenkerrin prior to 2011 but certain differences should be noted. Thus in

respect of the Lease of Easements in respect of Block B, the parties are firstly the first

and second named plaintiffs as “Registered Owners”, secondly “Glenkerrin Homes (in

receivership)” as “lessor”, thirdly the Receivers as “Joint Statutory Receivers”, fourthly

the defendant, and fifthly the purchaser TMT Digital Centre Limited as “lessee”. The

recitals record that: -

“3.1 The Registered Owners are the registered owners of all the estate comprised within

Folio 34112F of the Register County Kildare”

and then sets out similar recitals to those set out in the earlier Leases of Easements,

including recital 3.4 as follows: -

“3.4 The Lessor agreed pursuant to the Management Agreement agreed to transfer all

its right, title and interest in the Estate to the Management Company on the

completion of the sale of the last Unit in the Estate upon the terms and conditions

contained in the Management Agreement and SUBJECT TO and with the benefit of

all leases or licenses created by the Lessor in respect of the Estate PROVIDED

ALWAYS that where the Lessor shall retain the freehold interest in any part or parts

of the Estate, other than the Estate Common Areas, these shall not be included in

the transfer to the Management Company and FURTHER PROVIDED THAT in the

event of the Lessor granting short term commercial leases in respect of any part of

the Estate, the benefit of such leases including all the rents, fines, premiums and

Page 16 ⇓

payments thereunder shall be the sole property of the Lessor and all matters in

relation to the disposal of such part or parts of the Estate shall be entirely at the

discretion of the Lessor. In the event the Lessor grants short term leases or retains

the freehold of part of the Estate, other than the Estate Common Areas, the Lessor

shall remain liable to the Management Company for an appropriate proportion of

the Estate Service Charge.”

Recitals 3.8 and 3.9 then provide: -

“3.8 The Registered Owners acting by the Joint Statutory Receivers have agreed to join

in these presents as the registered owner of the Estate and for the purpose of

confirming the within demise.

3.9 The Management Company has agreed to join in these presents as Management

Company under the Management Agreement and subject to the payment by the

Lessee of the Lessee’s share of the Estate Service Charge as herein defined and

further subject to the performance and observance by the Lessee of the obligations,

covenants and conditions on the part of the Lessee more particularly set out in the

Fourth Schedule hereto, to perform and observe the obligations covenants and

conditions on the part of the Management Company in relation to the maintenance

and upkeep of the Estate Common Areas as more particularly set out in the Fifth

Schedule hereto.”

41. The operative part then opens: -

“NOW THIS INDENTURE WITNESSETH AS FOLLOWS:

4. For the consideration appearing in the Transfer and in consideration of the

covenants on the part of the Lessee as hereinafter set out, the lessor acting by the

Joint Statutory Receivers HEREBY DEMISES and the Registered Owners acting by

the Joint Statutory Receivers HEREBY DEMISES AND CONFIRMS and the

Management Company HEREBY DEMISES AND CONFIRMS unto the Lessee ALL

THAT AND THOSE the easements, rights and privileges specified in the Second

Schedule hereto EXCEPTING AND RESERVING unto the Registered Owners, the

Lessor and the Management Company (as appropriate), and their respective

undertenant, servants, licensees, agents and invitees to easements, rights and

privileges specified in the Third Schedule hereto TO HOLD the same unto the

Lessee from for a term of 999 years YIELDING AND PAYING therefore yearly during

the first 10 years of the said term the yearly rent of €1 and thereafter during the

next 20 years of the said term the yearly rent of €1.50 and thereafter in each

succeeding year of the said term the yearly rent of €2, such rent to be paid in

advance on the 1st day of June in each year and the first payment thereof being a

proportionate part of the said yearly rent to be paid on the execution of these

presents together with the Estate Service Charge payable as set out in the Fourth

Schedule, Part 1.

Page 17 ⇓

There is also a further section in the operative part headed “Joint Statutory Receivers”,

Clause 15 of which reads: -

“It is hereby expressly agreed and declared that nothing in this Lease will prejudice

or affect the estate, person or properties of the Joint Statutory Receivers who join

in this Lease solely in their capacity as Joint Statutory Receiver aforesaid and not

otherwise.”

In the Second Schedule under the heading “Car parking Spaces” the lessee was granted

“the exclusive use of 212 car parking spaces, as shown delineated in purple and red on

the Plan annexed hereto (the Car Spaces) for identification purposes only, for the sole

purpose of use as car parking spaces only and for no other purpose for the term of the

Lease.”

In the Third Schedule, which sets out the easements rights and privileges accepted and

reserved to the registered owners, the lessor and the management company, Clause 10

in relation to “car parking spaces”, provides: -

“10.1 The full right and liberty for the Lessor/Management Company at any time on

giving written notice to the Lessee to alter or vary the location of the car parking

spaces allocated to the Lessee to some part of the Estate Common Areas

designated by the Lessor/Management Company for car parking.”

42. A Lease of Easements in substantially the same form was prepared by Ms. Higgins in

respect of the disposal of Block C and the Link Building. It is clear therefore, and I so

find, that the Receivers recognised and adopted the Management Agreement, and

enjoyed the benefit of it in carrying out sales, and in providing a good and marketable

title to unit purchasers. In theory the Receivers could have sold a unit without the benefit

of car parking spaces. It is notable that the plaintiffs’ own conveyancing expert Mr.

Sweetman was of the view that Clause 3.6 of the Management Agreement entitled the

developer (and hence the Receivers) “to sell units outside of the management scheme”

(Transcript Day 3 pg. 78 line 17-20, and lines 25-pg. 78 line 2). However the Receivers

chose not to go down that route and elected to rely on the Management Agreement.

43. With regard to Block B and the Link Building, this was originally the subject of a Lease of

Easements dated 2nd May, 2001 made between Glenkerrin, the Defendant and Ray

Grehan, and gave him exclusive use of 212 car parking spaces. Before the completion of

the sale of Block B and the Link Building to TMT (pursuant to Contract of Sale dated 23rd

December, 2014 made between TMT Digital Centre Limited and Martin Ferris as Receiver

over certain assets of Raymond Grehan), the Lease of Easements originally entered into

by Ray Graham and dated 2nd May, 2001 was surrendered and the new Lease of

Easements – being that referred to above – was provided by the Receivers in favour of

TMT.

44. It appears that in pre-contract inquiries on behalf of TMT, Mr. Ferris’s Solicitors A&L

Goodbody confirmed that all 212 spaces were located at surface level, as distinct from

Page 18 ⇓

basement level, in the car park at issue in these proceedings. The position of the car

parking spaces has become contentious, and the subject of correspondence between

TMT’s solicitors Mullany Walsh Maxwells, and Gartlan Furey acting on behalf of the

Receivers. In her witness statement Ms. Higgins states: -

“8. …It appears from the documents reviewed by me that it was at all times intended

that a number of the car spaces to Block B were to be located in the basement car

park. An allocation of surface spaces was included in the Lease of Easements but

same were at all times intended to be allocated on a temporary basis pending

completion/commissioning of the basement carpark. A significant number of

spaces currently allocated to Block B are located on the upper deck of the basement

carpark and I am advised that the same are being utilised by the occupiers of Block

B.”

45. Ms. Higgins presented plans indicating that Block B is currently allocated 118 spaces on

the surface carpark and 94 in the basement. Ms. Higgins was recalled (on Day 3) to give

evidence in relation to correspondence that demonstrates an ongoing dispute as to the

allocation of the carparking, and indeed a threat of litigation. This relates to the disposal

by the Receivers of Blocks D & E to Jomaijo Trading Limited, and that company’s Lease of

Easements dated 29th September, 2016 which includes the right to car parking spaces

shaded on a map attached, which clearly replicate or overlap with some of the car parking

spaces already granted to TMT pursuant to its deed dated 17th February, 2015, and in

particular car parking spaces no.’s 1-94. In the correspondence produced by Ms. Higgins

TMT’s solicitors Mullany Walsh Maxwells state, on 14th January, 2014: -

“It is very clear to us that you have gravely misled Jomaijo, which company now

believes that our Client [TMT – purchasers of Block C] is trespassing on its car

parking spaces when, in fact, due to nothing other than your negligence and

carelessness, the opposite is true.

Further to Jomaijo’s claim of trespass against our Client, it has threatened legal

proceedings as well as practical measures such as clamping and removal of

vehicles.”

Gartlan Furey in their reply on 25th January, 2019 rely on the power to vary the parking

spaces from time to time, and state: -

“It is clearly evident that when your client acquired the property, the intended

allocated spaces for your client in the basement were unavailable. Attached is the

car parking plan which includes spaces at both surface and basement level for Block

B. Our client is completing commissioning works for the basement car park and

written notice will be served upon you when the basement spaces are opened and

available for use. We expect the commissioning works to be finalised in the next

couple of weeks.”

Page 19 ⇓

In response on 6th February, 2019 Mullany Walsh Maxwells Solicitors indicated that their

client would reserve its rights pending the completion of commissioning works for the

basement car park. The last letter produced dated 20th February, 2019 from Mullany

Walsh Maxwells to Gartlan Furey shows the dispute to be ongoing, with litigation still a

possibility.

46. The Contracts for Sale of the sites upon which Blocks D and E were to be constructed

were entered into by the Receivers on 19th April, 2016 with Jomaijo Trading Limited, and

a Lease of Easements substantially similar adopted in respect of Block C was entered into

at closing in 2016. The Second Schedule grants to Jomaijo “the exclusive use of 200 car

parking spaces, as shown coloured in green on Plan no. 2 annexed hereto for

identification purposes only, for the sole purpose of use as car parking spaces only and for

no other purpose for the term of this Lease.” Plan no. 2 identifies 200 car parking spaces

on the surface car park.

47. Also put in evidence was a Deed of Covenant executed by Jomaijo Trading Limited in

respect of the site in purchase upon which Units D and E were to be constructed, and the

same parties, including the Receivers, joined in this deed. It is in similar terms to the

Deeds of Covenant which purchasers were required to execute on the acquisition of units

prior to 3rd May, 2011. It is worth noting that that the first and second named plaintiffs,

and the Receivers, joined in this and the other Deeds of Covenant executed with

purchasers since 3rd May, 2011.

48. I find from the foregoing evidence that because the basement car parking has not been

usable the Receivers/their solicitors in undertaking sales of units have deliberately

allocated more surface parking spaces than originally planned for particular units,

notwithstanding that some of these space have previously been allocated to other

purchasers. I infer from this that there has, at least in the minds of the Receivers and

their advisors, been an imperative or urgent need to commission the basement car

parking so that more permanent allocations could be made that are not overlapping, in

order to avoid litigation. This is reinforced by consideration of the contract for the sale of

Block C/the Link Building.

Block C/ the Link Building and the Carpark

49. The evidence of Ms. Higgins was that in or around May, 2017 Gartlan Furey were

instructed to prepare documents for the sale of Block C (which includes “the Link

Building”). On 20th November, 2017 Gartlan Furey issued the Contract for Sale to Mason

Hayes and Curran Solicitors, acting on behalf of the purchaser, Fine Grain Property

(Ireland) Limited. Subsequently, before the contract was entered into, a draft Lease of

Easements was provided to the defendant on 20th December, 2017 in anticipation of

facilitating the sale of the property. By email dated 2nd February, 2018 Mason Hayes and

Curran emailed Gartlan Furey advising that “Our clients have instructed their technical

team to commence their review of the car park and roof repairs and we expect to

progress to contract exchange once those works are signed off”.

Page 20 ⇓

50. On 15th February, 2018 P. & G. Stack Solicitors acting for the defendant wrote to Gartlan

Furey claiming that there were a number of works which were required to be completed

to the Estate Common Areas, and the Receivers’ confirmation was sought that they would

undertake and attend to all works to the common areas.

51. A Contract for Sale of Block C was entered into with the purchaser on 23rd March, 2018

for €5,210,000, with payment of a deposit of €521,000. In Special Condition 6.2 the

purchaser acknowledged that the Receivers were executing the contract in their capacity

as Receivers “only for the sole purpose of facilitating the acquisition of the Subject

Property to the Purchaser” and acknowledging that neither of the Receivers “nor their

estate shall have any personally liability whatsoever…”.

52. Special Conditions 12 and 13 provided: -

“12. Remedial Works

The Vendor agrees to undertake the following works as soon as possible:

(a) install signage as per the indicative drawings and maps attached at Appendix

(b) undertake drainage works as per the spec set out in the estimate from Gene

Clancy attached at Appendix 2; and

The parties hereby agree that the Vendor’s solicitors shall retain the sum of

€50,000 from the purchase monies which said retention sum can be released to the

Vendor upon email confirmation from WK Nowlan confirming that the works set out

above are completed.

12.2 Purchaser Works

The Vendor hereby permits and agrees to grant to the Purchaser a licence for works

when and if requested by the Purchaser, in the form of Licence for Works at

Appendix 4 hereto, in relation to certain works in the basement car park to include

the installation of fire doors and hoses wheels. The Purchaser agrees upon

completion of these works to furnish evidence of certification to the Vendor.

13. Car Park Allocation

The Vendor agrees that the car parking spaces as per the plans attached hereto at

Appendix 3 and coloured green shall be included in the Lease of Easements to the

Purchaser.”

53. The documentation appended to the Contract for Sale included an estimate from a builder

a Mr. Gene Clancy for carrying out specified works primarily to the “ACO-channels” in the

carpark. On the underground section the breaking out and disposing of the existing 100

linear metres of 100 graded ACO-channel and its replacement with pre-fabricated ACO-

channel was estimated to cost €12,380 plus VAT at 13.5%. On the underground section

Page 21 ⇓

similar works to 40 linear metres of damaged 300 mm deep by 350 mm wide floor

carpark ACO–channel was costed at €11,800 plus VAT at 13.5%. The impression given is

that these are relatively minor works designed to improve the drainage.

54. The sale included 290 car parking spaces, and these were to be allocated as to 172 in the

basement carpark and 118 on the surface level.

55. On 28th March, 2018 a further draft Lease of Easements in respect of Block C was

provided to the defendant.

56. The first written indication from the defendants that there was something more serious

wrong with the carpark came on 10th April, 2018 when Ms. Gemma Stack of P&G Stack

Solicitors for the defendant sent an email to Ms. Higgins in Gartlan Furey in the following

terms: -

“Dear Orla

I am attaching an estimate of the costs in order to finish the common area. I am

advised that the underground carpark for Block C is not fit for purpose. The car

spaces for E & D are currently being used, but clearly this cannot continue when

these blocks are developed.

The Management Company requests that the receiver discharge the costs for

completing the development and I await hearing from you in this regard when you

have taking your clients instructions.

Regards.”

57. The accompanying documentation is from Mr. Seamus Nolan, Chartered Engineer and

Director of NRB Consultant Engineers Limited and consists of a page of “Non Exhaustive

Schedule of Information Requested”, setting out 21 items, and a one-page letter of

estimates signed by Mr. Nowlan. The Schedule commences with the words – “The

following documentation to accompany a written request for taking in charge in order to

determine if services are completed to standard:”, and item 2 reads: -

“2. As–constructed drawings (Paper Copy & AutoCAD) for the completed semi-

basement and deck carpark structure include full structural, servicing, drainage,

lighting, water proofing details etc along with any previous investigations and

reports prepared on the constructed structure, issues identified, remediation

measures identified and costs established for same.”

58. In the accompanying letter Mr. Nowlan states that “as requested, to date we have

undertaken a visual inspection of the common areas to undertake a preliminary review of

works which require completion” and he states that the Schedule of “Information

Required” is prepared to include “all – constructed records, health and safety fire

certifications. We would expect this information to be available for any project of this

nature.”

Page 22 ⇓

59. He goes on to state the following, of relevance to the carpark:

“In the absence of this information at this stage, based on our experience, we have

prepared the budget estimate below to provide an order of magnitude of the costs

expected to complete the common areas. This assumes that the deck carpark

requires remediation work only i.e. that there is no underlying structure failure

issues which is yet to be confirmed. Based on consultations, visual inspections,

reasonably best estimates and our previous experience we give the following

preliminary budget advice:

•

The completion of the underground carpark to the rear of Block A, B & C

would cost in the region of €1m to €2m depending on results of further

detailed investigations and assuming that there are no major structural

issues discovered.”

60. On 16th April, 2018 Gartlan Furey responded saying that “Our client is reviewing your

correspondence” but requesting immediate return of the Lease of Easements duly

executed and stating “your client’s failure to comply with this request could jeopardise the

transaction and will result in our client having no alternative but to consider its rights and

entitlements including, but not limited to, legal action against the management company

…”.

61. On 24th April, 2018 Ms. Higgins emailed to Ms. Stack advising that their client had

“Completed all necessary commissioning works for the basement carpark as were

required. Drainage is not critical to the user of the basement carpark but is being

addressed by the Receiver.

The purchaser of Block C is undertaking its own comprehensive due diligence and is

satisfied to proceed to complete the purchase and permits its tenants and occupiers

Block C to use the carpark.

Given that the commissioning works had been completed, signed off and the

property

acceptable to a purchaser can you please confirm that executed Lease of

Easements

will be returned to us without any delay.”

The more costly and serious remediation work identified by Mr. Nowlan was not

addressed.

62. It is apparent from the accompanying documentation that the “commissioning works”

referred to by Ms. Higgins and which were said to have been completed were those

identified in Mr. Clancy’s estimate attached to the contract of sale i.e. in relation to ACO-

Page 23 ⇓

channel replacement, and the installation of appropriate signage and lighting. A scoping

of these works had been prepared by WK Nowlan for the Receivers on 20th December,

2017 and appears to have been the basis for the works actually carried out by 24th April,

2018. Correspondence between Ms. Higgins and Mason Hayes and Curran for the

purchaser confirmed this to be case. In a letter of 14th March, 2018 Mason Hayes and

Curran also referred to carpark allocation, stating: -

“My client understands that the basement carpark is not yet open. Therefore, the

43 temporary surface spaces provided to LINK [another unit holder] have not yet

been relocated to the basement.

My client requires that prior to completion the basement carpark is opened and

operational and that LINK is notified of same. Please confirm this can be done.

I attach surface and basement carpark allocation map prepared by my client with the

total number of spaces allocated to Block C comprising 290. Please confirm these maps

represented the agreed allocation of spaces in Block C and that this figure of 290 will be

noted in the Lease of Easements and to be granted on completion.”

63. It is clear that following receipt of Mr. Nowlan’s estimate in April 2018 the defendant had

serious concerns about the carpark. As a result J.J. Campbell and Associates Limited,

Consulting Civil and Structural Engineers, was engaged to undertake a fuller examination

and provide a structural report. These concerns were communicated by Ms. Stack to Ms.

Higgins by email of 1st May, 2018, and she advised that “we expect to have the structural

report this week …”. On 3rd May, 2018 Ms. Stack again wrote to Gartlan Furey

emphasising that in no way did the Management Company wish to interfere with or

restrict the entitlement of Receivers in relation to the Campus and the sale of units, but

pointing out that the Management Company was obliged to comply with its obligations to

other users. The letter continues: -

“To this end, in order to fully advise our clients, can you please, as a matter of

urgency, confirm and identify that your clients will comply with its and their

obligations under agreement for sale of the 6th April, 2001, clause 2.3, namely to

complete the development of the estate in accordance with the plans and

specifications then produced. This requires completion of Block C to include the

carpark.

In addition, your clients in the representative capacities of the Developer are

obliged to deal with the common areas and complete the works in accordance with

previously provided schedules.

Whilst of course it is recognised that this takes time, and there are requirements in

relation to the completion of the sale and carpark spaces, it would appear that what

is proposed is a completely different proposition, with no confirmation as whether

or not there will be any completion of the underground carpark. Please refer to the

health and safety concerns in relation to the underground carpark highlighted by

Page 24 ⇓

Seamus Nowlan, Engineer which were furnished to you by email on 1st May, 2018.

As you know we are awaiting a structural Engineer’s Report from John Campbell

Director of JJ Campbell Associates who is a structural engineering expert. We

expect to be in receipt of same very shortly and will furnish a copy to you.

Please confirm whether your clients intend to comply with their obligations in

relation to the balance of the works to be carried out in the common areas or what

proposals, if any, your clients have in this regard. We have sought this information

for considerable period of time and find it unfortunate that deadlines are now being

imposed with threats of litigation against your clients against the backdrop of the

complete and absolute failure to reply”.

64. On 10th May, 2018 Ms. Stack forwarded to Gartlan Furey a copy of the Preliminary

Structural Report of JJ Campbell Associates which they had received that day and which is

dated 3rd May, 2018. At section 2.0 Mr. Campbell describes the structure of the “carpark

suspended deck” as follows:

“The carpark consists of deep hollow core units, probably 400 deep with a structural

concrete screed supported on precast concrete beams and precast concrete

columns. The concrete columns have corbels, we expect that steel dowels

incorporated into the corbels are inset and grouted into the precast beams during

erection of the carpark.

No original structural drawings were available at the time of preparing this report.”

65. He further describes at section 2.1 the “lower carpark slab upgrade” as having “cracking

in various sections were ground water seepages is evident … and they do not appear to

be regular controlled joints in the slab”.

66. In section 3.0 Mr. Campbell recommends that detailed structural investigation be carried

out to the carpark and “this may involve opening up works”. The next sentence reads –

“We expect that the carpark precast concrete deck structure (see Photo No. 2) with

thesurrounding walls is too large to have no thermal expansion joints. The large

thermal forces induced are relieved by the precast units pulling and spalling

concrete of the precast beams (see Photos No. 06, No. 07, and No. 8).

These thermal forces have also pulled down the dowel connections between the

beam and column’s corbels, causing cracking in same (see Photos No. 09 and No.

10).Expansion joins are required in both directions in the precast concrete carpark.

The condition of the ends of the precast hollow-core units and cracked corbels shall

require further scrutiny involving a small opening up.”

67. In section 4 Mr. Campbell recommended further investigation works, but based on this

visual inspection he was of the view that the spalled concrete needed repairing, and that

the cracking in the column’s corbels needed to be investigated further but at a minimum

Page 25 ⇓

needed to be “epoxy injected”. He then states – “putting a cost on the above at this

stage is difficult but in order to give the Client a quantum for budgeting purposes,

structural repairs shall be in the region of €1.5m.”

68. In his Executive Summary he states the following:

“1.1 At the time of preparing this report original structural drawings were not available

to us.

1.2 The pen carpark precast concrete deck is of a considerable size without expansion

joints. The deck is also locked into peripheral concrete walls which further restricts

expansion and contraction thermal movements (See Photo No. 02).

1.3 Cracking is evident in the column corbels supporting the precast concrete beams

(See Photos No. 09 & No. 10).

1.4 Precast hollow core units on the end bays are pulling concrete off the support

beams due to the inbuilt thermal forces being applied in the concrete deck (See

Photos No. 06, No. 07, & No. 08).

1.5 The ongoing spalling concrete shall present an ongoing health and safety risk to the

public should they use the lower floor of the carpark.

1.6 Remedial works are required to relieve these thermal concrete forces. The remedial

works involves introducing expansion joints in the carpark suspended deck together

with injection works to the cracks in the corbels. The spalled concrete area requires

repairs. The details of this are complex and require a number of considerations.

1.7 We must emphasise that the above is based on a walk around inspection of the

deck, without a very detailed inspection and without opening up-works – which may

present further problems.”

69. Gartlan Furey next wrote on 22nd May, 2018, but did not address Mr. Campbell’s report

at all. Instead they indicated that they were instructing Counsel to prepare proceedings,

and allowed a further period of seven days for the execution of Lease of Easements by the

Management Company. In a letter of 23rd May, 2018 Gartlan Furey referred not to Mr.

Campbell’s report but to P. & G. Stack’s letter of 3rd May “in which you mentioned that

your client’s engineer has safety concerns relating to the underground car park”. Gartlan

Furey then state: -

“Please be advised that our client recently commissioned its own survey of the

carpark which confirmed that the structure is stable and that it accords with Grade

1 basement in accordance with BS8102. Any observations as to compliance that

were raised in this survey, have either been attended to, or are in the process of

being attended to.”

Page 26 ⇓

Gartlan Furey did not furnish a copy of the survey obtained for the Receivers, and no

engineer was called on behalf of the plaintiffs to give evidence in this case. The assertion

that the Receivers had an engineering report on stability of the structure was contradicted

by the first witness called by the plaintiffs, Ms. Maura O’Sullivan, the “Team Leader” in

NAMA having “oversight” in respect of this receivership from April 2017, and manager of

one Deidre Barry, who did not give evidence but was the NAMA person dealing mostly

with the Receivers/Grant Thornton. I found Mr. O’Sullivan to be defensive, lacking in

recall, and evasive. Her evidence was that from NAMA’s perspective there was no

structural issue with the car park, Mr. Campbell’s evidence was “speculative” without

further investigation, she had never “personally” seen the structural survey referred to in

Gartlan Furey’s letter, and NAMA had never commissioned a structural survey. Under

cross examination she was referred to a report of Kavanagh Burke Consulting Engineers

prepared for the Receivers in March 2017 ‘Outline Scope of Works for Finishing Works to

Existing Lower Level Car Park’, which she said was not brought to her attention when she

took over as Team Leader a month later. This is not a structural report as such, and

certainly could not be said to have “confirmed that the structure is stable”. On the

contrary it bullet point lists problem areas including –

•

Repair existing concrete beams.

•

Repair existing concrete walls.

•

Seal leaks in existing lower car park level.

•

Repair existing construction joint in existing lower car park RC slab

These references could be interpreted as referable to structural issue, and along with

visual inspection should have alerted the Receivers to the possibility, at least, that there

was a serious structural issue. Ms. O’Sullivan later recalled that W.K. Nowlan were asked

to comment on Mr. Campbell’s reports, but added “Sorry, I don’t know whether that was

in writing or verbalised but I do recall there being some discussion with the Receiver after

he had sought advices on that”. Counsel for the plaintiffs then intervened to say that this

was in the context of the proceedings and “privileged engagements between the solicitors

and relevant clients and experts.”

70. P. & G. Stack responded, in the court’s view quite reasonably, on 31st May, 2018 asking

Gartlan Furey to address the engineering concerns rather than threatening litigation.

To this Gartlan Furey responded on 7th June, 2018 stating: -

“Our client’s position is that your client has no entitlement to impede the sale of the

property at Block C and Link Building…in circumstances where the common areas

have not been transferred to your client. Further, our client is of the view that it is

under no obligation to address the issues raised by you and they certainly do not

form any basis upon which your client can seek to refuse to execute the Lease of

Easements. It is evident that your client is unlawfully taking advantage of the Joint

Page 27 ⇓

Receivers’ requirement to secure a Lease of Easements and leveraging it against

what your client alleges are remedial works required to the common areas. This is

a clear tactical ploy by the management company, is contrary to the management

agreement and will not be tolerated.”

71. The letter went on to state that, without prejudice, the Receivers did not accept that there

were health and safety issues associated with the carpark, and they then went on to deal

with points made in the email from Seamus Nolan of NRB Consulting Engineers Limited of

30th April, 2018. The first, third and eleventh points are relevant: -

“1. Enclosed is the Architects Opinion on Compliance dated 3 October, 2010 which

contains Engineers Certificate. The car park was completed by the developers of

the business campus in/around 2001, several years prior to the non-consensual

appointment of the Joint Receivers. Given the circumstances, and as your client

will be well aware, it is to be expected that the Joint Receivers will have little access

to historical documentation relating to the car park.”

“3. The car park was designed as a Grade 1 basement car park in accordance with BS

8102. In effect, this means that the car park is not expected to be watertight.

Rather, water seepage and damp areas are considered tolerable given its intended

use and do not present a safety issue.”

“11. In terms of the structure, as mentioned in previous correspondence, our clients

have confirmation from their engineer that the car park structure is stable. As also

mentioned in point (3) above, due to the design of the car park, water seepage is

to be expected. As water ingress results in the spalling of concrete cover, it

requires ongoing repair with suitable compounds. There is evidence that such

repairs have been carried out on many occasions during the life of the structure so

far. Similar future repairs will no doubt be required as part of the ongoing

maintenance programme for all of the common areas of the estate.”

Points 4-10 addressed less costly aspects such as the repair of the drainage channel, the

completion of road markings, the completion of stair case and balustrades on the half

landings, warning signage and road markings in respect of the basement ramps, and

lighting. The letter gave the management company until close of business on Friday 8th

June, 2018 to execute the Lease of Easements.

Once again engineer’s report/opinion relied on by Gartlan Furey was not furnished. It is

however apparent from these exchanges that while Mr. Campbell was attributing the

spalling of concrete on beams and corbels to lack of expansion joints – arguably a

structural defect - the Receivers/their engineer were attributing the spalling to

permissible or acceptable ingress of water.

72. Before and after the interlocutory injunction settlement P & G Stack continued to press for

joint engineering inspection and further investigative works. They furnished the Travelers

Insurance report of 3rd August, 2019. By letter dated 24th September, 2018 they pressed

Page 28 ⇓

Gartlan Furey for their engineer’s report, and for joint inspection to narrow the issues and

scope the work required to the car park. On 4th October, 2019 they furnished the

additional report of Mr. Campbell dated 3rd October, 2018 concerning remediation works.

On 22nd October, 2018, shortly before the injunction application was due to proceed,

they responded to an Affidavit of Mr. McCann sworn on 19th October 2019, which

appeared to express willingness for a joint inspection by the parties’ engineers, and they

suggested such a meeting to discuss the defects and scope of remedial work but this was

not taken up. On 16th January, 2019 P & G Stack wrote indicating their instructions were

for the investigative works to proceed, they sought permitted access for this purpose, and

that the Receivers pay half the cost. Gartlan Furey did respond on 24th January, 2019

refusing an “invasive inspection” and adverting to “significant additional costs” and the

need “to retain experts to be present to supervise and report upon such an inspection”.

Under cross examination Ms. O’Sullivan gradually recalled discussions on whether NAMA

would agree to engineering investigative work, and recalled relying on the Receivers’

recommendation that they should not agree to this. On further probing she recalled this

to be the advice of Mr. Billy Murphy rather than either of the Receivers. This led

NAMA/the Receivers to refuse to permit further investigative works.”

73. P. & G. Stack responded on 11th of June stating that the deadline of 8th June was

unrealistic and that they anticipated reverting by the 15th of June. They requested

Gartlan Furey to furnish a copy of their engineer’s report, given that Mr. Campbell’s

Preliminary Structural Report had been furnished to Gartlan Furey on 10th May. Gartlan

Furey responded on 11th June stating that they had “answered all of the queries raised by

you and addressed/responded to the issues identified by your client’s engineer” and they

gave until 2pm on 12th of June to execute the Lease of Easements in default of which

proceedings will be issued. Their engineer’s report was not furnished; moreover, at no

stage did the plaintiffs agree to the further investigative works advised by Mr. Campbell.

Proceedings were then commenced.

The Proceedings

74. The Plenary Summons was issued on 13th June, 2018, and the Statement of Claim is

dated 15th June, 2018. An application to admit the proceedings to the Commercial List

was made on Monday 18th of June. Particulars were raised and responded to promptly,

and Amended Defence and Counterclaim were delivered on 31st October, 2018.

Particulars were raised and replied to and an Amended Reply to Defence and

Counterclaim was delivered on 8th November, 2018, and a reply to Defence to

Counterclaim was delivered on 10th December, 2018. Interrogatories were raised by

both parties on 3rd December, 2018 and duly replied to and discovery was made by the

plaintiffs in January, 2019.

75. By Notice of Motion issued on 5th September, 2018, which came on for hearing before

Barniville J. on 23rd October, 2018, the plaintiffs sought an interlocutory order requiring

the defendant to execute the Lease of Easements and to take all necessary steps to

facilitate the sale of Block C and the Link Building, and further an interlocutory order

prohibiting the defendant from interfering or otherwise obstructing the sale of the

Page 29 ⇓

property to a third party. The Motion was compromised and struck out on consent on

terms ruled before Barniville J. on 24th October, 2018 on the following terms: -

“Without prejudice to the legal position of any party to the proceedings, in exchange for

the execution by the Defendant of the Lease of Easements exhibited at PMC8 to the

Affidavit of Paul McCann of fifth named plaintiff September, 2018, and the Deed of

Covenant and Management Company Members Certificate, the Fourth and Fifth Plaintiffs,

on behalf of all Plaintiffs, will:

1. The Defendant is at liberty to deliver an Amended Defence and Counterclaim within

7 days of the date hereof.

2. The Plaintiffs will not bring an application for security for costs arising on the

Counterclaim.

3. The Fourth and Fifth Plaintiffs will continue as Receivers over the Property pending

delivery of judgment by the High Court in these proceedings provided the hearing

of the action takes place in or before March, 2019.

4. The Plaintiffs will refrain from serving the 28-day notice referred to in paragraph

3.2 of the Management Agreement of 6th April, 2001 pending delivery of the

judgment by the High Court in these proceedings.

5. The Plaintiffs agree to take responsibility for the underground carpark until the trial

of the action.”

The notice referred to at para.3.2 is the Completion Notice that may be served by

Glenkerrin’s solicitors on the defendant requiring completion of the Transfer of the

Common Areas within 28 days.

76. Pursuant to the resolution of the interlocutory application the defendant did execute the

Lease of Easements in respect of Block C and the Link Building. That ultimately enabled

the Receivers to close the sale (although it had not actually closed at the date of trial).

77. During the trial Counsel for the plaintiffs attempted to use the fact of such execution to

argue that it was no longer open to the defendant to assert that it was not obliged in law

to execute the Lease of Easements, or to assert that the obligation to carry out further

remedial work to the carpark rests with the plaintiffs. This was, rightly in my view, not

pursued in closing submissions. I am quite satisfied that the settlement of the

interlocutory application was expressly without prejudice to the legal position of the

defendant, and that the act of execution of the Lease of Easements by the defendant

cannot be taken out of context or in isolation. The defendant is therefore entitled to

assert and argue the legal position with regard to the carpark as if it had not executed the

lease of Easements in respect of Block C and the Link Building.

78. The Statement of Claim recites the history of the borrowing and security, and having

referred to the Management Agreement in para. 10 the plaintiffs plead: -

Page 30 ⇓

“10. The Developer, Glenkerrin developed the Estate Common Areas for the amenity and

use of the owners and occupiers of the Units within the Estate and procured the

incorporation of a Management Company with “inter alia” the object of acquiring

the Estate Common Areas and assuming responsibility for the Estate Services

pursuant to the terms of the Management Agreement.”

The Statement of Claim recites the most relevant terms of the Management Agreement,

and then refers to Clause 3.6, (which allows the Developer to vary the location layout and

extent of the estate and the car parking spaces) and pleads:

“15. Clause 3.6 made it clear that the Developer was entitled to alter or change any part

of the development but in particular the Common Areas as it saw fit and to lease

sites to individual purchasers while the development was still in the process of

being developed. In particular, the Developer was not required to complete any

aspect of the works to the Common Areas by any particular date let alone complete

those works to any stipulated standard or locate any aspect of the facilities at any

particular location. In particular, the Management Agreement does not impose on

the Developer any obligation to complete the Common Areas prior to entering a

lease with any purchaser. Further, Clause 2.3 was expressly conditioned by the

rights of the Developer in Clause 3.6.”

79. The Statement of Claim then pleads the sale by the receivers of Block C, and the refusal

by the defendant to execute the draft Lease of Easements. In para. 19 the plaintiffs

plead: -

“19. The defendant is obliged to execute the Lease of Easements but has unlawfully

refused to execute the draft Lease of Easements despite request. Its conduct in

that regard appears motivated by its desire to force the Plaintiffs to carry out works

in the Common Areas and/or complete the Common Areas in circumstances where

the Defendant has no right to so require. It is refusing to execute the Lease of

Easements in order to exercise commercial leverage on the Plaintiffs in

circumstances where it appears not to be a mark for the losses which the Plaintiffs

are exposed to.”

Particulars were raised. In the Replies to Particulars furnished on behalf of the plaintiffs

in response to query 13 requesting disclosure as required by O. 20, r. 12 of the RSC of

expert evidence the following response appears: -

“13. The plaintiffs propose to offer the expert evidence of

(i) an expert in conveyancing to the effect that the defendant is not entitled to

refuse to execute the Lease of Easements and/or reserve rights over the car

park and

(ii) an engineer and/or surveyor as to the adequacy of the carpark condition and

structure.”

Page 31 ⇓

As previously mentioned, at hearing the plaintiffs did not call any engineering or

surveying expert evidence as to the adequacy of the carpark condition or structure.

Amended defence and counterclaim

80. The gravamen of the defendant’s case is set out in para.s 7.1-7.6: -

“7.1 The Defendant is neither required nor obligated to acquire the Estate Common

Areas until such time as Glenkerrin Homes has completed the development of the

Estate as a business park and the Estate Common Areas therein, in accordance

with the plans and specifications thereof, to a good and workmanlike standard free

from defects and in accordance with the applicable grant of planning permission,

building regulations and standards, and such that the Estate Common Areas do not

pose a health and/or safety risk to occupiers in the Estate or members of the

public.

7.2 The Defendant is neither required nor obligated to assume responsibility for the

Estate Services (an undefined term and in respect of which no admission is made

as to the meaning thereof) until such time as Glenkerrin Homes has completed the

development of the Estate as a business park and the Estate Common Areas

therein, in accordance with the plans and specifications thereof, to a good and

workmanlike standard free from defects and in accordance with the applicable grant

of planning permission, building regulations and standards, and such that the

Estate Common Areas do not pose a health and/or safety risk to occupiers in the

Estate or members of the public.

7.3 The Defendant is neither required nor obligated to assume responsibility for the

Estate Services (an undefined term and in respect of which no admission is made

as to the meaning thereof) until such time as Glenkerrin Homes can transfer to the

Defendant the Estate Common Areas free from any express, implied or contingent

liability attaching thereto whether manifest or latent at the time of transfer, and/or

otherwise to indemnify the Defendant in respect of any such express, implied or

contingent liability attaching to the Estate Common Areas whether manifest or

latent at the time of transfer.

7.4 Properly construed the effect of the Management Agreement is such that Glenkerrin

Homes is under an obligation to develop and complete the Estate, including Estate

Common Areas, in accordance with the plans and specifications thereof, to a good

and workmanlike standard free from defects and in accordance with the applicable

grant of planning permission, building regulars and standards, and such that the

Estate Common Areas do not pose a health and/or safety risk to occupiers in the

Estate or members of the public. To date Glenkerrin Homes has failed, refused or

neglected to discharge its obligations in this regard properly, or at all.

7.5 Properly construed the effect of the Management Agreement is such that Glenkerrin

Homes remains liable for any defects or liabilities arising, howsoever, described,

Page 32 ⇓

pertaining to the Estate Common Areas that were manifest or latent prior to the

transfer of the Estate Common Areas to the Defendant.

7.6 To date, and notwithstanding requests made by or on behalf of the Defendant, the

Plaintiffs, and in particular Glenkerrin Homes, have failed, neglected or refused to

construct and/or repair and/or maintain the Estate Common Areas, specifically the

carpark, in accordance with their obligations. In particular, the carpark is not

properly constructed and/or in need of repair and/or maintenance for the following

reasons.”

The Defence at 7.6.1 – 7.6.14 then sets out the alleged defects with the carpark, which

list inter alia spalling of beams/corbels, cracking of corbel columns, exposure of steel “re-

bar” and “tendons”, cracking and water ingress. Included are the following -

“7.6.11 Owing to the current state of carpark the corrosion and cracking is continuing

and ongoing and likely to further deteriorate. Further, as a result of the foregoing

the risk of local collapse in both the upper and lower car decks shall be a concern in

the next ten years.

7.6.12 In addition, the carpark is presently uninsured, the plaintiffs having failed,

refused or neglected to obtain insurance cover in respect of same, and therefore it

is not suitable for use or occupation. Further, absent to the completion and/or

repair of the carpark in a proper manner it is unlikely that insurance cover will be

obtained at a reasonable or viable premium, or at all.

7.6.13 Pending the carrying out of investigative works, the estimated cost of

remediating the plaintiffs’ default in this regard is €2,258,000, (ex. VAT).”

81. At para. 8.6 the plaintiffs plead:

“8.6 The Plaintiffs, without lawful authority, now seek to compel the Defendant to

execute the Impugned Lease of Easements the effect of which is such that it will

render the Defendant, on acquiring legal title to the Estate Common Areas (which is

anticipated to be imminent), liable for the failure on the part of the Plaintiffs to

construct and/or repair and/or maintain the car park in accordance with their

obligations. In that regard the Plaintiffs seem to impose on the Defendant positive

covenants concerning the maintenance and repair of the carpark in respect of which

the Plaintiffs know the Defendant cannot comply with. Properly construed, the

Management Agreement does not require the Defendant to acquire the Estate

Common Areas or assume responsibility for Estate Services (an undefined term and

in respect of which no admission is made as to the meaning thereof) until such time

as Glenkerrin Homes has completed the development of the Estate as a business

park and the Estate Common Areas therein, in accordance with the plans and

specifications thereof, to a good and workmanlike standard free from defects and in

accordance with the applicable grant of planning permission, building regulations

and standards, and such that the Estate Common Areas do not pose a health

Page 33 ⇓

and/or safety risk to occupiers in the Estate or members of the public. In seeking

to compel the Defendant to execute the Impugned Lease of Easements the

Plaintiffs, and in particular Glenkerrin Homes, are wrongly, and without lawful

authority, seeking to impose on the Defendant a binding liability to third parties to

which it is under no contractual obligation to discharge per the Management

Agreement. In particular, the Plaintiffs wrongly, and without lawful authority, seek

to impose on the Defendant a liability created by the Plaintiffs in respect of which

pending investigative works, it is estimated will cost approximately between

€2,258,000 (ex VAT) to discharge.”

82. At para. 11.4 the defendants’ plead: -

“The Management Agreement, and in particular Clause 3.6 thereof, properly

construed and/or an applied term thereof, is subject to the applicable grant of

planning permission in respect of the Estate and any part thereof, the operable

building regulations and standards, health and safety requirements, good practice

and proper estate management.”

83. At para. 11.5 the defendants go on to plead an implied term requiring the developer to

construct the Estate Common Areas “in accordance with the plans and specifications

thereof, to a good and workmanlike standard free from defects and in accordance with

the applicable grant of planning permission, building regulations and standards, and such

that the estate common areas do not pose a health and/or safety risk or to occupiers in

the Estate or members of the public.”

84. In the Counterclaim the defendants plead Clause 2.3 of the Management Agreement

which is asserted as placing an obligation on the plaintiffs to complete the development of

the estate in accordance with plans and specifications, and at para. 31 it is pleaded: -

“31. It is an express and/or implied term of the Management Agreement that:

31.1 Glenkerrin Homes complete the development of the Estate (as defined in the

Management Agreement) as a business park and the Estate Common Areas

therein, in accordance with the plans and specifications thereof, to a good

and workmanlike standard free from defects and in accordance with the

applicable grant of planning permission, building regulations and standards,

and such that the Estate Common Areas do not pose a health and/or safety

risk to occupiers in the Estate or members of the public.

31.2 The Defendant is neither required nor obligated to acquire the Estate

Common Areas until such time as Glenkerrin Homes has completed the

development of the Estate as a business park and the Estate Common Areas

therein, in accordance with the plans and specifications thereof, to a good

and workmanlike standard free from defects and in accordance with the

applicable grant of planning permission, building regulations and standards,

and such that the Estate Common Areas do not pose a health and/or safety

risk to occupiers in the Estate or members of the public.

Page 34 ⇓

32. Insofar as the aforementioned terms of the Management Agreement constitute

implied terms, such implied terms were agreed between the parties to the

Management Agreement, and/or represent the presumed common intention of the

parties to the Management Agreement, and/or are necessary in order to give

business efficacy to the Management Agreement given the nature of the contract.”

At para. 35 it is pleaded that Glenkerrin has failed to date to construct, repair or maintain

the estate common areas and in particular the carpark in accordance with its obligations

under the Management Agreement and identical particulars to those set out in para.7 of

the Defence are repeated. Then there is a plea in the alternative for rectification of the

Management Agreement:

“36. Further and/or in the alternative, and without prejudice to the foregoing, if

the defendant is incorrect in its construction of the Management Agreement,

which is denied the defendant seeks rectification of the Management

Agreement as pleaded herein after.”

At paragraph 36.1 it is pleaded that the parties executed the Management Agreement

under a “mutual mistake of fact and that the Management Agreement embodied the

complete terms of the agreement reached between them”. Paragraph 36.2 pleads: -

“36.2 Further and/or in the alternative and without prejudice to the foregoing, the

Management Agreement was executed by the parties thereto under the

Defendant’s unilateral mistake of fact that the Management Agreement

reflected the agreement of the parties requiring, prior to the acquisition of

the Estate Common Areas by the Defendant, Glenkerrin Homes to complete

the development of the Estate as a business park and the Estate Common

Areas therein, in accordance with the plans and specifications thereof, to a

good and workmanlike standard free from defects and in accordance with the

applicable grant of planning permission, building regulations and standards,

and such that the Estate Common Areas do not pose a health and/or safety

risk to occupiers in the Estate or members of the public. The Defendant

laboured under this unilateral mistake of fact in circumstances where the

Plaintiffs knew, or ought to have known, of the said mistake by the

Defendant.”

85. In their amended Reply to Defence and Defence to Counterclaim at para. 2 the plaintiffs

do not admit failure to –

“completely and/or properly develop and construct the estate common areas,

specifically in the underground carpark and the defendant is put upon strict proof

of: -

(i) The alleged obligation to so complete as alleged, and

(ii) The alleged failure to develop and construct.”

Page 35 ⇓

The defects particularised by the defendant in para. 7 and repeated in para.35 are

specifically “not admitted and the Defendant is put on proof of each and every plea and

particular set out therein” and the repair estimate is denied and said to be “wholly

speculative”. Para.7(d) pleads:

“d. Strictly without prejudice to the generality of the foregoing, it is not admitted that

the Plaintiffs have failed, refused or neglected to develop and complete the Estate,

include Estate Common Areas, in accordance with the applicable grant of planning

permission, building regulations and standards, and such that the Estate Common

Areas do not pose a health/and or safety risk to occupiers in the Estate or member

of the public.”

The construction of the Management Agreement contended for by the defendant is

denied; so also the implied terms contended for by the defendant are denied, as is the

case pleaded for rectification, and it is pleaded that the defendant “has assumed

responsibility for the Estate Common Areas (including the obligation to repair and/or

upkeep)” (para. 17). In other respects, the plaintiffs essentially join issue with the

defendant on its defence and counterclaim.

86. The defendant raised some eighty-four Interrogatories for the examination of the

plaintiffs, to which sworn answers were given by Mr. McCann. These relate largely to the

condition of the underground carpark at different times. A number of the responses are

noteworthy. No. 46 asked “on 23rd March, 2018 was the underground carpark fit for

occupancy?” To which the response was –

“On the information available to the Receivers on 23rd March, 2018 the

underground carpark was fit for occupancy.”

At no. 47 the response was given that it was “fit for occupancy” at the time of

commencement of the proceedings. No. 48 asked – “Is the underground carpark

presently fit for occupancy?” To which the response was “it is so alleged that the carpark

is presently not fit for occupancy but the Receivers cannot answer this interrogatory until

investigative works are performed.” Notwithstanding this reply at trial the plaintiffs stood

over all the pleas in their Reply and Defence to Counterclaim related to the condition of

the car park.

Interrogatory no. 76 asked –

“On what dates did the plaintiffs, or any of them, cause a survey to be conducted of

the underground carpark?”

The sworn response was: -

“76 For the purposes of the matters at issue in these proceedings, a survey was

conducted in May, 2018. Previously, in April 2017 and October, 2017 the site was

examined by contractors primarily for the purposes of preparing tenders for works

Page 36 ⇓

focussing on the condition of the existing firearm and electrical system installed in

the carpark.”

No. 78 asked –

“Had the plaintiffs, or any of them, caused a survey of the underground carpark to

be conducted since the commencement of these proceedings?”

to which the answer was “yes”, and, at answer 79, that this survey was done in

August, 2018.

Notwithstanding that such surveys were carried out, the plaintiffs did not put such

surveys to Mr. Campbell in cross-examination or seek to stand over them at trial.

The Carpark, its condition and the evidence of Mr. Campbell

87. Counsel for the plaintiffs did suggest that the court was required to construe the

Management Agreement and, in combination with that, the Leases of Easements, and was

not required to make any findings or determinations with regard to the state or condition

of the car park.

88. I cannot agree with the last part of that submission. Central to the defendant’s case is

that the condition of the car park is such that if the plaintiffs were now required to

transfer the Estate Common Areas to the Management Company they would be unable to

comply with their obligations under the Management Agreement. This is specifically

denied by the plaintiffs, and in the pleadings all alleged defects are denied and the

defendant is ‘put on proof’, and this is therefore an issue in the case. Moreover, given

that it is beyond dispute that the Management Agreement incorporates Condition 36 of

the Law Society General Conditions of Sale (1995 Edition), as previously recited, and that

this would (at the very least) impose obligations of certification in respect of Planning

Permission compliance and Building Bye-Law Approval and substantial compliance with

Building Regulations, it is essential that the court address the evidence of Mr. Campbell,

and I propose to do so.

89. It is first necessary to make findings as to when the carpark was constructed. Planning

Permission for the Campus was granted on 6th December, 2000. Kildare County Council

issued a Commencement Notice under the Building Control Regulations, 1997 on 23rd

February, 2001 in respect of “erection of Blocks A,+ B, + C, + D, + E and car parking…”.

Mr. John Brady, a Director of the defendants since 2012, gave evidence. He became the

owner of Unit 6 in the Campus in 2003, and became registered as owner on 11th

November, 2003. His evidence was that the carpark was for much of the time hidden

from his view by hoarding, but that it “existed in 2004”. An Ordnance Survey aerial

photograph of the Campus taken on 8th September, 2004 shows some parts of the

Campus constructed, other parts under construction, and quite clearly shows that the

Carpark had been constructed, and cars can be seen parked on it at upper deck level,

alongside newly constructed Blocks A and B. The second named plaintiff Mr. Danny

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Grehan was called by the defendant to give evidence. He said the carpark was

constructed in “probably 2003” and he went on to state: -

“completed, probably, I would say, maybe, 2004 and only the upper deck would

have ever been in use”.

I regard this as the best available evidence of when it was constructed and completed.

90. I find that construction of the carpark probably took place in 2003/2004, and was

probably complete (in the sense that the structure was in place) in 2004, and was

certainly complete to the point where the upper deck could be used at some point prior to

8th September, 2004.

91. Mr. John Campbell engineer gave evidence on Day 3 on behalf of the defendant. There

was some challenge under cross-examination as to whether his experience was such as to

enable him to give expert opinion evidence in relation to carpark structures. As he states

in his Witness Statement he is “an engineer of JJ Campbell & Associates Limited. I have

40 years’ experience and my qualifications are: BE, P. Eng. – Canada, C.E. Eng. MIEI,

ACEI, Registered Engineer.” In his oral evidence he said he had designed “twenty or so”

multiple storey or two deck carparks, and that he had “remediated a number of carparks

in my lifetime”. He confirmed on re-examination that he had worked on twenty or thirty

multi-storey carparks.

92. Mr. Campbell’s primary evidence in relation to the carpark was that it was not constructed

with any expansion joints, and under re-examination he was asked whether he had ever

seen other carparks of a similar size without an expansion joint, to which he responded –

“A. I’ve remediated one 35 years ago in British Columbia without the appropriate

expansion joint and exactly the same thing… similar… a spalling of the concrete was

occurring. The actual pre-stressed units were pulling away from the beam. It’s the

same symptoms.” (Transcript Day 3, pg. 159).

93. I was satisfied at hearing and remain satisfied that Mr. Campbell had appropriate

qualifications and experience to tender expert evidence as to the nature and condition,

including structural, of the carpark and the nature of any remediation works that might be

required. I also found Mr. Campbell to be a good witness and in all material respects I

accept his evidence and opinions as correct.

94. Furthermore, the plaintiffs did not call any engineer or other expert to contest any of Mr.

Campbell’s evidence, nor did they produce any engineering report that would call into

question any of his core evidence or opinions. This casts in a very poor light the

correspondence sent on behalf of the Receivers pre-trial, and prior to the issue of

proceedings, making assertions as to the safety of the carpark based on their own

engineering advice, and the belief of NAMA as expressed by Ms. O’Sullivan in her

evidence characterising Mr. Campbell’s evidence as “speculative.”

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95. Mr. Campbell attended at the carpark on 24th April, 2018 with Mr. Seamus Nolan, whose

report of 30th April, 2018 has been referred to earlier. Mr. Campbell then prepared his

“Preliminary Structural Report on Maynooth carpark” dated May, 2018. Mr. Campbell

stood over the contents of that report, and these contents have been detailed earlier in

this judgment. I accept as correct Mr. Campbell’s findings in that Preliminary Report, and

in particular as set out in the extracts and the executive Summary quoted earlier. It will

be recalled that he found that there were no expansion joints in the pre-cast concrete

deck, that there was cracking in the column corbels supporting the pre-cast concrete

beams, that the pre-cast hollow core units on the end base were pulling off concrete off

the support beams due to the inbuilt thermal forces being applied in the concrete deck,

that there was a spalling of concrete which presented an ongoing health and safety risk to

users of the lower floor, and that –

“1.6 Remedial works are required to relieve these thermal concrete forces. The

remedial works involve introducing expansion joints in the carpark suspended deck

together with injection works to the cracks and the corbels. The spalled concrete

area also requires repair. The details of this are complex and require a number of

considerations.”

96. Mr. Campbell’s evidence then relied on his second report dated 21st June, 2018, prepared

following a visual structural inspection of the carpark without any opening up. In s.1.0 he

describes the carpark as consisting “of a suspended upper deck over a lower deck which

is 1.5m below surrounding ground level. This lower deck has a slab on grade and is

currently closed to the public.” He indicates that he limited his structural overview to the

suspended upper deck measuring –

“18m x 93m on plan” and consisting of “16m long 400mm deep pre-cast pre-

stressed hollow–core units with a concrete structured screed supported on corbeled

pre-cast concrete beams supported off corbeled pre-cast columns. An asphalt

water-proof barrier is present on top of the deck.

The suspended deck is supported by concrete walls on all four sides, these walls

incorporate ventilation openings and ramp openings.”

Mr. Campbell reported that he was unfamiliar with the foundation type, and that the

“structure is circa 10 years old”, although as matters transpire I find that it is probably 15

years old at this stage. His core evidence is set out in s.2.0 where he comments on the

existing structure, and at s.3.0 where he gives his opinion: -

“2.0 Comment on existing structure:

2.1 Thermal forces in the car park structure are causing spalling of the concrete

corbels to a number of beams and cracking in a number of column corbels.

Water ingress at these locations has initiated corrosion of the exposed re-bar

at the spalled locations. In addition the exposed pre-stressed steel tendon at

the ends of the precast hollow-core units are susceptible to corrosion.

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2.1 [sic]Ongoing spalling of concrete at beam corbels renders the car park unfit

for occupancy at basement level. The spalled concrete pieces are sharp in

profile and create a risk to the public. It is of note that where the spalled

areas have been repaired, the repair itself has since partly spalled and fallen

off. Water ingress is also occurring down through the spalled beams

suggesting that horizontal separation is occurring in the precast deck over.

2.2 The corbels integral with the columns are showing signs of vertical cracking.

2.3 The 80-metre x 93-metre precast concrete car deck – open to the elements,

is of a considerable size without expansion joints. The deck is also locked

into peripheral concrete walls which further restricts thermal expansion and

contraction creating additional localised cracking in the deck.

2.4 The Institute of Structural Engineers – Design Recommendations for Multi

Storey and Underground Car Parks (3rd Edition) – Recommend expansion

joints at a maximum of 60 metre centres as opposed to the 80 metre x 93

metre deck.

3.0 Opinion: We are of the opinion that:

3.1 The ongoing random spalling of sharp angular pieces of concrete from

support beams over makes the lower car park level a severe health & safety

risk, due to the significant potential to be struck & injured by large chunks of

falling concrete.

3.2 If the existing structural arrangement continues, the cyclic thermal forces

shall further deteriorate the suspended structure leading to more severe

ongoing corrosion caused by water ingress, possible cracking to ends of

hollow-core units and enlargement to cracking in column corbels.

3.3. The ongoing cyclic forces, the deterioration in the beam corbels caused by

cracking and spalling together with enlargement of cracking of the column

corbels shall present a further health and safety risk to any public user in

both the upper and lower car decks as local collapse shall be a concern in the

next 10 years.

3.4 We are of the opinion that new expansion joints should be incorporated into

the structure including a combination of sliding joints and additional rows of

columns at the new expansion joints.

We must emphasise that the above is based on a visual inspection and we

recommend that opening up works are carried out to establish conditions of

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ends of precast hollow-core units and condition of structural screed where

water ingress has occurred. The impact of new expansion joints on

potentially propped cantilever walls shall require further investigation.”

97. On this evidence alone I find: -

(1) That the structure of the carpark as designed and constructed is significantly

defective in that it fails to incorporate expansion joints such as are

recommended/required for a concrete decking as large as 80m x 93m.

(2) That thermal forces caused by the absence of expansion joints has led to spalling of

concrete corbels and a number of beams, and cracking of a number of column

corbels.

(3) That the thermal forces are such that where spalled areas have been repaired, the

repair itself has since partly spalled and fallen off, and clearly such repairs are not

an adequate answer to the problem of expansion.

(4) That the cyclic thermal forces will cause further deterioration to the suspended

structure, leading to more severe corrosion caused by water ingress, and possible

cracking of the ends of the hollow-core units, and enlargement of cracking in

column corbels.

(5) That there is an existing health and safety risk from random spalling.

(6) That further deterioration will lead to further health and safety risk to the public,

including a risk of “local collapse in the next 10 years”.

(7) That to remedy the defects new expansion joints should be incorporated into the

structure which include a combination of sliding joints and additional rows of

columns at new expansion joints as outlined by Mr. Campbell.

(8) That opening up works are required to establish the condition of the ends of the

pre-cast hollow-core units and condition of structural screed where water ingress

has occurred, and depending on what is found further remedial works may be

required i.e. the incorporation of new expansion joints may not be the only

remedial work required.

[Emphasis added]

98. Photo no. 8 accompanying Mr. Campbell’s report, an enlarged coloured copy of which was

produced in evidence, is a “view of ‘repaired’ concrete column, concrete spalling off beam

& crack at beam crack – column junction” and graphically demonstrates the features of

cracking and spalling and failure of repairs referred to in Mr. Campbell’s reports and in his

evidence. One of these cracks, described on the photograph as “expansion cracking in

concrete beam/column joint” is present in a beam immediately over one of the corbels.

Mr. Campbell characterised this as “alarming”, and even a layperson viewing this would

have to agree. Mr. Campbell’s photographs nos. 4 & 5 show views of asphalt cracking on

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the deck surface, and his opinion was that this cracking was likely to be over a horizontal

concrete support beam. His photographs nos. 9 and 10 showed cracks in column corbels

99. It was suggested to Mr. Campbell in cross-examination that the spalling and cracking

damage could have been caused by water ingress rather than thermal movement, given

that there was ingress of water from the upper deck. Mr. Campbell’s opinion was that the

spalling happened first because the structural screed surface “would have been intact

before the spalling occurred and…there would have been no cracks within that structural

screed before the spalling occurred.” He also relied on the fact that a particular problem

with drains on the upper deck concerned Eco drains which he stated were “downstream”

of the locations where the spalling of the structural beams was observed. On re-

examination he confirmed his opinion that the cause of the spalling was: -

“The thermal movements. And what’s happening there is its where the hollow-core

unit is burying [sic] locally on the actual beam and then it’s being pulled by the

thermal movements, and that’s what creates a spalling of the concrete. And that

will continue to happen because we have seen the last time it was all repaired and

the repair was ripped off again.” (Transcript Day 3, pg. 157).

100. Mr. Campbell also relied on parts of BS 8110-2 of 1985 “Structural use of concrete – part

2: Code of Practice for special circumstances”. I am satisfied from his evidence that this

is a document relied on by engineers as setting a standard in the field, and as identifying

the need for expansion joints to cope with thermal expansion in circumstances such as

prevail in this car park. Section 8 is headed “Movement Joints”, and explains the

properties of concrete, and why movement joints may be needed. Section 8.1 notes “the

tendency for concrete to crack and the limitation of such cracking is also influenced by

many factors…However, there are cases where the most appropriate or only control

measure is a movement joint.” Section 8.2 is headed “Need for Movement Joints” and

explains: -

“8.2 In common with all other structural materials, concrete expands when heated and

contracts when cooled; it also expands when wetted and shrinks when dried. It

also undergoes other strains due to the hydration of the cement and other

properties of the material itself and of its constituent parts. If these expansions

and contractions are restrained stresses will occur which can be of sufficient

magnitude to cause immediate cracking of the concrete or cause cracking to occur

later owing to fatigue failure due to long term repetition of the stresses. Creep of

the concrete over a long period and in some cases reduce stresses due to restraint,

but generally this should not be relied upon. Differential settlements of foundations

due, for example, to mining subsidence should also be taken into consideration. As

these factors may cause unsightly cracking, damage to finishes and even structural

failure, the possibilities and effects of such cracking should be properly investigated

in relation to the design, reinforcement and form of the member or structure

concerned and in the light of published information, and if then found necessary to

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present or limit the effects of such potential cracking, movement joints should be

provided at predetermined locations.

Some indication of the possible magnitude of the movements to be dealt with in a

concrete structure may be gained from the following examples-

(but see also section 7).

(a) The average coefficient of thermal expansion of normal-weight concrete is of

the order of 10 x 10 -6/◦C and 8 x 10-6/◦C for lightweight aggregate concrete

(see Table 7.3); thus the difference in length of a concrete member 30m long

due to 33◦C change in temperature could be approximately 10mm.

8.4 Provision of Joints.

The risk of cracking due to thermal movement and shrinkage may be

minimized by limiting the changes in temperature and moisture content to

which the concrete of the structure is subjected. The extent to which this can

be done in the completed structure will depend very largely on its type and

environment, ranging from the underground basement which is in conditions

of relatively constant temperature and humidity, to the uninsulated elevated

structure which might follow closely the atmospheric temperature and

humidity. Furthermore, in buildings the effects of central heating on both the

temperature and moisture content of the structure, combined with the

relatively low thermal storage capacity of buildings clad with lightweight

curtain walls, may give rise to more onerous thermal and humidity conditions

than in the older, heavier, relatively unheated buildings. Thus, the

investigation of the necessity to provide movement joints is becoming more

important.

Cracking can be minimized by reducing the restraints on the free movement

of the structure, and the control of cracking normally requires the subdivision

of the structure into suitable lengths separated by the appropriate movement

joints.”

101. Mr. Campbell’s conclusion at s.2.4 refers to a document produced by the Institute of

Structural Engineers headed “Design Recommendations for Multi-Storey and Underground

Carparks (Third Edition)”, which appears to be the June 2002 edition. Mr. Campbell

described this as the “Bible” for engineers when designing or constructing carparks, and

again I am satisfied from his evidence that this is a document relied on by engineers as

setting the standard in the construction of the concrete carparks. I am satisfied it was

published before the carpark was constructed. He referred to one extract: -

“Table 8.1 shows that a typical design temperature range (taken from BS5400) for

a carpark top deck in the UK can be 45◦C. On this basis, for a 60m-long structural

frame, the movement joint may have to deal with thermal movements of the order

of 30mm. The movement joint must be able to accommodate this movement in

addition to shrinkage and creep.”

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102. This extract is reflective of the detail from s.8.2(a) of BS8110-2 quoted above. I accept

Mr. Campbell’s evidence that these documents represent the standards that should have

been adopted in the design and construction of a large carpark in order for it to be

structurally sound, and to remain so over its expected lifespan, which Mr. Campbell said

should be in the range 60-100 years. I am therefore quite satisfied that the failure to

incorporate movement joints into such a large expanse of concrete carpark constitutes a

structural defect. Nor is it necessary for further investigations to be undertaken in order

to confirm this finding. Mr. Campbell was “very confident about why the carpark is

behaving the way it is” i.e. spalling and cracks due to thermal expansion due to the

absence of movement joints. The reason he recommended further investigations was to

ascertain whether “there are more structural defects than what’s already been identified”

(see Transcript Day 3 pp. 133-134).

Mr. Campbell’s evidence, which I accept, is that “if you put in the expansion joints in the right

place and if you engineer it properly with the proper reinforcement, you won’t have a

crack…if the concrete is properly engineering, it will not crack” (Transcript Day 3 p. 148).

103. Mr. Campbell also gave as his evidence that the works most recently carried out at the

behest of the Receivers, and for the purpose of “commissioning” the basement car park

and enabling the sale of Block C to be completed, “do not address the structural defects”

which he identified. I accept this evidence as correct.

104. There was one other report put in evidence that refers to the condition of the carpark.

This is a report from Travelers Insurance Co. Ltd dated 3rd August, 2018, addressed to

Ms. Rose Anne Grehan, and obtained by her in her capacity as manager employed by the

defendant. Although she was involved with the Campus from 2006, she did not see the

basement car park until about 2011 as it was blocked off, and the defendant did not visit

or inspect it until 2016. Her evidence was that in March/April 2016 the Receivers were

planning works on the car park to make it fully operable, and she became aware that

Declan Keane Consulting Engineers, had been engaged by the Receivers for that purpose,

and that contractors were carrying out works. In June 2018, following the reports from

Mr.Nolan and Mr. Campbell to the effect that the car park was not fit for purpose, and

concerns of the defendant as to the insurance position in the event that it was obliged to

take over the car park, Ms. Grehan briefed Travelers Insurance and requested their

report. Their Report of 3rd August, 2018 is signed by Mr. Ray McKenna and opens –

“Following on from our risk management surveyors on-site meeting of the 2nd

August 2018 this letter related to our opinion as to the property and public liability

insurers on the issues noted in the lower ground level car parking structure to

Blocks A,B and C of the Maynooth Business Campus.”.

On p.2 Mr. McKenna refers to Mr. Campbell’s report of 3rd May, 2019 on the pre-cast

concrete structures and states: -

“I would be in agreement with his opinion on the issues noted. Specifically that

these issues were likely caused by inappropriate, ineffective or missing

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expansion/movement joints to the large area of concrete deck that forms the car

park above.”

After referring to some of his own photographs of the spalling and defects he states, on

p.4: -

“As the insurer of both the property and liability associated with these premises we

would be concerned that this issue will continue to develop and as such

1. In the short term this issue results in an increased risk to those who would

use the area being injured or their cars being damaged by falling pieces of

concrete

2. In the longer term it will likely result in the weakening of the structure itself

to the point it becomes unusable both above and below.”

On p.5 he concludes:

“Overall Opinion

Specifically with regard to this lower ground level car parking area it is our opinion

that the issues highlighted above currently make the area unacceptable for use as a

car park. Indeed it should remain closed to all but those who have to access it for

the purposes of addressing the issues raised. It is further suggested that due to

the risk of falling concrete, noted above, hard hats should be worn by anyone

visiting the area.

Again given the above issues we are continuing with our decision not to extend the

public liability cover provided by your policy to this area.

Should you wish further clarification or should any remedial works be scheduled

please contact me directly.”

Ms. Grehan confirmed that it has not been possible to include the basement car park in

the defendant’s insurance cover since the inception of cover with Traveler’s in 2011.

105. A copy of the Traveler’s report was furnished by the defendant’s solicitors P & G Stack to

the plaintiff’s solicitors Gartlan Furey with a letter dated 4th September, 2018. This

followed numerous requests by P & G Stack in earlier correspondence for a copy of the

plaintiffs’ engineer’s report that prompted Gartlan Furey to assert in their letter of 23rd

May, 2018 that “our client recently commissioned its own survey of the car park which

confirmed that the structure is stable and that it accords with a grade 1 basement in

accordance with BS8102”, to repeat such assertions in their letter of 7th June, 2018 and

state “our clients have confirmation from their engineer that the car park structure is

stable”, and to assert in their letter of 13 July 2018 that “we have independent

confirmation that the car park is fit for purpose”. Despite these assertions no engineering

report backing them up was disclosed, and no such evidence was adduced at hearing,

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even though Ms. Higgins admitted in her evidence that a survey report was obtained by

the Receivers in May 2018, and that a positive decision was taken not to furnish it.

106. The reason offered for not furnishing that report was that it was not reasonable to

produce it at a point in time when litigation was being threatened. It is difficult to accept

this explanation. Although it is tempting to draw another inference, suffice it to say that

if it is correct it is quite extraordinary that the Receivers should decide not to furnish an

expert survey that backed up their position at a critical stage in the engagement between

the parties/their solicitors. I also find it probable, from Ms. Higgins’ evidence under cross

examination, that the Receivers, with the knowledge and approval of NAMA, took the

decision to issue proceedings to compel the defendant to execute the Lease of Easements

in May 2018 and were not prepared to countenance what would be occasioned by further

investigation of the condition of the car park, and were not prepared to face what it might

disclose, and were insistent on deadlines that were unreasonable given the ongoing

investigations by the defendant’s experts of which they must have been aware.

107. The Receivers must have been aware that there was a structural issue, if not from their

WK Nowlan’s report in 2017, or from their own survey, at least from receipt by their

solicitors of Mr. Campbell’s first report, yet they chose to push through a sale of Block C

with works that would allow the basement to be used as a carpark in the short-term.

Regrettably I find, whether it was on foot of advice or otherwise, that they deliberately

and irresponsibly closed off their minds to the core structural problem and the future risk

to safety, including the risk of collapse in years to come.

108. The extent and cost of remedial work was also put in dispute. In their letter of 13 July

2018 Gartlan Furey disclaimed all liability for the works, and contested the extent of the

works required, but on a without prejudice basis expressed willingness to place in an

escrow account €196,230 as the “sum estimated by WK Nowlan in respect of the scope of

works required to address the matter raised by” Mr. Nolan in his report of 30 April, 2018.

However WK Nowlan’s estimate makes no provision for the installation of expansion joints

or the possibility that on full investigation further significant remedial work might be

required. Insofar as it allows €75,000 for repair of spalling I am satisfied that it

contemplates only cosmetic repair work (“surfaces to be sanded down and

replastered/sealed”) and does not cover the cost of any structural work.

109. Mr. Campbell’s third report dated 3rd October, 2018 was also put in evidence and does

deal with the scope of structural repair and estimated cost. It is entitled “expected

structural remedial works…and quantum of costs of works”. It emphasises the risk that

the further investigation recommended may “uncover other structural problems”, but it

anticipates that the main structural work “is the installation of two expansion joints in the

carpark deck and slip joints at spalled beams at each end”.

110. This work involves “synchronised jacking of the hollow-core slabs and beams and

installing special Teflon/Neoprene slip pads as an engineered sliding joint. A special

Radflex expansion joint system together with a Conidec epoxy repair and new asphalt are

Page 46 ⇓

to be installed. Ends of concrete beams are to have exiting dowels released at expansion

joints”.

111. Other cost items then are referenced – investigation works including opening up, repair of

column corbels, load testing, repair of spalled corbels, walls and foundations to be saw

cut at new expansion joints, general repair of the asphalt surface. Section 5 deals with

quantum: -

“5.1 Preliminary Cost of Structural Repair: At this stage we are of the opinion that the

Works shall exceed €1.5m due to their specialist nature. As is evident from the

Drawings attached, showing the specialist works involved – it is only after tender

that a definite repair cost can be established.

We shall not give an itemised breakdown of costs, however there are approx. 200m

of expansion joints/slip joints. This complex works to the carpark, involves

synchronised specialised propping/jacking and specialised installation of the Radflex

joint system. The contractor is likely to engage specialist companies from the UK

such as for the synchronised jacking. The cost of specialist works is difficult to

establish at this stage and the €1.5m is our best preliminary estimate.”

Section 5.2 indicates that replacement of the asphalt on the deck may be required, with a

new epoxy bonded membrane and this would be an additional cost. Section 5.3 indicates

the need for supervision via a structural engineer, at a cost around 10% of construction.

112. A further “preliminary works estimate for structural remediation to Maynooth Carpark”

dated 8th October, 2018 prepared by Mr. Campbell and exhibited by him in an affidavit

sworn for the interlocutory hearing consists of two pages listing all the items, including

contingency of €200,000 and giving a costing of €1.99m, which with VAT at 13.5% comes

to €2.258m, and such a figure excludes “non-structural repair works”, “design team fee

10% cost of works”, and “cost of impact on operation of carpark”.

113. It is evident from this material that the cost of remedial works cannot at this stage be

ascertained with any accuracy, but looking at the figures presented I am of the view that

overall it has the potential to exceed €3 million. No other solution or remedial works, and

no other costings were suggested in any evidence called by or on behalf of the plaintiffs.

The likely cost of the work is itself further evidence of the significance of the structural

defect.

Building Regulations

114. Mr. Campbell’s evidence also addressed the question of whether the structural defect in

the car park is such that it was built in breach of Building Regulations, and hence the

question whether, as it stands, it could be certified as compliant for the purposes of

satisfying General Condition 36. From his evidence and this court’s scrutiny of the

relevant primary and secondary legislation, and applicable standards, I find as follows: -

Page 47 ⇓

(a) The applicable overarching legislation is the Building Control Act, 1990. Section 1

defines “building” such that it “includes part of a building and any class or classes of

structure which are prescribed by the Minister to be buildings for the purposes of

this Act.” Accordingly the starting point is that any structure or building is included,

and this includes a car park. “Works” is also defined; it “includes any act or

operation in connection with the construction, extension, alteration, renewal or

repair of a building”. Section 2 applies the Act to “buildings” and “works”.

(b) Section 3(1) of the 1990 Act empowers the Minister to make regulations inter alia

in relation to the “(a) the design and construction of buildings”, and “(d) buildings

as regards which any material change takes place in the purposes for which the

buildings are used.” By virtue of s.3(3) “…there shall be deemed to be a material

change in the purposes for which a building is used if, on or after the operative day

(a) ….

(b) ….

used for a particular purpose, a building to which the regulations apply and

which was not being used for that purpose, becomes so used.”

“(a) making provision for the securing the health, safety and welfare of –

(i) persons in or about buildings, and

(ii) persons who may be affected by buildings or by matters connected

with buildings” and

“(e) making provision for the encouragement of good building practice”.

(d) The Building Regulations, 1991 promulgated by the Minister under the 1990 Act,

apply to “buildings” and “works” other than those exempted in regulation 6, which

does not exempt car parks. Reg.5 provides –

“(1) The Minister may publish, or arrange to have published on his behalf,

documents to be known as “technical guidance documents” for the purpose of

providing guidance with respect to compliance with the requirements of any

of the provisions of the First Schedule.”

Reg.8 provides:

“(1) All works to which these Regulations apply shall be carried out –

(a) in accordance with the appropriate requirements as set out in the First

Schedule; and

(b) in such a manner as to avoid the breaching of any other requirement of that

Schedule.”

Reg. 9 provides:

Page 48 ⇓

“Subject to articles 6 and 7, these Regulations shall apply to all works in connection

with the design and construction of every new building.”

Nothing in article 6 or 7 is directly relevant.

Part A of the First Schedule is headed “Structures” and under the sub-heading “Loading.”

section A1 reads:

“A1. (1) A building shall be so designed and constructed that the combined dead,

imposed and wind loads are sustained and transmitted to the ground –

(a) safely, and

(b) without causing such deflection or deformation of any part of the building, or

such movement of the ground, as will impair the stability of any part of

another building.”

(e) If it is assumed that the 1991 Building Regulations applied to the design and

construction of the car park, I find that the there was breach of A1 in Part A of the

First Schedule in that the absence of expansion joints means that the design and

construction of the car park is such that the combined dead load is not “sustained

and transmitted to the ground…safely” given the probability that the entire

structure will (unless remedied) become unsafe in 10 years or so.

(f) In particular I find that the engineering standard set out in BS8110, published in

1985, was not followed. Although not a standard prescribed by the 1990 Act or the

1991 Regulations the failure to follow its logic and guidance on movement joints

has resulted in a breach of regulation insofar as the car park as constructed to date

is not designed or constructed to safely sustain its load for its expected lifespan.

(g) Further, the Minister published a technical guidance document (“TDA”) I.S. 326 of

1995 for ‘Structural work of reinforced pre-stressed or plain concrete’. Although out

of print and not available – since it was replaced by another I.S.326 effective from

16 July 2004 – I am satisfied from the evidence of Mr. Campbell that the 1995 TDA

was substantially the same as the 2004 TDA, and that both are “no different to”

and “almost a duplicate of BS8110 (1985)”. Indeed I.S. 326 of 2004 in the

Foreword expressly “consists of the text of BS8110: Parts 1,2, and 3 ‘Structural Use

of Concrete’ as amended herein”, and is revised to avoid conflict with a new Irish

Standard I.S.EN:2002, which covers the methods for specifying and producing

concrete as a construction material up to the point of delivery – and is therefore not

relevant to the issue of movement joints.

(h) In my view this entitles the court to view the substance of Part 2 of the BS8110,

including Section 8 on Movement Joints, as setting out the standard that should

have been applied by virtue of I.S.326 of 1995. The design and construction of the

car park did not follow the advice set out in BS8110, and hence was not compliant

with I.S.326 of 1995, and hence breached Regs. 8 and 9 of the Building

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Regulations, 1991 in that the building as constructed to date is not designed or

constructed to safely sustain the load for its expected lifespan.

(i) The Building Regulations 1997 were promulgated under the 1990 Act to replace the

1991 Regulations but may not have replaced them in respect of the car park in the

following circumstances. Although Reg.2 provides that the 1997 Regulations came

into operation on 1st July, 1998, under Reg.3(2) they were disapplied to “works, or

a building as regards which a material change of use takes place, where –

(a) ….

(b) the works commence or the material change of use takes place between the

date referred to in article 2 [1st July 1998] and the 31st day of December,

2002.”

The Commencement Notice for the Blocks A-E and the car parking was dated 23

February, 2001. I have found, based on the evidence of Mr. Danny Grehan, that actual

construction work probably commenced in 2003 and probably ended in 2004. Reg.4(2) of

1997 provides for the continued application of the 1991 Regulations where the “works or

building fall within article 3(2)” i.e. where work commenced before December 2002.

If the works had “commenced” prior to 2002 by virtue of the Commencement Notice, or if

they had in fact actually commenced prior to December, 2002, then Reg.3(2) would see

to disapply the 1997 Regulations. I prefer to the view that use of the work “commence” in

Reg.3(2) as referring to actual commencement of work because there is no further

wording in the regulation that ties it in to the issue of a Commencement Notice.

(h) There is however no need to resolve the conundrum as to whether the 1991 Regulations

or 1997 Regulations apply, because the relevant provisions of the latter regulations are

substantially the same, and if anything are more tightly drawn and hence more onerous

for builders/developers. The Third Schedule lists classes of buildings that are exempt; car

parks are not mentioned. Reg.7 empowers the Minister to publish “technical guidance

documents” compliance with which leads to prima facie compliance with Building

Regulations; Reg.9(1) mandates compliance in design and construction of works/buildings

with the requirements of the Second Schedule, and Reg.10 extends this to “every new

building”. I am satisfied that these regulations therefore apply to the design and

construction of an underground/overground two story car park such as that at issue.

Slightly different wording in Part A of the Second Schedule under “Structure” and

“Loading” now reads:

“A1 (1) A building shall be designed and constructed with due regard to the theory and

practice of structural engineering, so as to ensure that the combined dead, imposed

and wind loads are sustained and transmitted to the ground –

(a) safely, and

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(b) without causing such deflection or deformation of any part of the building, or

such movement of the ground, as will impair the stability of any part of

another building.”

[Emphasis added to the new wording].

(h) In addition under the Building Regulation 1997 the Minister published “Technical

Guidance Document A” which gives guidance in relation to Part A of the Second

Schedule. Sub-section 2 on “Design and Construction of all Building Types – Codes,

Standards and References” lists the codes and standards appropriate for design and

construction of “all buildings” and structures, and includes “Structural work of

reinforced, prestressed or plain concrete – I.S. 326: 1995”. This was “Standard

Specification (Concrete. Part 1: Code of practice for the structural use of concrete)

Declaration 1995”, referred to earlier, which was revoked by I.S.326:2004 but

which was, I am satisfied, current when the car park was under construction.

(i) I am satisfied that, as with the 1991 Regulations, the failure to incorporate

expansion joints constituted a breach of A1(1) in the 1997 Regulations, and that

that omission was a failure to have due or any regard to the theory and practice of

structural engineering as advised in BS8110 and I.S.326 of 1995, and the Institute

of Structural Engineers document of June 2002 (the 3rd Edition) in regard to

specific advice on the need for movement joints in concrete frames exceeding 60

metres.

Certification

115. I turn now to the question of certification following the construction of the carpark. This

is of some significance because Gartlan Furey in their letter of 7 June, 2018 on behalf of

the Receivers suggested to P& G Stack solicitors for the defendant that there was

certification for the car park, and they purported to enclose “Architects Opinion on

Compliance dated 3 October 2010 which contains Engineers Certificate.” The letter

enclosed various Certificates, which were put in evidence by Ms. Higgins, and which were

put to Mr. Campbell. These appear to have been obtained in 2010 in order to support the

Receivers title and facilitate sales.

116. I have been unable to locate any certificate dated 3 October, 2010, but this seems to be

because that date was given in error, and the author intended to refer to the main

Architect’s Opinions from Horan Associates which both appear to be dated 3rd November,

2010 and one of which contains in Schedule A. a list of other “Confirmations” or

certificates. The confirmations or certificates of any possible relevance are:

(a) The certificate from Edward Horan of Horan Associates Architects, dated 3rd

November, 2010 giving an “opinion on the Compliance of Block C (Shell & Core

building only)” with planning permission. I find that this certificate does not relate

to the carpark.

(b) The certificate from Edward Horan of Horan Associates Architects, dated 3rd

November, 2010 giving an “Opinion on the Compliance of Block C (Shell & Core

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building only)” with Building Regulations. I find that this certificate also does not

relate to the carpark, contrary to the assertion of Gartlan Furey in their letter of 7

June, 2018.

This document, in Schedule A, lists various other “Confirmations” to some of which

I now refer.

This covers “all works at Block C including such parts of the common areas

supporting, serving or leading to the 2nd Floor situate at Maynooth Business

Campus, Maynooth, Co. Kildare”. It reads: -

“We Glenkerrin Homes certify that the construction of General Building works in

relation to the above premises:

(1) In substantial compliance with the Building Control Act 1990, the

Building Control Regulations, 1997 – 2004 and to the Building

Regulations 1997 – 2004; and

(2) In substantial compliance with the Design Documents, prepared by the

Design Team and Specialist Sub-Contractors/Consultants for the above

premises.”

This certificate adopts the definitions used in the Building Control Act 1990. Two

things are notable. Firstly, the developer appears to be assuming responsibility for

completion in accordance with the Building Regulations, including Regulations up to

and including 2004. Secondly, this certificate, although it refers to certain

“common areas supporting, serving or leading to the 2nd Floor”, it does not appear

to relate to the carpark as such.

(d) A certificate dated 27th October, 2010 from David Jenkins of Burke Jenkins

Consulting Engineers; this again relates to Block C, and construction works which

commenced “Feb 2007”. The description of the project covered by the certificate

states “this is a three storey office block, reference Block C. The project included

the structure which is pre-cast concrete frame and floors with part steeled roof and

masonry walls on strip and path foundation. This project was developed to shell

stage only.”

There is no reference to the carpark, which had been constructed prior to that

stage, and I find that this certificate does not relate to the carpark.

(e) A certificate dated 2nd November, 2010 from Concast Building Limited, which

relates to “Block C” and states –

“I confirm that the Pre-Cast Concrete elements designed, manufactured and

installed at the above by Concast Building Limited comply with the

requirements of the current Irish Building Regulations and with British

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Standards BS8110 with regard to structure and/or in accordance with

approved Concast Drawings.” [Emphasis added]

Nothing suggests that this certificate covers the carpark. If it does, it only covers

the elements manufactured and supplied by Concast – it does not extend to design

or overall method of construction of the entire car park. It is however notable that

Concast seek to comply with BS8110 in the design manufacture and installation of

concrete product.

(f) Next is a “roof warranty registration form WRD 991” from Multi-Roofing Systems

Limited, based on a completion/inspection date of July 2008. It relates to the

concrete deck structure in Block C – there is no reference to the carpark and it

appears to relate to the roof of Block C.

There are other certificates included with Ms. Higgins’ witness statement, but none of

them are material to the carpark.

117. It follows that the plaintiffs have not presented any certificate of compliance with planning

permission or Building Regulations in relation to the carpark or its construction. Even if

the Glenkerrin certificate could be generously construed as covering the car park, I find

that in light of Mr. Campbell’s evidence it is now worthless as certification, as the car park

was not in fact compliant with Building Regulations as constructed, or at the date of

certification in 2010, and the car park is not compliant as matters stand today, whether

you take the 1991 Regulations or the 1997 Regulations as applicable. On all these dates it

suffered from the same structural defect, albeit that there may have been no

manifestation of consequential stress or spalling when construction was first completed.

Substantial compliance

118. The only witness who addressed what would be required to constitute “substantial

compliance” under General Condition 36 was defendant’s independent expert Ms.

Suzanne Bainton, who distinguished it from a requirement to complete “free from all

defects”. Her evidence (D4 Transcript p. 163/164) was as follows:

“A. Substantial compliance, in my view means substantial compliance with the

requirements of the planning permission or with the requirements of the Building

Regulations and in the Standard RIAI Certificates of Compliance and its meaning,

and I am certainly not quoting, that along the lines that any non-compliance does

not warrant enforcement action by the local authority. So that would be my

understanding of what substantial compliance means. Free from defect has a

different meaning.

Q. It does?

A. In my view, yes.

Q. Yes. So we are in agreement about that, that you can have a building that is

substantially compliant in accordance with the definitions used in the certificate,

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that albeit has some defects but they don’t affect their ability to say it is in

substantial compliance?

A. Yes, if the defect was normal it could be in substantial compliance, yes”.

119. I accept this evidence as correct. Insofar as the carpark as constructed was structurally

defective in not having any expansion joint in the concrete slab, this could never be

described as a minor defect, and it constitutes such non-compliance with the Building

Control Act/Regulations that it could not be certified as “substantially compliant”.

120. Accordingly I find that the Glenkerrin certificates/opinions presented would not satisfy

General Condition 36 in the Management Agreement. No other potentially applicable

certificate has been put in evidence. Even if other certificates existed they could not

satisfy General Condition 36 in light of Mr. Campbell’s evidence.

121. Before leaving this subject, it is also worth noting that in the Special Conditions relating

to the sale of Block C and link building, the Receivers expressly excluded any warranty as

to compliance with planning permission, bye-law approval, Building Control Act and

building regulations, and General Condition 36 was “hereby deleted and shall not apply to

this sale” (Sp.C. 11.1), and by Sp.C. 11.3 limited the documentation/certificates to be

furnished to documents listed – and in the case of building certificates to the two Horan

Opinions of 3 November, 2010. The significance of this is that any contractual or other

claim that the purchaser might otherwise have had against the Receivers/vendor in

respect of the condition of the car park is contractually excluded.

Construing the Management – Principles of Construction

122. There was little if any dispute between the parties as to the principles that the court

should apply. These have been recently restated by the Supreme Court in Law Society of

Ireland v. Motor Insurers Bureau of Ireland [2017] IESC 31, where the Supreme Court

affirmed the continued application of the five rules of contractual construction set out by

Lord Hoffman in Investors Compensation Scheme Limited v. West Bromwich Building

Society [1998] 1 All ER 98, which are: -

“(1) Interpretation is the ascertainment of the meaning which the document would

convey to a reasonable person having all the background knowledge which would

reasonably have been available to the parties in the situation in which they were at

the time of the contract;

(2) The background was famously referred to by Lord Wilberforce as the ‘matrix of

fact’, but this phrase is, if anything, an understated description of what the

background may include. Subject to the requirement that it should have been

reasonably available to the parties and to the exception to be mentioned next, it

includes absolutely anything which would have affected the way in which the

language of the document would have been understood by a reasonable man.

(3) The law excludes from the admissible background the previous negotiations of the

parties and their declarations of subjective intent. They are admissible only in an

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action for rectification. The law makes this distinction for reasons of practical policy

and, in this respect only, legal interpretation differs from the way we would

interpret utterances in ordinary life. The boundaries of this exception are in some

respects unclear. But this is not the occasion on which to explore them.

(4) The meaning which a document (or any other utterance) would convey to a

reasonable man is not the same thing as the meaning of its words. The meaning of

words is a matter of dictionaries and grammars; the meaning of the document is

what the parties using those words against the relevant background would

reasonably have been understood to mean. The background may not merely enable

the reasonable man to choose between the possible meanings of words which are

ambiguous but even (as occasionally happens in ordinary life) to conclude that the

parties must, for whatever reason, have used the wrong words or syntax…

(5) The ‘rule’ that words should be given their ‘natural and ordinary meaning’ reflects

the common sense proposition that we do not easily accept that people have made

linguistic mistakes, particularly in formal documents. On the other hand, if one

would nevertheless conclude form the background that something must have gone

wrong with the language, the law does not require judges to attribute to the parties

an intention which they plainly could not have had. Lord Diplock made this point

more vigorously when he said…

‘…if detailed semantic and syntactical analysis of words in a commercial

contract is going to lead to a conclusion that flouts business common sense,

it must be made to yield to business common sense’”

123. Commenting on these principles O’Donnell J. in Law Society v. MIBI stated:

“8. These principles represent a significant staging point in the development of what

might be described as a modern approach to the interpretation of contracts, a

development which, as the principles recognise, has not necessarily reached its

terminus. The common law is treated as a coherent and consistent body of law

developing incrementally by subtle changes, and only on occasion by sharp and

dramatic turns. It is sometimes only after a period of time that the significance of

a development is understood and it becomes apparent that the direction of the law

has altered considerably. The modern approach to the interpretation of contracts is

one which would probably be unrecognisable to, and might be regarded as heresy,

by the Victorian judges who expounded so confidently on commercial matters. In

my view, it is important to understand the full import of the changes wrought by

the approach set out in Investors Compensation Scheme Ltd. V. West Bromwich

Building Society. It is also necessary to be aware of the significance of this

development for the overall approach to the interpretation of agreements, and not

to simply mix and match authorities drawn from different eras and contexts, as if

they were a body of coherent rules produced by a single author. For example, the

“rule” that where a recital and an operative part of a deed conflict that the

operative provision must prevail, is like the “rule” referred to by Lord Hoffman that

Page 55 ⇓

words should be given their “natural and ordinary meaning”, no more than an

expression of common sense about the manner in which we communicate. It is not

an iron rule, particularly if it may not have been present to the mind of the parties

when making their agreement. To take a homely example, if in agreement it is

recited that a landowner wishes to have ragworts removed from a specified field,

and the operative provisions says in general language that he will pay a certain

amount per 100 ragworts delivered on a given day, no one would suggest that this

entitles the other party to produce an unlimited number of ragworts from any other

location and demand payment. In that case of course it might be said that there is

no true conflict, but rather that the recital can be read harmoniously with the

operative provision as indicating the scope of the agreement. But this itself

illustrates the importance of approaching the Agreement in a holistic way rather

than having immediate resort to case law.

9. A contract is a form of communication intended to convey the meaning agreed

upon by the parties. Words are the vehicle through which that meaning is conveyed

but the earning of a document is much more than the meaning of the word. It is

what the parties would reasonably have been understood to mean from a

consideration of all the available guides to the meaning of the agreement. Words

are an important and very often the only necessary guide to discerning the

meaning, but they are only a guide, and as recognised by Lord Hoffman, they can

be ambiguous, and sometimes even, as happens in real life, it may be apparent the

parties have for whatever reason used the wrong words or syntax. In those

circumstances, the words must give way.”

In that case the Law Society argued that no reliance should be placed upon the preamble

to the MIBI Agreement, on the basis that where recitals are at variance with the operative

part the latter must be treated as “officious”. O’Donnell J. stated: -

“34. I cannot accept this argument. I rather question whether this Victorian certainty is

applicable here at least to exclude the question in limine. The judgment cited

expresses the common sense view that the parties will pay particular attention to

the operative provisions of a contract, which are likely to be more specific than any

generalisation in the preamble or recitals. Where there is a clear conflict between

such general descriptive provisions and specific operative provisions, then effect will

normally be given to the operative provisions applying that presumption. But the

question here is whether there is such an inconsistency or rather whether the two

can be read consistently which is what one would normally expect. Put more

simply still, the question for the Court is perhaps why would the parties describe

this Agreement in inadequate and misleadingly narrow terms, if indeed the

agreement has the broad and generous sweep for which the Law Society contends?

To my mind, it is an inadequate answer to this question to merely cite Victorian

authority.”

Page 56 ⇓

124. O’Donnell J. went on to emphasise the importance of the context in which a contract is

concluded, stating, at paragraph 13 of his judgment: -

“…It is important to remind ourselves, that the process is not the deconstruction of

a text, but rather the interpretation of an agreement. Parties undoubtedly seek

clarity of language, but they do not do so as an end in itself. The focus of the

parties is an agreement, normally commercial, which they consider is to their

benefit that is the context in which the words are used, and in which they must be

interpreted.”

125. Even more recently in Jackie Greene Construction Limited v. IBRC in Special Liquidation

[2019] IESC 2 Clarke C.J. emphasised the importance of construing words in context -

“5.2 The more recent authorities in this area suggest that the detailed rules for the

proper approach to the construction of contractual documents all derive in

substance from the approach which can be encapsulated in the phrase ‘text in

context.”

He continued, in para. 5.4

“5.4 As is clear from those authorities, it is important to give due recognition both to the

text of any document creating legal rights and obligations and to the context in

which the words used in the measure concerned were chosen. To fail to give

adequate weight to the words is to ignore, or downplay, the fact that those were

the words that were chosen to define the relevant legal arrangement. To fail to give

adequate weight to context is to ignore the fact that all language is inevitably

interpreted by reasonable persons in the light of the context in which that language

is used.”

126. In support of their contention that Recital 2.3 imposes on the Developer a legal obligation

to complete the development of the estate the defendant also relied on Lewison in The

Interpretation of Contracts (6th Ed., 2017) where the following principle is stated at

s.10.15: -

“In an appropriate case the court may interpret a recital as carrying with it an

obligation to carry into effect that which is recited.”

And the further statement from the authors that: -

“Any words in a contract which show an agreement to do a thing amount to an

obligation. No special language is necessary.”

One authority relied upon for these statements is Aspidin v. Austin [1844] 1 Q.B. 671,

where Lord Denman stated: -

“Where words of recital or reference manifested a clear intention that the parties

should do certain acts, the courts have on these inferred a covenant to do such acts

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and sustained actions of covenant or no-performance, as if the instruments had

contained express covenants to perform them.”

The defendants also cite in support of these propositions Samson v. Easterby [1830] 9

B.& C. 505, and a more modern expression of the approach found in the judgment of

Flaux J. in Mr. HTV Limited (formerly known as Can Associates TV Limited v. ITV2 Limited

[2015] EWHC 2840, (Comm), where he stated:

“38. In any event, it seems to me that the point about commitment being “pre-

operative” is a non-point on analysis. As Mr. Nambisan submitted, it is well

established that, where the wording of a recital manifests a clear intention that the

parties should do certain acts, the Court may infer from that wording a covenant to

do such acts as if the instrument had contained an express agreement to that

effect, citing Chitty on Contracts 31st Ed. [13-025]. Furthermore, where there is

ambiguity within the operative parts of a contract and a recital is clear, the recital

will govern the construction of the contract: see per Lord Eshmer MR in Rey Moon

[1886] 17 QBD 275.”

127. It seems to me that the approach taken by the Supreme Court evident from Law Society

v. MIBI, and in Jackie Greene Construction Limited v. IBRC establishes general principles

which reflect the succinct statements in Lewison, and the position taken in the UK case

law just mentioned, and I propose to apply these principles.

Construing the Management Agreement

128. The context in which the Management Agreement was entered into was the prior

purchase by the first and second named plaintiffs of the land in Maynooth on which they

planned to develop a business park. For this purpose they borrowed and provided various

securities including entering into the Deed of Mortgage with AIB dated 1st September,

2000. It should be noted that the Debenture entered into by the Developer Glenkerrin on

10th September, 2003 post-dated the Management Agreement and was not therefore

part of the “context” for the earlier agreement. A further part of the context was the

incorporation of the defendant for the purpose of being the management company in

respect of the proposed Campus.

129. Evidence was given by Mr. Damien Maguire solicitor, whose office prepared the

Management Agreement, and Elaine O’Keeffe a solicitor in the same firm also involved in

the preparation of the Management Agreement, and evidence was also given by the

second named plaintiff who was called on behalf of the defendants, and part of whose

evidence related to the making of the Management Agreement. Although these witnesses

were asked to remember matters occurring 18 years ago for the most part I believe their

recall was good, and I accept their evidence as truthful (save where I expressly indicate

doubt). The evidence of these witnesses as to background and “context” is taken into

account, but I am careful to exclude from my consideration evidence given by any of

these witnesses as to the negotiations or declarations of subjective intent leading to the

execution of the Management Agreement, which can have no bearing on the true

construction of that agreement.

Page 58 ⇓

130. The firm of Damien Maguire & Company Solicitors acted for all three parties i.e. the first

and second named plaintiffs as owners/vendors, Glenkerrin Homes Limited as “Developer”

and the defendant as the “Purchaser” when the Management Agreement was prepared

and executed. I am satisfied that this was accepted conveyancing practice at the time.

The defendant was incorporated specifically for the purpose of becoming Management

Company in respect of the estate common areas of the business campus. The

Management Agreement was prepared by Mr. Maguire based on precedent conveyancing

documentation, and most importantly it formed part of a suite of title documents some of

which were to be executed at or prior to closing on the sale or lease of units in the

campus.

131. It is clear that the primary objective of the Management Agreement was to ensure the

smooth transfer of the estate common areas to the management company at the

completion of the development, thus ensuring that once the development was complete

each unit holder enjoyed the benefit of easements granted to them, and the burden of

service charges imposed on them, and would continue to enjoy those rights and have

those obligations under the Leases of Easements and as members of the management

company. Thus, and entirely logically, within the suite of documents is the Lease of

Easements that it was intended would be entered into between the Developer of the first

part, the defendant Management Company of the second part and the purchaser of the

third part, granting various easements including parking rights to the unit purchaser,

requiring the lessee/unit purchaser to become a member of the Management Company,

ensuring that the Management Company would have obligations to maintain the common

areas once transferred to it by the Developer, and including provisions relating to

maintenance and renewal of the common areas and the levying of service charges on unit

purchasers both prior to and subsequent to the completion of the transfer of the common

areas to the Management Company.

132. Also part of the suite of documents was a Deed of Covenant intended to be entered into

by each unit purchaser with the Management Company and the Developer, containing

covenants on the part of the unit purchaser binding it to comply with various restrictive

and negative covenants (such as to pay rates and taxes and the estate service charge,

and to keep their unit lands in good repair), and covenants on the part of the Developer,

and after the transfer of the estate common areas, the Management Company, in

accordance with the Third Schedule dealing with the levying of estate service charges,

and the provision of services such as repair maintenance and renewal of estate common

areas.

133. As Mr. Maguire states, in para. 3 of his Witness Statement: -

“The Management Company was set up by the Developer and Agreement for Sale

dated 6 April 2001 (the Management Agreement) was based on a precedent

conveyancing document and it was prepared by me and signed by all parties at an

early stage of the development of the Maynooth Business Campus. The

Management Agreement formed part of the title documents presented to

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prospective purchasers’ solicitors – it was an essential component of the title as it

imposed a legal obligation on the Developer that, on its completion of the

development and the sale of the last unit, it would transfer the Estate Common

Areas (as herein defined) to the Management Company which is also a party to

each purchaser’s title by way of an additional document entitled a Lease of

Easement. This is to ensure that all owners in the Business Campus were bound by

similar covenants and conditions. Without a functioning Management Company,

the purchasers would not have good marketable title to their property and it would

not be possible to sell any of the units in the Business Campus.”

Similar evidence was given by Ms. O’Keeffe, who indicated that both she and Mr. Maguire

took instructions for the Management Agreement, and both were very much involved with

the clients. Her evidence was that she was very involved in the preparation of the Lease

of Easements.

134. In his evidence Mr. Danny Grehan confirmed that the reference in Recital 2.1 of the

Management Agreement to the property comprised within Folio 34112F of the Register of

County Kildare is a reference to the land upon which it was intended that the Campus

would be developed. He referred to Recital 2.3 which states: -

“2.3 The Developer will complete the development of the Estate in accordance with the

plans and specifications produced to the Purchaser and shall lease all the units/sites

on the Estate and on the demise of the last unit/site, - …”

135. Mr. Grehan confirmed that the plans and specifications were in existence at the time the

Management Agreement was entered into, and that these were those in respect of

Planning Permission had been granted for the development. A copy of this was handed in

and shows that planning permission was granted by Kildare County Council on 6th

December, 2000, and Condition 1 stipulates –

“1. The development shall be carried out in accordance with the documentation and

drawings submitted to the Planning Authority on 26/11/99 and where superseded

by details submitted on 19/05/00, except where altered or amended by conditions

in this permission.”

136. Mr. Grehan was asked about Clause 3.6 of the Management Agreement which provides: -

“3.6 Notwithstanding that the Estate is in the process of being developed as a Business

Park the Developer may alter the development as the Developer sees fit and there

is reserve to the Developer full right and liberty to alter the Development as a

Developer may think fit and to reserve to the Developer full right and liberty to vary

the location, layout and extent of the Estate, the sites on it, the car parking spaces

and the Estate Common Areas including the exclusion of any additional lands.

Accordingly, the Developer may make Lease Assignments, Transfers or Assurance

of any part or parts of the Estate free form [sic] any conditions or covenants

contained in any Lease or Management Agreement.”

Page 60 ⇓

He was asked what this clause meant to him in his capacity as a Developer and he

answered:-

“From the, I suppose, commercial approach to a development like a business

campus or any other major development, if market forces change reasons or sizes

of buildings I mean you have to…maybe you have a client that wants a 60,000

square foot building and you have two 40,000 square foot buildings. You may seek

planning permission to accommodate them in one building and be reserved the

right to do so…you would need, you would need planning consent to alter a building

in any regard and if a building was started well anything that is started is presumed

to be done as per specs…modifications would be something that would come into it

if you had a situation whereby somebody was modifying a building rather than

making it bigger, but you would need planning permission to change any

footprints.” (Day 4 pp. 5-16).

137. Under cross examination Mr. Grehan agreed that there were no negotiations as such

between the first and second named plaintiffs and the Developer or Management

Company prior to the Management Agreement being entered into, but he said the

Management Agreement would have been discussed with their solicitors. He agreed that

he was a Director of Glenkerrin and a Director of the defendant. His brother Mr. Ray

Grehan was also a Director of both companies. He also agreed that over time

approximately fifty leases of easements had been entered into by unit purchasers and

were registered in the Folio, and he agreed that the terms of each of these were

substantially the same. While Mr. Grehan gave much more evidence in relation to the

Management Agreement and Lease of Easements this largely reflected his subjective

views as to the meaning of these documents and did not relate to the “matrix effects” or

context in which the Management Agreement was entered into.

138. Mention should be made of expert conveyancing evidence called by both parties in which

points were made and opinions expressed as to the correct construction of the

Management Agreement. The plaintiffs called Mr. Patrick Sweetman, a consultant in

Matheson Solicitors, with extensive commercial and conveyancing experience over a wide

range of property transactions. The defendants called Ms. Suzanne Bainton, a partner in

Liston & Company Solicitors with whom she has practiced since 1998. Both of these

individuals are members of the Conveyancing Committee of the Law Society – Mr.

Sweetman is currently in the Chair and Ms. Bainton is a former Chairperson.

139. While I accept that both these witnesses have the requisite experience and expertise, and

would have been familiar with conveyancing practice in 2001, for a number of reasons I

find their evidence on this aspect to be of little assistance. The main reason for this is

that it is the court that must construe the Management Agreement, and should do so by

reference to the actual words used and the context in which the Agreement was made.

This is not a case of expert determination, and the opinions of experts, wise though they

may be, cannot substitute for the court’s objective decision.

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140. Further, conveyancing practice at the time – on which subject the experts in fact differed

– has little or no relevance to the proper construction of this particular document. This is

not a case where the court is asked to construe ‘words of art’, with an accepted special

meaning to conveyancers at that time.

141. Thirdly, while both experts gave evidence in relation to whether Recital 2.3 could

constitute a covenant by the Grehans/Glenkerrin to complete the development, neither

expert was aware of the recent decision in Law Society v. MIBI, and in particular neither

had considered the judgment of O’Donnell J. where he deals with the possible status and

import of a recital when considered in context with the operative parts.

142. There is a further reason for attaching little weight to Mr. Sweetman’s evidence on the

issue of construction of the Management Agreement. This is because the plaintiff’s

instructing solicitors asked him to address a number of specific questions, which he dealt

with, but none of these caused him to address Clause 3.7. In response to the court he

stated “I didn’t at the time put any particular significance on the incorporation of the

general conditions of sale” (Day 3, p. 39), and he agreed that it didn’t feature in his

Witness Statement, and that he only looked at it after he read Ms. Bainton’s witness

statement. Accordingly, from the outset Mr. Sweetman did not consider the Management

Agreement as a whole. Interestingly when cross-examined in relation to Clause 3.7 Mr.

Sweetman, described it as a “planning warranty” and stated that “It is not something that

a Developer would ever do intentionally…it would be unusual for a Developer to give a

planning warranty to a Management Company. It has been done here because they

haven’t excluded it.” (Day 3, transcript pp. 42-43). Later in his evidence he confirmed

that his reference to incorporation of the “planning warranty” included the Building

Regulations – and that he used the term “as a catch-all to mean planning and building

control”. (Day 3, transcript p. 49). He further agreed that on the Transfer pursuant to

the Management Agreement the transferors would have to “produce evidence of

compliance”, and that “the Management Company would be entitled to insist on them”.

(Day 3, transcript p. 51).

Discussion

143. The first thing to observe is that the wording of the Management Agreement of 6th April,

2001 points to the interaction between Management Agreement and the Lease of

Easements, the form of which Mr. Maguire and Ms. O’Keeffe confirmed had been drafted

in advance of 6th April, 2001. Although the Management Agreement does not specifically

refer to “lease of easements”, the definition of “Estate Service Charge” in Clause 1.5

refers to –

“the aggregate costs, expenses and outgoings paid, or incurred to be paid or

incurred by the Developer in discharging its obligations under the Fourth Schedule,

Part 1 of the Management Agreement.”

There is no Fourth Schedule in the document, which only has two short schedules,

descriptive of the Estate Common Areas and the Title, and not in any way related to

‘obligations’. However, the Fourth Schedule, Part 1 in the Sandwell Lease of Easements

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(to take as an example) sets out the covenants by Sandwell Developments Limited in

relation to the payment of rent, rates and taxes etc., including, at Clause 1.9, Estate

Service Charges payable to the “lessor or after the transfer of the Common Areas to the

Management Company.”

There is a further reference in Recital 2.2 in the Management Agreement that confirms

the interaction, or future interaction between the Management Agreement and

prospective purchasers or lessees of units within the business campus. It reads: -

“2.2 The Developer has laid out the estate for development as a commercial business

campus and intends to lease sites in the Estate to prospective purchasers and to

enter into leases and Management Agreements similar in form to the draft Lease

and Management Agreement furnished as part of the execution of this Agreement

or on such other terms as may be agreed between the Developer and prospective

purchasers or lessees.”

144. While this judgment adopts the term “Management Agreement” to refer to the agreement

dated 6th April, 2001, in Recital 2.2 this term appears to be a further reference (as in the

definition Clause 1.5), to Leases of Easements intended to be entered into by purchasers

or lessees of units. Also while Recital 2.2 appears to contemplate such purchasers

entering into leases, it goes on to contemplate that they may be “purchasers or lessees”.

Similar terminology is adopted in Clause 3.1, which is the operative provision placing the

primary obligation on the Grehans and Glenkerrin to transfer the freehold interest in Folio

34112F, County Kildare to the defendant “subject to and with the benefit of the Leases

and Management Agreements which are to be granted by the Developer and subject to

the rights of the Purchaser and its members.”

145. There are further references to “Management Agreement” in operative Clauses 3.3, 3.4

and 3.6 which can only be meaningfully read as references to the Leases of Easements

intended to be entered into by purchasers or lessees of sites or units within the business

campus.

146. I am satisfied therefore that the references to “Management Agreement” in clauses 1.5,

2.2, 3.1 3.3 and 3.4 must, in order to render these clauses and the entire agreement

dated 6th April 2001meaningful, be read as referring to the Lease of Easements that had

been drafted and furnished prior to execution. This was not a matter of controversy

between the parties.

147. The defendant relied on Recital 2.3, in combination with the obligation on completion to

comply with Clause 3.7 and provide appropriate certificates under General Condition 36 of

the Law Society General Conditions of Sale (1995) Edition, to assert that the Developer is

obliged to complete the carpark, which it is accepted forms part of the “estate” to be laid

out and developed as a business campus, and which definition includes “estate common

areas” which include the carpark. In opposing this construction, the plaintiffs relied

principally on Clause 3.6 of the Management Agreement, which it was said conditions the

effect of Recital 2.3.

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148. Operative Clause 3.6 is quoted above. It clearly does entitle a Developer to alter the

development of the Estate “as the Developer sees fit”, and the Developer reserves to

itself the right to “vary the location, layout and extent of the Estate, the sites on it, the

car parking spaces and the Estate Common Areas including the exclusion of any additional

lands”. The second sentence “accordingly” empowers the Developer to make leases or

assurances of part of the Estate “free form [sic] any conditions or covenants contained in

any Lease or Management Agreement.”

149. This is a significant empowerment that was clearly intended by the parties to give

flexibility to the Developer to alter the planned Campus in the course of its development.

As pointed out by Mr. Grehan in evidence this may prove commercially useful if the

demand on the market place for a particular type of unit or development changed from

that for which planning permission was originally obtained. Any such change in

development would of course require new planning approval. This all makes commercial

sense.

150. There was in fact no evidence that the Developer availed of the power in Clause 3.6, or

that there was any variation in the planning permission and particularly that part of the

permissions that pertained to the carpark which was developed and probably completed

in 2003. While undoubtedly Clause 3.6 is an important power reserved to the Developer,

it does not conflict with the obligation, asserted by the defendant, on the Developer to

complete the development in accordance with plans and specifications produced. In my

view that should be construed as the overriding obligation whether the development of

the estate is (as happened) carried out in accordance with the original planning

permission plans and specifications, or whether it is carried out with alterations, whether

in the development, location, layout or extent of the estate, as contemplated by Clause

3.6.

151. In either case the commitment to complete in Recital 2.3 can be construed harmoniously

with Clause 3.7 in the operative part, in placing on the Developer the overriding obligation

to complete the development of the estate in accordance with planning permission and

building regulation/bye-law approval such that at the time of the transfer the Developer is

in a position to furnish appropriate certificates in relation to Planning and Building Control

Act/Regulations compliance.

152. I agree with the defendant’s submission at para. 11 of their Closing Submissions that –

“…This construction permits for a coherent and consistent construction of Clause

2.3 and 3.6 of the Management Agreement such that the Developer has an

entitlement to vary the development of the campus (Clause 3.6), but that which it

does build it must complete (Clause 2.3).”

To put it another way, it would not be consistent with the Developer’s commitment to

completion if it was entitled to rely on Clause 3.6 as a justification for failing to complete,

or failing to complete properly and in accordance with planning and building control

requirements, estate common areas including a carpark where there has been no

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alteration of the development and no planning permission has been sought for such

alteration.

153. In fact even Mr. Sweetman’s evidence did not support the plaintiff’s reliance on Clause

3.6, when he stated (Day 4, p. 15) –

“A. The Developer has a right to vary but he can’t do so in ignoring the rights to third

parties that he has already granted, and as the carpark has been licensed out to

various unit owners, it can’t, having integrated it as part of the estate then use that

clause to extract it again. The provisions of that clause say that where it is decided

not to develop part of the estate that it can be excluded from it, rather than to say

some part that had been part of the common areas I am now taking away, because

maybe the management company couldn’t complain in the circumstances, but

every unit owner who had relied on and taken lease of easements on the basis of

the common areas, would object.”

Of course ex post facto evidence is not an aid to construction of the Management

Agreement, but this illustrates the confines of Clause 3.6.

The standard to which the Management Agreement requires the Estate Common Areas

to be completed

154. The second issue is the standard to which the Developer must complete the development

of the estate, including the carpark and Estate Common Areas. Having regard to the

evidence and admissions made in the course of the hearing it is no surprise that in the

plaintiff’s Closing Submission the following concession is made: -

“8. It is important to note that there is no contest that the Developer has an obligation

to complete the development in accordance with planning specifications, building

regulations and bye-laws at the time of the development, which includes health and

safety regulations because of the incorporation of the General Conditions.

Therefore, the Counterclaim Terms cannot be required for that purpose.”

155. What the plaintiffs continued to resist were the defendant’s claims pleaded in the

amended defence and counterclaim at paras. 7.2 – 7.4, and 31.1 and 31.2, which may be

restated as follows: -

“A. Prior to the acquisition of the Estate Common Areas by the Defendant, Glenkerrin

Homes is required to complete the development of the Estate as a business park

and the Estate Common Areas therein, in accordance with the plans and

specifications thereof, to a good and workmanlike standard free from defects and in

accordance with the applicable grant of planning permission, building regulations

and standards, and such that the Estate Common Areas do not pose a health

and/or safety risk to the occupiers of the Estate or members of the public.

B. The defendant is neither required or obligated to require the Estate Common Areas

until such time as Glenkerrin Homes has completed the development of the Estate

as a business park and the Estate Common Areas therein in accordance with the

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plans and specifications thereof to a good and workmanlike standard free from

defects and in accordance with the applicable grant of planning permission, building

regulations and standards, and such that the Estate common Areas do not pose a

health and/or safety risk to occupiers in the Estate or members of the public.”

[Emphasis added].

156. In light of the concession just referred to it is the words in italics to which continued

objection was taken. It was argued on the plaintiff’s behalf that reading in the words “to

a good and workmanlike standard free from defects” goes far beyond what is required by

the incorporation of General Condition 36.

157. I agree with the submission that the standard defined by the words “to a good and

workmanlike standard free from defects” cannot be read into the Management Agreement

by virtue of incorporation of General Condition 36. The key wording in that General

Condition has been referred to earlier in this judgment, and nowhere does it make

reference to such a standard. In summary it is: -

(1) A warranty by the vendor that the development is compliant with planning

permission and building bye-law approval;

(2) an agreement by the vendor to furnish copies of all Fire Safety Certificates and

Commencement Notices under the Building Control Act 1990;

(3) an agreement that the vendor will on completion furnish confirmation of compliance

with all financial contribution or bonds conditions of any permission or approval;

(4) an agreement by the vendor on completion to furnish the certificate or opinion of

an architect or engineer that the development has been “carried out in substantial

compliance” with permissions and approvals; and

(5) a warranty by the vendor that “there has been substantial compliance” with the

provisions of the Building Control Act, 1990 or any regulations from time to time

made thereunder, supported by the certificate or opinion of an architect or an

engineer.

158. This is the express extent of the Developer’s obligations under the Management

Agreement, and it is implicit from the incorporation of this provision that upon completion

of the Transfer the Developer will have completed the development in accordance with

the standards required in all relevant planning permissions and approvals and all relevant

parts of the Building Control Act 1990 and any regulations made thereunder to the

standard required for certification. Insofar as that Act or those regulations sets standards

as at the date of construction, it is these standards that the Developer must comply with,

and in respect of which confirmation certificate, opinions or Fire Safety Certificates must

be furnished prior to completion, and not any other or higher standard. The defendant’s

argument in relation to an express term, or a term “to a good and workmanlike standard

Page 66 ⇓

free from defects” that must be “read in” based on the Management Agreement wording

and General Condition 36 must therefore fail.

159. The defendant argues in the alternative that the standard “to a good and workmanlike

standard free from defects” should be implied. This argument does not stand up to

scrutiny. In Sweeney v. Duggan [1997] 2 IR 531, the Supreme Court set out the test for

the implication of terms and the principles were set out by Murphy J. at p. 538: -

“There are at least two situations where the courts will, independently of statutory

requirement, imply a term which has not been expressly agreed by the parties to a

contract. The first of these situations was identified in the well-known case The

Moorcock (1889) 14 P.D. 64, where a term not expressly agreed upon by the

parties was inferred on the basis of the presumed intention of the parties. The

basis for such a presumption was explained by MacKinnon L.J. in Shirlaw v.

Southern Foundries (1926) Limited [1939] 2 K.B. 206, at p. 227 in an expression,

equally memorable, in the following terms: -

“Prima Facie that which in any contract is left to be implied and need not be

expressed is something so obvious that it goes without saying; so that, if,

while the parties were making their bargain, an officious bystander were to

suggest some express provision for it in their agreement, they would

intensely suppress him with a common ‘oh of course’”

160. Further in Meridian Communications v. Eircell Limited [2002] 1 IR 17, O’Higgins C.J. also

summarised the principles that govern the identification of an implied term in an

agreement as follows, at p. 40: -

“- before a term will be applied in a contract it must be necessary to do so, and not

merely reasonable;

the term must be necessary to give business efficacy to the agreement;

it must be a term that both parties intended, that is, a term based on the presumed

common intention of the parties;

the court will approach the implication of terms into an agreement with caution;

there is a presumption against importing terms into a contract in writing and the

more detailed the terms in agreed in writing the stronger is the presumption

against the implication of terms;

if the terms sought to be implied cannot be stated with reasonable precision, it will

not be implied.”

These principles were applied by the Court of Appeal in Flynn v. Breccia [2017] IECA 74.

161. I have already decided that the Management Agreement properly construed included an

obligation on the Developer to complete the development in accordance with plans and

Page 67 ⇓

specifications, and in accordance with the warranties and other commitments set out in

General Condition 36. The Management Agreement therefore expressly included terms

related to what was to be developed/constructed and the standard to which these works

were to be undertaken. Where this is covered by an express term it is very difficult to

see how the court could imply a term that is more onerous. How could it be said that

such an implied term was “necessary” where the contract already addressed works

specification, permissions and standards? Mr. Grehan in his evidence suggested that he

and the first named plaintiff would always have sought to develop common areas to a

high standard, and with good workmanship, because their good reputation as builders

depended on finishing developments properly and to a high standard, and he considered

this to be a commercial necessity. However, that is a subjective intention, and even if it

was the actual intention of the parties to the Management Agreement in 2001, it is not

necessarily the view that would be taken by “an officious bystander” viewing the

agreement as a whole.

162. In any event I am of the view that the distinction between the standard conceded by the

plaintiffs as being part of the agreement, and the higher standard contended for by the

defendants, ultimately has no relevance to the present case having regard to the findings

that I have already made - to the effect that the carpark as constructed was structurally

defective, and in breach of the Building Regulations 1991 or Building Regulations 1997,

the technical guidance document I.S. 326 of 1995 and, in effect, BS 8110 (1995), and my

finding that the condition of the carpark was always and remains such that the plaintiffs

cannot currently comply with General Condition 36.

Obligation to transfer under the Management Agreement

163. As has been seen Recital 2.3 stipulates that the Developer will complete the development

“…and shall lease all of the units/sites on the Estate and on the demise of the last

Unit/Site; – 3. IT IS HEREBY AGREED”. This indicates an intention that what follows in

the operative part is to occur after the last unit has been developed.

164. The operative part then provides: -

“3. IT IS HEREBY AGREED

3.1 that in consideration of the Purchaser assuming the Developer’s liability under the

Leases hereinafter mentioned and further in consideration of the sum of Ten

Pounds (IR £10.00) the Vendor as registered owner shall transfer and the

Developer as beneficial owner shall transfer and confirm onto the purchaser ALL

AND SINGULAR the freehold interest in ALL THAT AND THOSE that part of the lands

comprised within Folio 34112F of the Register County Kildare more particularly

described in the First Schedule hereto, subject to and with the benefit of the Leases

and Management Agreements which are to be granted by the Developer and

subject to the rights of the Purchaser and its members.

3.2 The transfer will be completed at the expiration of 28 days (twenty-eight days)

from the service of a notice requiring completion served by the Developer’s Solicitor

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on the Purchaser provided always that the notice will be served within the

Perpetuity Period. Completion will take place at the office of the Developer’s

Solicitor.”

3.3 Pending completion the Developer shall subject to the payment to it of the estate

service charge provided for in the Management Agreement, carry out all of its

obligations contained in the said Management Agreement and on completion all

service charges whether or in credit or in arrears shall be apportioned as between

the Developer and the Management Company as of the completion date.”

In the Definition section at Clause 1.2 “the Perpetuity Period” is defined to mean “the

period during the lives of the issue now living of His Britannic Majesty George V and for

21 years after the death of the survivor of such issue”.

165. The ordinary meaning of these words is that the lease or demise of the last unit triggers

the obligation on the first and second named plaintiffs as “vendors” to transfer the Estate

Common Areas to the Management Company, but the obligation to actually complete is

not triggered until the 28-day notice required by Clause 3.2 is served by the Developer’s

Solicitor.

166. At the date of hearing sales were agreed in respect of the last two units, including Block C

and the Link Building, but no 28-day notice had been served. It was therefore the

plaintiff’s contention that the vendor’s obligation to complete the transfer had not yet

arisen.

167. The defendants however placed reliance on a clause in the Lease of Easements. The form

of the Lease of Easements was one of the suite of documents prepared at the same time

as the Management Agreement, and, taking the Sandwell Lease of Easements as an

example, the Management Agreement is recited at Clause 3.3, and Operative Clause 2

provides: -

“The Lessor and the Management Company hereby covenant and undertake with

the Lessee to complete the Assurance pursuant to the Agreement for Sale of the

Common Areas as soon as practicable after the sale of the last Unit and in the

event of the Lessor being desirous of retaining any of the Units, the Lessor shall

take an Assurance of same as soon as practicable after completion of the sale of

the remainder of the Units and in any event within 60 days of same.” [Emphasis

added]

In the slightly different Leases of Easements utilised by the Receivers in respect of unit

sales after their appointment in 2011 there is a similar clause – Clause 5 in the operative

part - which provides: -

“5. The Lessor and the Management Company each hereby covenant and undertake

with the Lessee to complete the assurance pursuant to the Management Agreement

as soon as practicable after the sale of the last Unit and in the event of the Lessor

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being desirous of retaining any of the Units, the Lessor shall take an Assurance of

same as soon as practicable after completion of the sale of the remainder of the

units and in any event within 60 days of same. The Registered Owners covenant to

join in the aforesaid Assurance if required.” [Emphasis added]

It is only the earlier of these two documents that can be relied upon, on the assumption

that it follows the form of Lease of Easement that was furnished prior to execution of the

Management Agreement. As such its wording represents part of the ‘matrix of fact’ that

aids construction of the Management Agreement.

168. That being said the form of the Lease of Easement, although part of the suite of

documents prepared at the time of the Management Agreement and therefore part of the

context in which the Management Agreement was concluded, is not to be read as part of

the Management Agreement. There is no express provision, such as a term incorporating

the form of Lease of Easments, that would permit such a construction. Accordingly, if

Clause 3.2 is construed on its own its wording means that the defendant has no

entitlement to insist on service of a notice to compel completion of the transfer of the

common areas, and the timing of such transfer is within the control of the Developer who

can serve the notice at any time up to expiry of the Perpetuity Period.

169. However this raises the question whether such a narrowly based interpretation conflicts

with the intention of the parties which emerges from a reading of the Management

Agreement as a whole, and in particular Recital 2.3 which contemplates the transfer of

the common areas agreed in Clause 3.1 happening “on the demise of the last Unit/Site”.

There is an obvious tension between a strict construction of Clause 3.2 on its own without

reference to Recital 2.3, which envisages the assurance happening “on the demise of the

last unit” and not being deferred, potentially indefinitely, at the whim of the developer, if

a 28 day completion notice mentioned in clause 3.2 is not served.

170. Viewed another way, the narrow interpretation yields a result that is so commercially

lacking in common sense that it can only be regarded as absurd, and not one that any

commercially minded developer and management company would agree. If there was no

obligation on the developer to serve a 28-day notice within a reasonable time of the

demise of the last unit it would be open to Glenkerrin to decline or refuse to serve such a

notice for many years or decades, with the prospect that in the meantime Glenkerrin

might go into liquidation or be struck off for failing to file returns. Indeed this very

suggestion - that the developer was entitled to delay serving a notice indefinitely leaving,

in the court’s words, “the common areas forever more in the ownership of the

developers…” (Transcript Day 1, p.154) - was made by counsel for the plaintiffs in the

course of dialogue with the court. It might also enable the developer to side step the

obligation to complete the estate common areas in accordance with its contractual

obligations. Such a possibility would fly in the face of good estate management and

business efficacy, and cannot have been within the contemplation or intent of the parties.

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171. In my view this entitles the court to consider the wider suite of contemporaneous

documents – including the form of Lease of Easements that is referenced in clauses 1.5,

2.2, 3.1, 3.3, 3.4 and 3.6 - to ascertain the true intention of the parties.

172. When regard is had to the draft Lease of Easements, the parties’ real intentions become

clear: the covenant by Glenkerrin in Clause 2 of the form of the Lease of Easements “to

complete the Assurance… as soon as practicable after the sale of the last Unit” shows that

as soon as the last unit had been sold, the parties intended, and Glenkerrin covenanted

and undertook, to take the steps necessary on its part to complete the Transfer of the

Common Estate Areas “as soon as is practicable”.

173. Alternatively, if it were necessary to do so I would imply as a term of the Management

Agreement that “the Developer covenants and undertakes to serve such a notice

(requiring completion within 28 days) as soon as practicable after the sale or lease of the

last unit”.

Such an implied term passes the test set out in Sweeney v. Duggan by Murphy J.

If, while the parties were making the Management Agreement, an officious bystander

were to have suggested that the notice was to be served and the assurance to be

executed “as soon as practicable after the sale of the last unit” the parties would have

said “oh, of course”, and would surely have referred to the provisions of the draft Lease of

Easements.

Accordingly in the alternative I would find that the implication of such a term is necessary

in order to give business efficacy to the Agreement, and that it is a term that the parties

intended or maybe presumed to have intended, based on the content of Clause 2 of the

draft Lease of Easements.

Alternative reasoning

174. Even if such a term were not to be implied, independently of the Management Agreement

Glenkerrin has in fact, in all of the Leases of Easements (there are some 55 units in all, 3

of which are combined in one ownership), expressly covenanted and undertaken with

each of the lessees or unit purchasers to complete the assurance pursuant to the

Management Agreement “as soon as practicable after the sale of the last Unit”. While

strictly speaking this is a covenant and undertaking between Glenkerrin and the

defendant on the one part, and each lessee on the other part, its importance cannot be

overstated. It means that each and every unit lessee or owner would be entitled, after

the sale of the last unit, to take proceedings for breach of covenant against Glenkerrin

and seek appropriate mandatory relief if, after the passage of a reasonable period of time

to allow for the “practicalities” to be addressed, no clause 3.2 completion notice was

served. It should also be noted that in the Leases of Easements executed after the

appointment of the Receivers in 2011, all of them were entered into by, inter alia,

Glenkerrin as “lessor”, and by the Receivers as “joint statutory receivers”, and in the

operative part the demise was made by “the lessor or acting by the joint statutory

receivers” and “the Registered Owners acting by the joint of statutory receivers”

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175. In pointing this out I am mindful of clauses 15 and 16 which provide: -

“15. It is hereby expressly agreed and declared that nothing in this Lease will prejudice

or affect the estate, person or properties of the Joint Statutory Receivers who join

in this Lease solely in their capacity as Joint Statutory Receiver aforesaid and not

otherwise.

16. The Lessee hereby acknowledges and accepts that the [sic] each of the Joint

Statutory Receivers is executing this Lease in their capacity as Joint Statutory

Receiver only. For the avoidance of doubt, the Lessee hereby acknowledges and

agrees that the Joint Statutory Receivers shall not have any personal liability under

or in connection with this Lease or under any document executed pursuant to this

Lease in any respect.”

176. The purpose and effect of these clauses is to protect the Receivers and their property and

estates from any personal liability. It does not necessarily follow that a Lessee would not

have an entitlement to join them in an action to compel performance of the Management

Agreement, or to obtain orders against them for the purposes of ensuring implementation

of any order that might be made against the developer.

177. I am satisfied therefore that Glenkerrin is bound to take all necessary steps to complete

the Assurance pursuant to the Management Agreement “as soon as practicable after the

sale of the last Unit”. This means that the 28-day notice referred to in Clause 3.2 must

be served by the developer “as soon as practicable after the sale of the last unit”.

178. In that the sale of the last unit has taken place the time for service of such a notice can

be described as “imminent”. However insofar as Glenkerrin/the Receivers have the

obligation to complete the common areas by remedying the structural defect in the

carpark first, the time for service is postponed until such remedial work is carried out,

whereupon the service of such a notice is rendered “practicable” because certification can

be provided on closing.

Had the defendant a duty to execute the Lease of Easements in respect of Block C/The

Link Building

179. The Management Agreement does not in terms mandate that the defendant enter into

Leases of Easements. However, Recital 2.2 refers to the Developer’s intention to develop

the estate as a commercial business campus and to lease sites to prospective purchasers

“and to enter into leases and Management Agreements similar in form to the draft lease

and Management Agreement furnished part of the execution of this Agreement or in such

other terms which may be agreed between the Developer and prospective purchasers or

lessees.” Further, the operative Clause 3.1 stipulates that Ray and Danny Grehan as

registered owners are to transfer the Estate Common Areas “subject to and with the

benefit of the Leases and Management Agreements”. The Management Agreement

referred to is the draft form of Lease of Easements, and this form of Indenture includes as

parties Glenkerrin, the defendant as “the Management Company” and the unit purchaser.

Page 72 ⇓

180. It is therefore apparent that it was intended by the parties to the Management Agreement

that the defendant would be a party to and would execute all Leases of Easements in the

form “furnished prior to the execution of this Agreement”. Although not a relevant

consideration in the construing of the Management Agreement, the defendant did in fact

execute Leases of Easements in respect of all sales prior to 2011, and following the

appointment of the Receivers the defendant continued to execute similar Leases of

Easements up to the point that it declined to execute the Lease of Easements in respect

of the sale of Block C/The Link Building.

181. But was the defendant legally obliged to execute that Lease of Easements? Mr.

Sweetman’s opinion was that “good estate management would require that the

management company to join in each Deed of Lease of Easments” (Witness Statement

para.5.2.2) and that this would be “generally accepted conveyancing practice” (para.

5.2.3). At hearing he indicated that sales of units were dependant on the Management

Company entering into Leases of Easements, and he stated (Day 3, pp. 23-24): -

“A. …it is critical in the context of the management structure, to my mind that the

Management Company executes the Lease of Easements. It is critical, not so much

from the point of view of the Developer in this specific instance curiously, but in the

context of the overall integrity of the Management Scheme, and the reason for that

is that the Management Company wants to be able to have a direct privity in

relationship with each unit owner, and that is more specifically important in the

context of collection of service charges, because if there is one unit owner who is

enjoying the benefit of the estate common facilities, but is not paying their service

charge contribution, is then liable, I should say to pay their service charge

contribution, that undermines the integrity of the entire scheme…”

And at p. 25 of the transcript he stated: -

“…to answer their specific question it is my view, that for the integrity of the

management structure it is absolutely essential that the Management Company join

in each of the Lease of Easements and has privity with each of the unit owners.”

Mr. Sweetman also accepted under cross-examination that the Receivers wouldn’t have

achieved a proper price for the sale of Block C unless they could provide a Lease of

Easements that would provide access to the common areas and use of the carpark,

although again this is not relevant to the construction issue.

For these reasons Mr. Sweetman gave as his opinion that the defendant was obliged to

execute a Lease of Easements by virtue of the Management Agreement.

182. Ms. Higgins, the plaintiff’s conveyancing solicitor, did not entirely agree. Under cross-

examination she accepted that “there is no specific obligation, there is no express

obligation” in the Management Agreement (Day 2, p. 69). However, Ms. Higgins stated

“but she had every reason to expect that [the Management Company] would sign [the

Leases of Easements] in a similar way as they had done so.”

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183. In closing submissions counsel for the plaintiff argued that it is inconsistent for the

defendants to assert a term or implied term that the assurance of the estate common

areas under the Management Agreement must be completed “as soon as is practicable”

after the demise of the last unit, based on clauses in the form of Lease of Easements, and

at the same time to deny an obligation to execute a Lease of Easements simply because

there is no express term in the Management Agreement in posing such an obligation.

184. There is force to Counsel’s argument. In my view the references in the Management

Agreement of 6th April, 2001 to “Management Agreement”, which I take to be references

to the form of draft Lease of Easements furnished prior to execution, taken in conjunction

with the suite of documents and in particular the draft form of Lease of Easements,

disclose the clear common intention of the parties that the Management Company would

execute a Lease of Easements in that form at the time each sale or demise of a unit in the

business campus was completed. Such common intention was clearly grounded in the

need to provide overall integrity to the management scheme, centred on the Management

Company in which each unit holder was to be a member, and which company had to be in

a position to carry out its functions including the levying and collection of state service

charges from all members.

185. I have come to the conclusion therefore that were it necessary for the court to determine

this issue, I would decide that it was an implied term of the Management Agreement that

the defendant would enter into Leases of Easements with purchasers of units being called

upon so to do, in the form of the Lease of Easement furnished prior to execution of the

Management Agreement “or in such other terms as may be agreed between the

Developer and prospective purchasers or lessees”. This is strongly implied by the wording

in the Management Agreement and its interconnection with the draft Leases of

Easements, and is necessary to give business efficacy to the Management Agreement.

186. However, it is doubtful whether the court needs to make such a determination for a

number of reasons. Firstly, as a result of the without prejudice settlement entered into in

respect of the interlocutory injunction application, the defendant in fact executed the

Lease of Easements in respect of Block C/The Link Building (the execution of such an

agreement with the purchaser of unit J1 was never raised as an issue). To that extent

the issue is moot.

187. Secondly, in the face of the refusal of the Receivers to address the structural defects in

the carpark, and given the fact that the proceeds of sale of Block C/the Link Building

represented the only fund from which the developer/the Receivers could ever fund

remedial work, in my judgment the defendant was entitled in all the circumstances to

decline to execute the Lease of Easements unless and until the plaintiffs provided

satisfactory undertakings to remedy the structural defects in the carpark, or at least, if

the sale proceeded, to hold the proceeds in escrow pending resolution of any dispute as

to responsibility to carry out and fund those works – which is precisely what the

defendant’s solicitors sought in correspondence prior to the institution of the proceedings.

Who has the obligation to remedy the structural defect in the carpark?

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188. Two arguments were made on behalf of the plaintiffs to suggest that this obligation did

not fall on the Receivers. The first was that the repair/renewal and capital costs are

captured by the estate service charges arising under the Lease of Easements, and are

therefore the responsibility of the defendant rather than the Developer. The second is

that the Receiver has no liability as it has not adopted the liabilities of the developer

under the Management Agreement. These are now addressed in turn.

(1) Leases of Easements argument

189. It was submitted that the structure of the Lease of Easements is such that repairs of

structural defects are covered by the Estate Service Charge, and that it is “manifest from

the Lease of Easements that the party that collects the Service Charges and takes the

benefit of them is the party that carries out the Services under the Lease of Easements”.

(Para. 52 of Closing Submission). In support of this the plaintiff relied upon the

uncontroverted fact that the defendant is the entity that is collecting the Estate Service

Charges.

190. The argument relied on principally on words highlighted below from the Seventh Schedule

of the Lease of Easements Part 2 of which provides: -

“The Lessor and after the transfer of the Estate Common Areas to the Management

Company then the Management Company covenant with the Lessee: -

(1) The Services subject to reimbursement by the Lessee of the Lessee’s share of

the Estate Service Charge to use all reasonable endeavours to provide the

following services in accordance with the principles of good estate

management.

1. As often as may be required to maintain, repair, cleanse and renew the

Estate Common Areas in all buildings, erections and fixtures on the

Estate Common Areas, if any, including the roads, paths, car parking

area, pipes, drains, water courses, sewers, cabling wires and other

conduits for passage of water, gas, electricity, telephone radio and

television transmissions, heating fuels and other services in, under or

passing through the Estate Common Areas.”

191. In addition reliance was placed on Clause 1.21 in Part 2 which provides: -

“Provision of such sinking fund or other reserve as the Lessor/Management

Company may reasonably deem fit for the replacement or renewal of the Estate

Common Areas or any part of them for the renewal, replacement or purchase of

other capital items, machinery or equipment in the Estate Common Areas…”

The argument made was that the highlighted parts of this provision clearly contemplated

Glenkerrin, or the defendant post-Transfer, charging unit holders in such a way as to

create a sinking/reserve fund for the purposes which would include repair, renewal or

replacement of the car park.

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192. The plaintiffs also relied on the words highlighted below in Clause 1.22 in Part 2 which

lists as one of the “Estate Services” in the Seventh Schedule: -

“The provision of such other Services including capital items as the Lessor or the

Management Company shall consider more properly and reasonably to be provided

for the benefit of the Estate and for the proper maintenance and servicing of the

Estate.”

193. The above quotations are from the Sandwell Lease of Easements but similar provisions

appear in Part II of the 7th Schedule in the TMT Digital Centre Limited Lease of

Easements, being a sample Lease of Easements entered into by the parties, including the

Receivers post-2011, at Clauses 1.1, 1.28, and 1.30.

194. The plaintiffs also relied upon the opinion of Mr. Sweetman, expressed on Day 3, pp. 85-

86 where the following exchange took place with the court: -

“Mr. Sweetman: I see that the service charges are drafted wide enough to capture

all works that may need to be done once development has been built, if you like. In

other words, while a service charge provisions deal with capital expenditure, I think

in any fair interpretation that must mean future capital expenditure, but other than

the initial provision of the development. The service charges are drafted wide

enough to capture and needs to be drafted wide enough to capture any issue that

may arise subsequently.

Mr. Justice Haughton: So all 47 unit holders will have to contribute if there is a

significant structural expenditure required in the car park. They will all have to

contribute, there will be no question of it falling just on the shoulders of Blocks A,

B, C, D, or whatever, or even fewer than that?

A. Yes, that is correct, Judge, and that would have been the case whether or not

the company had gone into receivership and would have been, in my view,

funded through the service charge regardless.”

195. I reject these arguments for a number of reasons. What is at issue in the present case is

a capital item, but it is not maintenance, repair or renewal of the car park as that might

be commonly understood. Rather it is a matter of completing the car park to a

satisfactory standard, as envisaged by the need to provide certificates of compliance in

accordance with General Condition 36 at the time of transfer of the Estate Common

Areas. The car park must be satisfactorily completed by the developer before the

obligation of maintenance repair or renewal falls on the shoulders of the unit holders/the

defendant as management company. Fundamentally the obligation to “repair, maintain

and renew” does not encompass the original capital expenditure required to complete the

development. This is clear from a reading of the Lease of Easements as a whole,

including the power to establish “sinking” funds for future capital expenditure on renewal

or replacement.

Page 76 ⇓

196. Secondly, the legal obligation to collect service charges, including charges required for

repair or renewal or create a sinking/reserve fund for replacement, rests with the

developer until the common estate areas have been transferred. As that transfer has yet

to occur the legal obligation remains with Glenkerrin.

197. The fact that de facto the defendant has taken responsibility for repair and maintenance,

and collects the service charges, does not alter this. Firstly, there was no evidence to

suggest that the defendant had in fact taken on responsibility for any capital project, still

less one concerned with making good structural defects in developed Estate Common

Areas. Secondly Ms. Rose Anne Grehan, who was an accountant and employee of the

defendant from 2005 to 2012 and has since then been the defendant’s operations

manager, and who I found to be a good and reliable witness, gave evidence that the

entry/exit to the basement of the car park was blocked off by Glenkerrin and this

remained the position until it was opened up by the Receivers’ agents in 2016. The

defendant did not have access until then, and since then the basement has remained

under the control of the Receivers/their agents, and their contractors who have

undertaken works which they consider sufficient to “commission” the basement for use as

a carpark. Thus it cannot be said that the defendant has taken over de facto control or

possession of or responsibility for the basement carpark. It has not even been possible

for the defendant to extend its public liability insurance to the basement, due to Travelers’

concerns over structural deficiency and safety – and it seems that the only insurance put

in place was organised by the Receivers. It is of note that Ms. Grehan requested sight of

this insurance in the context of the Receivers’ contractors entering and carrying out

works. Thus the Receivers remained in control of the car park, and in particular the

basement. The lack of merit in this argument is further pointed up by the fact that the

Receivers were billed by the defendant for service charges for Block C (ground floor) and

Unit J1, but these were outstanding at the time of the hearing.

198. There is a further reason why this argument is misconceived. Clause 1.31 in Part 2 of the

TMT Lease of Easements provides: -

“The provision of other Services including capital items as the Lessor or the

Management Company shall consider ought properly and reasonably to be provided

for the benefit of the Estate and for the proper maintenance and servicing of the

Estate. All costs and fees in relation to the above services must be reasonable and

competitive BUT PROVIDED ALWAYS notwithstanding any provision to the contrary

contained in this Lease they shall be excluded from the Lessee’s Service Charge

liability: -

1.31.1 The cost of any works to the extent that money has been or is

recovered from third parties in respect hereof;

1.31.2 All costs occasioned as part of the initial construction of the Estate or

the completion of any incomplete structural elements thereof;

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1.31.3 The enforcement of the provisions of any other lease of the Estate or

any other part of the Estate which are not for the benefit of other tenants or

occupiers of parts of the Estate;

1.31.4 Any costs and expenses associated with the making good of any

historic environmental contamination or structural deficiencies to any part of

the Estate.” [Emphasis added]

199. Accordingly, and given that this is a sample of the Leases of Easements entered into by

purchasers of units since 2011, there is an express provision, signed up to by all of the

plaintiffs including the Receivers, to the effect that the Estate Services covenants by the

Lessor, and after transfer of the Estate Common Areas by the Management Company, do

not cover costs occasioned on “the completion of any incomplete structural elements”

(1.31.2) or costs or expenses associated with “making good…structural deficiencies to any

part of the Estate” (1.31.4).”

200. The cost of remedying the structural deficiency in the car park comes fairly and squarely

within the provisions of Clause 1.31.1 and Clause 1.31.4, and therefore the other

covenants, in particular the primary covenant in relation to repair and renewal in Clause

1.1, simply cannot apply to purchasers of units since 2011. Further it would be invidious

if the court were to accede to the plaintiffs’ argument to the extent only that purchasers

of units prior to the appointment of the Receivers would through their service charges

have a legal obligation to discharge the cost of remedying the structural deficiencies in

the car park. By executing Leases of Easements since 2011 with Clause 1.31.1 the

Receivers and other parties were accepting, at least by implication, that unit holders and

service charges are not liable for the cost of remedying incomplete or deficient structural

elements in the Estate Common Areas, which are of course part of the Estate as defined

in the Lease of Easements. In my view the inclusion of this express provision estops the

plaintiff from pursuing any contrary argument.

(2) Can the Receivers disclaim the liabilities of the developer?

201. A second argument relied on by the plaintiffs was that, because the Management

Agreement, and any obligation assumed thereunder by the Developer in respect of

common areas including the carpark, predated the appointment of the Receivers, the

Receivers could disclaim the contract. In written Closing Submissions at para. 68 Counsel

relied on Forde, Kennedy and Simms, “the Law of Company Insolvency” (Third Edition), at

para. 5.30

“5-30 Unlike the situation in liquidations, there is no statutory mechanism whereby a

receiver can disclaim or repudiate onerous contracts. By “onerous” here is meant

obligations which would cost the company more to perform than the amount of

damages it would have to pay for breach of the contract. However, because these

contracts do not bind a receiver, he can simply prevent the company from

performing its obligations and thereby, in effect, disclaim the contract. When the

company does not fulfil its obligations, the other party has a right of action against

it for damages. But that claim ranks after the debenture, so that generally the

Page 78 ⇓

receiver is not concerned with the claim. In sum, therefore, unless the company

stands to make a profit from the contract, the receiver will not cause it to perform

its side of the bargain. For instance, in Macleod v. Alexander Sutherland Ltd, the

company sold land and undertook in the contract to perform specified building and

construction work on it. That work was never carried out, and the company was

placed in receivership. It was held that the company, through the receiver, could

not be compelled to perform that work. The court’s reasoning was that,

‘[s]ince ex hypothesi the responsibility for whatever is done [under] the

contract must in fact be done by the receiver, it [is] out of the question to

pronounce a decree ostensibly against the company, which would in effect

result in the receiver either incurring personal liability or in his bearing the

responsibility for contempt of court.’”

202. Counsel also relied on the following passage from Lightman & Moss on “the Law of

Administrators and Receivers of Companies” (6th Edition), at para. 10-019: -

“If and when a receiver decides that the company shall repudiate the contract, the

other party is left with his remedy in damages against the company and a claim as

an unsecured creditor and has no claim against the receiver or his appointer,

notwithstanding the receiver’s interim adoption of the contracts in the course of

managing the company’s business. This does not offend against basic conceptions

of justice and fairness. The liability has been undertaken by the company at the

inception of the contract and the benefit accrues to the company even when the

receiver is in office. The other contracting party (like other creditors) must look to

the company for payment. During the receivership the other contracting party is in

no way inhibited from exercising his contractual rights and remedies.”

203. It was therefore argued that the Receivers were not party to the Management Agreement

and that they had not assumed any liability under it. Counsel argued that this was

reflected in Special Condition 6.2 of the Contract for Sale of Block C/the Link Building,

under which the purchaser acknowledged that the Receivers were executing the contract

in their capacity as Receivers, and that they would not have any personal liability- a

special condition that reflects the position as set out in Clauses 15 & 16 of the Leases of

Easements executed by the Receivers quoted earlier in this judgment.

204. The significance of this submission, if it is correct, became very clear from the evidence

given by Mr. Billy Murphy, a director in Grant Thornton designated by the Receivers to

address any matters arising from the receivership, and the person “most closely

connected with the issues arising in the receivership” (para. 1 of his Witness Statement).

His evidence under cross-examination (Transcript Day 2 pp. 186-196) was that the

Receivers did not see themselves as “stepping into the shoes of the Developer”, and that

their task was to realise the assets for the charge holder. He stated that “in three weeks’

time we will be finished the works programme which will address the issues that currently

prohibit [the carpark basement] from use and we have a purchaser who is willing to

accept that and willing to close on those grounds. He agreed that the purchaser of Block

Page 79 ⇓

C/Link Building was paying consideration on the basis of the provision of 172 car spaces.

He agreed that this money would all be taken by the charge holder (NAMA). He was

asked (p. 188) in effect whether the sale proceeds would be used to discharge the

receivership “if he knew you were not able to transfer over the common areas” because of

structural issues with the basement carpark. He agreed that this was what would happen

“if it was a position that we weren’t able to transfer without incurring further costs…we

are selling a unit, we are realising assets which is only going to cover a fraction of the

debt here.” He was asked (p. 187) what would happen if the Receivers could not provide

an opinion or certificate of compliance with planning or building regulations, and hence

could not comply with the Management Agreement obligations in relation to transfer of

the common areas, to which he answered “I presume we agree to discharge”, which he

agreed meant that the money which the Developer was receiving would all be taken by

the charge holder. He agreed that this would be the position if the Receivers weren’t able

to transfer without incurring further costs (p.188). He later agreed that if the monies

were paid over to NAMA, the Receiver’s recommendation to NAMA would be that the cost

of remedial works would have to be paid by existing unit holders through the levying of

service charges (p.190).

205. Added to this is the evidence of Ms. O’Sullivan of NAMA, who under cross examination

was asked about what would happen to the money obtained from the sale of Block C and

the Link Building, and whether there would be any transfer of the common areas

(Transcript Day 1, commencing p.143):

“319.Q.……once you have gotten the money from the sale of C, you will then direct

Mr. McCann or the recommendation will be to transfer over the common areas and

walk away?

A. Well, as required under the documentation to initiate the process of transfer of

the common areas.

320 Q. Yes?

A. And should issues arise then, the Receiver will have to come to NAMA.

321 Q. Yes. But are you saying NAMA will refund the Receiver if it suddenly

transpires that there is an issue in relation to certifying either a compliance with

planning or compliance with the then applicable Building Regulations. Will NAMA

fund the works if it has to be done?

A. Where it’s demonstrated that it’s a liability of the Receiver.

322 Q. Will NAMA fund it or not?

A. Only if it’s a liability of the Receiver.”

On re-examination (Transcript p.154) Ms. O’Sullivan was asked if the transfer of the

common areas involved certification that could “incur a liability of one million or 1.5

Page 80 ⇓

million or two million would that be something that would influence NAMA’s decision?” to

which she answered “It could do yes”.

In the exchange with the court immediately following this, mentioned earlier in this

judgment, I suggested that this “leaves the common areas forevermore in the ownership

of whom, the developers or…” to which Mr. Howard responded “Actually that is exactly

what happens, Judge…”.

This evidence reinforces my view that, absent court intervention, there is a likelihood that

the NAMA will decide that the cost of remedial work is too great, and that, on the

Receivers recommendation it will be paid over to NAMA without certification or completed

transfer, leaving the unit holders to through their service charges to pay for the

remediation of structural defects arising from the developers default because the

Receivers may have no personal liability.

206. The court was informed that pending delivery of this judgment the proceeds of sale of

Block C/the Link Building will be held by the Receivers/their solicitors. I am satisfied that,

absent that undertaking or any further court intervention, and absent any further

agreement between the parties, the Receivers were/are likely to pay over to NAMA the

net balance of the purchase monies in part discharge of the Receivership, and that that

payment would be made in the belief, and in the reliance on advice received, that they

have no legal obligation to remedy the structural defects in the carpark, and in reliance

on contractual clauses in the contract of sale and Leases of Easements which provide that

they have no personal liability.

207. While it is the case that the Management Agreement predates the appointment of the

Receivers, and predates the debenture pursuant to which they were appointed, the

argument that the Receivers have no liability – or at least they have no liability so long as

they hold or are entitled to receive the proceeds of sale of property invested in the

Developer, does not stand up to scrutiny.

208. The limitations on a Receiver’s power to disclaim a contract are evident from the

immediately preceding passage in “the Law of Company and Solvency” 3rd Edition where

the authors state: -

“5-29 A Receiver will not be permitted to enforce a contract concluded with the company

if, at the same time, he is not prepared to cause the company to honour its side of

the bargain. He cannot obtain the benefit of the contract which simultaneously

denying the other party any rights which it may have under it. For instance, if the

company agreed to buy land, but the conveyance has not yet been executed, the

Receiver will not be allowed to claim specific performance or damages for breach of

the contract unless he causes the company to tender the outstanding price.”

209. The issue is therefore whether the Receivers have adopted the Management Agreement,

and accordingly, are liable to perform it.

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210. As stated earlier I am satisfied that the Receivers have adopted and benefitted from the

Management Agreement, and cannot now disclaim obligations of Glenkerrin arising under

the Management Agreement. The Management Agreement is extensively referenced in

the Statement of Claim. It is also of significance that the 2003 Debenture was executed

post the Management Agreement, and accordingly the security thereby obtained is

subject to the performance of the Management Agreement. I accept the defence

submission that in order to maximise the value of such security it was necessary to build,

and complete the Campus, including the Estate Common Areas. Since their appointment

in 2011, the Receivers have sought to sell the remaining units, and in every case in so

doing have relied upon the common areas, including the carpark, both at surface level

and at basement level, and the Management Agreement as a document of title. It is clear

that in selling these secured assets the Receivers are doing so on the promise of use of

the common areas including the carpark and thereby achieving and benefitting from a

higher sale price. Mr. Murphy accepted in his evidence that the sale price obtained in

respect of Block C/the Link Building was greater than it would have been had the building

been sold without the right to any car parking spaces, and that the inclusion of car

parking spaces was required in order to maximise the price obtained. Mr. Sweetman in

his evidence gave similar recognition to the necessity for the Receivers to sell with the

benefit of car parking spaces. Mr. Sweetman also acknowledged that Clause 3.6 of the

Management Agreement would have permitted the Receivers to carve out the carpark

from the sale of Block C (see Transcript Day 3 pp. 24, 78 & 79). The Receivers therefore

elected to sell with the use of the carpark and received a greater benefit by so doing.

211. It is also of some significance that the Receivers are named as parties to the Leases of

Easements executed from July 2011 onwards. Strictly speaking this may not have been

necessary. Further the Receivers sold Block C/the Link Building with full knowledge that

there were issues with the condition of the carpark. I am satisfied that this knowledge

extended back to 2017 when the Receivers tendered for works to be carried out with a

value between €1m and €1.25m. I do not accept that the Receivers only became aware

of structural issues in May 2018, on receipt of Mr. Campbell’s report, although that report

certainly raised such issues unequivocally. The Receivers in fact carried out works in the

carpark between 2016 and 2019, and these were ongoing at the time of hearing, and

according to Mr. Murphy were due to be completed in about three weeks’ time. In any

event these interventions in themselves indicate acceptance on the part of the receivers

of some responsibility for the condition of the carpark. Mr. Murphy agreed that in 2016

they engaged John Hoare to go to tender and to provide a scope of works “to be able to

commission the carpark for use as part of our requirement” (Transcript Day 2, p. 180).

In response to the court Mr. Murphy accepted that the work done on commissioning the

carpark was being done with a view to selling it so that the carpark could be used

immediately by the purchaser and would be fit for purpose and “to provide car spaces for

the three blocks” (Day 2 p.185). He accepted that the Receivers were “spending money,

spending a couple of hundred thousand in getting the carpark up to speed” (Day 2, p.

190).

Page 82 ⇓

212. Mr. Murphy went on to agree with the court that in order for the carpark to be fit for

purpose it must be capable of being insured. He accepted that when the defendant was

unable to obtain insurance from Travelers, the Receivers obtained public liability cover –

although in email queries to him from the purchaser of Block C he singularly failed to

answer the query whether the defendant’s/Mr.Campell’s reports had been disclosed to the

Receivers’ insurers (if they were not, the Receivers’ insurers might well be entitled to

repudiate for material non-disclosure). Indeed, and as I have found, the Management

Company did not have the use or control of the basement carpark after the appointment

of the Receivers, and that access remained blocked off until in or about 2016 when the

Receivers entered it, obtained reports, and commenced and carried out works with a view

to commissioning it for use.

213. I also agree with the submission on behalf of the defendant that the Receivers are

statutory receivers, appointed by NAMA, and as such under s.148 of the National Assets

Management Agency Act 2019 they enjoy the powers, rights and obligations that a

receiver has under the Companies Acts “and the powers, rights and obligations specified

in Schedule 1”. In Schedule 1 statutory receivers are empowered, under item 20 “to

enter into, abandon, perform, repudiate, rescind, vary or cancel any contracts as he or

she thinks fit.”

214. It would therefore have been open to the Receivers to cancel the Management

Agreement. The fact that they choose not to do so does indicate that they did not regard

it as burdensome, but rather as an agreement from which they could benefit.

215. I am therefore satisfied that, while the Receivers have no personal liability, the

Receivership has adopted and benefitted from the Management Agreement and cannot

now seek to disclaim or repudiate Glenkerrin’s legal obligations under the Management

Agreement. It follows that the Receivers should not be permitted to pay over to NAMA

the net proceeds of sale received by the Receivers as agents for Glenkerrin in the sale of

Block C/The Link Building when they are the only resource available, or that will ever be

available, to Glenkerrin/the Receivers to complete the development in accordance with

planning permission and building regulations and their legal obligations.

Undermining the 2000 Mortgage

216. Another argument pursued on behalf of the plaintiffs was that the construction of the

Management Agreement contended for by the defendant, and accepted by the court,

would somehow undermine NAMA’s security over the Campus. This argument carries no

force when one considers the history of the security.

217. The property held by the first and second named defendants on which the Campus was

subsequently developed was the subject matter of the 2000 Mortgage dated 1st

September, 2000 made between the Grehans and AIB. However, on 6th April, 2001 the

first and second named defendants contracted to sell the lands upon which the Campus

was developed to Glenkerrin for IR£12m. Whilst the folio remained in the name of the

first and second named plaintiffs, they hold a bare legal interest in the Maynooth Business

Campus, having contracted to sell those lands to Glenkerrin.

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218. The Management Agreement was entered into on 6th April, 2001. Thereafter, on 10th

December, 2003 AIB entered into the Debenture.

219. The real and substantial security under which NAMA and the Receivers are operating is

therefore the 2003 Debenture, rather than the 2000 Mortgage, although it is the case

that the Receivers were appointed under both instruments. All that remains secured by

the 2000 Mortgage is the bare legal interest in the lands.

220. Glenkerrin developed the Maynooth Business Campus and added value “for Glenkerrin as

Developer”. The requirement that Glenkerrin complete the development, and do so to the

standard contemplated by the Management Agreement, including the common areas, had

the effect of enhancing the value of the Glenkerrin interest. It cannot be said that the

true construction of the Management Agreement found by this court could in any way

have undermined the bare legal interest retained by NAMA, and certainly no evidence was

adduced to support such a contention.

Rectification – the standard to which the development was to be completed

221. The defendant in its counterclaim makes an alternative claim for rectification, based on a

mutual mistake of a fact, or alternatively unilateral mistake on the part of the defendant

that Management Agreement embodied the complete terms of the agreement between

the parties.

222. The onus is on the defendant to prove such a claim on the balance of probability. The

leading authority on mutual mistake is Irish Life Insurance Company Limited v. the Dublin

Lands Securities [1989] I.R. 253 where Griffin J. observed, at p.260: -

“As a general rule, the courts only rectify an agreement in writing where there has

been mutual mistake - i.e. where it fails to record the intention of both parties.

Although that was the original conception of reformation of an instrument by

rectification, nowadays a party who has entered into a written agreement by

mistake will also be entitled to rectification if he establishes by convincing evidence

that the other party, with knowledge of such intention and mistake, nevertheless

concluded the agreement.”

223. Griffin J. then referred, at p.263, to the judgment of Kenny J. in Lucey v. Laurel

Construction Co. Ltd. (Unreported, High Court, 18th December, 1970) and cited and

adopted the essential principles clarified by Russell L.J. in the leading English authority of

Joscelyne v. Nissen [1970] 2 Q.B. 86, as summarised by Lord Lowry L.C.J. in Rooney and

McParland Ltd. v. Carlin [1981] N.I. 138 at p. 146:—

“(1) There must be a concluded agreement antecedent to the instrument which is

sought to be rectified; but

(2) The antecedent agreement need not be binding in law (for example, it need not be

under seal if made by a public authority or in writing and signed by the party if

relating to a sale of land) nor need it be in writing: such incidents merely help to

discharge the heavy burden of proof; and

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(3) A complete antecedent concluded contract is not required, so long as there was

prior accord on a term of a proposed agreement, outwardly expressed and

communicated between the parties, as in Joscelyne v. Nissen.”

224. Applying these principles, for there to be mutual mistake there must have been prior

agreement in terms different from those recorded in Management Agreement. A

peculiarity of such claim in the present case is that all three parties i.e. the Grehans,

Glenkerrin and the defendant, had a common purpose and were represented by the same

firm of solicitors. Mr. Danny Grehan’s evidence was that he “understood” that the

Management Agreement meant that the Business Park would be completed to a good and

workmanlike as standard. It went no further than an ‘understanding’ which does not

amount to an agreement. There is no evidence from him, or either of the two solicitors

concerned, Mr. Damian McGrane and Ms. Elaine O’Keeffe, of any prior common

agreement on such wording.

225. With regard to the claim based on a unilateral mistake, in Slattery v. Friends First Life

Assurance Company Limited [2015] 3 I.R. 292 the Court of Appeal held that a party

seeking to achieve ratification of a contract had to establish that it had executed the

contract under a mistake; that the other party to the contractor’s agent was aware of that

mistake; and that there was an element of sharp practice on the conduct of that other

party or his agent, or that the circumstances where such that it would be unconscionable

for a court to enforce the terms of a contract as executed. The Court of Appeal held:

“37. The first principle is that it is difficult for a party to a written contract to escape the

effects of its provisions by reason of mistake. When he has had the benefit of legal

advice and versions of the Deed have gone back and forth in the course of drafting,

the undertaking is even more onerous for a party seeking to establish entitlement

to rectification. There is, however, an equitable jurisdiction in exceptional cases for

a Court to order that the written formal document be rectified by removing,

inserting or altering the provisions so as to reflect what the parties truly intended,

understood and agreed.”

226. I am not satisfied that the evidence adduced on behalf of the defendant indicates any

mistake in the Management Agreement insofar as it addresses the standard to which the

estate common areas were to be completed and finished, let alone that this is an

exceptional case that would justify equitable intervention. Mr. Grehan’s own evidence

indicated that the developer would not be required to complete entirely “free from

defects”, and that some defects would be acceptable provided there was substantial

compliance with planning requirements and the Building Control Act/regulations made

thereunder. There was also no evidence from Mr. Maguire or Ms. O’Keeffe to suggest that

they were aware of any “mistake” that would justify rectification. Moreover, the Grehans,

Glenkerrin and the defendant, i.e all the parties to the Management agreement, had the

benefit of legal advice, and it was not, in 2001, a requirement and that parties to such an

agreement receive independent legal advice. In this respect also there is no evidential

basis, let alone convincing evidence, to justify the claim to rectification.

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Conclusions

(1) The Management Agreement is to be construed as imposing a legal obligation on

Glenkerrin to complete the Campus including the carpark to a standard such that it can be

certified in accordance with General Condition 36 of the Law Society General Conditions of

Sale (1995 Edition).

(2) This is not a standard “of good workmanship free from defects”, but it does require

completion in “substantial compliance” with planning permission, plans and specifications,

the Building Control Act, 1990, and Building Regulations made thereunder.

(3) This legal obligation is also owed by the Receivers who have since their appointment

adopted and benefitted from the Management Agreement in successive sales of Campus

units and are now estopped or otherwise not entitled to disclaim or repudiate the

Management Agreement.

(4) The concrete surface of the carpark (over basement level) was constructed without any

thermal expansion joints rendering it structurally defective having regard to its size. As a

result concrete spalling, cracks in support columns, beams and corbels and other defects

have emerged which have rendered the basement carpark unfit for use, and the

underlying structural defect will lead to deterioration and collapse of the carpark over

time, with local collapse possible in 10 years. While “commissioning works” have been

carried out by the Receivers these do not address the structural defect.

(5) The structural defects are such that the Campus common areas are not “complete” and

certification in accordance with General Condition 36 cannot be provided until remedial

works, including probably replacement of the asphalt deck, to the car park are carried

out. Such Certification as was put in evidence does not cover the car park structure, and

even if it did would be worthless in light of Mr. Campbell’s evidence. An intrusive

structural investigation needs to be carried out before the full extent of the remedial

works required can be ascertained. Glenkerrin and the Receivers have the legal obligation

to carry out these works.

(6) It is an implied term of the Management Agreement that Glenkerrin/the Receivers must

serve the 28 day completion notice referred to at clause 3.2 “as soon as is practicable”

after the sale of the last unit. Although the last unit has been sold it is not “practicable”

for Glenkerrin/the Receivers to serve such a notice while they are not in a position to

furnish certification in accordance with General Condition 36. The date for service must

therefore be postponed until the remedial works to the car park are carried out and

certified.

(7) Were it were necessary to so determine the issue (which I do not believe it is for reasons

given earlier), I would determine that it is an implied term of the Management Agreement

that the Management Company is required to execute a Lease of Easements with the

developer and each unit purchaser in the form furnished prior to execution of the

Management Agreement. Notwithstanding this the defendant, in the particular

circumstances of this case, was entitled to decline to execute the Lease of Easements in

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the sale of Block C and the Link Building unless the Receivers gave appropriate

undertakings to remediate the structural defects in the car park and/or agreed to place

the proceeds of sale in escrow pending determination of the dispute as to where the legal

obligation to carry out those works rested.

(8) Having regard to the manner in which the Receivers have sought to avoid/dispute their

legal obligations both prior to and since the institution of these proceeding, the process of

establishing what remedial works are required, and the carrying out of those works must

be transparent. To achieve this the defendant must be afforded the opportunity to have

its own engineering or other experts informed, by being present at inspections, opening

up, and at critical stages of the work, and by being briefed with all relevant scoping and

remedial work specifications/plans or other relevant documents, and by being given the

opportunity to express views on what is proposed, and on the works as carried out.

Similarly the defendant either directly or through it agents should be kept informed and

copied in a timely fashion with all relevant documentation. On their part the defendant

and its agents must at all time bear in mind that Glenkerrin/the Receivers obligation is to

achieve “substantial compliance”, and not perfection.

(9) The cost has been estimated at €2.26 million to which are to be added consequential

repair works plus 10% for professional fees. The full cost cannot be ascertained with any

accuracy until the further investigation is carried out and costings obtained, but on the

basis of Mr. Campbell’s estimates in my view it has the potential to exceed €3 million.

(10) The sale of the last unit – Block C and the Link Building – has yielded in excess of €5

million, which is held in escrow for the Receivers pending the outcome of these

proceedings. As Glenkerrin has no funds to carry out these works, and as the Receivers

are contractually protected from any personal liability, the remedial works must be funded

from these proceeds of sale.

(11) I would expect the Receivers, following consideration of this judgment, to undertake to

utilise the funds so held to fully and properly investigate and scope the remedial works

required to the car park, and to carry them out as soon as is practicable in accordance

with their legal obligations and to the standard required to provide certification in

accordance with General Condition 36, and to do so with the transparency that I have

indicated is necessary, and then to serve the notice required by clause 3.2 of the

Management Agreement, and finally to complete the Transfer of the estate common

areas.

(12) In the absence of appropriate undertakings I will make declarations and orders in line

with the findings and conclusions in this judgment, including orders having mandatory

effect under the “further and/or other relief” sought in the Amended Defence and

Counterclaim. Pending a short adjournment for the parties to consider this judgment I

require the Receivers’ assurance that the proceeds of sale will continue to be held in

escrow.

Result: Receivers liable to fix 'structurally defective' carpark at Maynooth Business Campus.