Judgment of Ms. Justice Laffoy delivered on 4th day of February, 2016
Introduction
1. This judgment relates to an appeal of the defendant/appellant (the Appellant) against an order of the High Court of 6th April, 2011 made by Kearns P. (the trial judge) following a hearing on oral evidence. The order recorded the finding of the trial judge that “there was not a concluded agreement between the parties for payment of €200,000.00”. It ordered that the plaintiff/respondent (the Respondent) recover against the Appellant the sum of €75,000 and costs of the action when taxed and ascertained, the trial judge having assessed “the value of services delivered by the [Respondent] to the [Appellant] in the sum of €75,000.00”. On the appeal, the Appellant seeks an order discharging so much of the order as made an award of damages quantum meruit in favour of the Respondent. There is no cross-appeal by the Respondent against the finding that there was not a concluded agreement between the parties for the payment of €200,000 by the Appellant to the Respondent. Accordingly, the issue which arises on the appeal is whether the award in the sum of €75,000 in favour of the Respondent on a quantum meruit basis was made in error, as the Appellant contends. Peculiarly because of an absence of complexity in the procedures adopted and, in particular, in the manner in which the claim and the defence were pleaded, it is necessary to outline what happened prior to the hearing on oral evidence in some detail.
Procedures/pleadings
2. The Respondent’s High Court proceedings were initiated by a summary summons which issued on 29th October, 2008. The material statements in the special indorsement of claim on the summary summons for present purposes were as follows:
“At the [Appellant’s] request the [Respondent] rendered services to the [Appellant] assisting the [Appellant] with a significant property development in which the [Appellant] was involved at Chateau Jouarries, Carcasonne (sic), France.
In and around November of 2006 within the jurisdiction of this Honourable Court, the [Appellant] agreed that he would pay to the [Respondent] the sum of €200,000.00 in respect of services rendered by the [Respondent] to the [Appellant] and this payment was to fall due on the practical completion of this development . . . The development was practically completed in and around September/October 2008 and accordingly the sum due by the [Appellant] to the [Respondent] is now due and owing.
Despite request for payment and in breach of the agreement between the [Respondent] and the [Appellant], the [Appellant] has failed to pay the sum of €200,000.00 or any sum to the [Respondent].”
As the foregoing illustrates, the Respondent was seeking only to recover a debt, a liquidated sum in money, upon a contract. Accordingly, the action was properly brought by way of summary summons in accordance with Order 2 of the Rules of the Superior Courts 1986, as amended. There followed the Respondent’s prayer for relief which, in addition to a claim for judgment in the sum of €200,000, contained a claim for “[s]uch further or other relief as this Honourable Court shall deem meet”.
3. The next procedural step which is of significance is that by order of the High Court (McKechnie J.) made on 15th February, 2010 it was ordered that, an earlier order, which had been made by the Master of the High Court on 19th January, 2010 in which it had been ordered that the Respondent be at liberty to enter final judgment in the sum of €200,000 with interest from 1st November, 2008 together with costs when taxed and ascertained, be vacated. The circumstances in which that order had been made do not bear on the issues on this appeal. It was further ordered that the action stand adjourned to plenary hearing as if the proceedings had been commenced by plenary summons. Directions were given in relation to delivery of pleadings.
4. The Respondent’s statement of claim was delivered on 5th March, 2010. As was submitted by counsel for the Appellant on the hearing of the appeal, it was in substance in similar terms to the special indorsement of claim on the summary summons. The relief sought by the Respondent in the prayer for relief in the statement of claim was a verbatim replication of the relief sought in the summary summons: judgment in the sum of €200,000; such further or other relief as to the Court should deem meet; interest pursuant to the Courts Act 1981; and an order for costs.
5. Subsequently, a notice for particulars was raised by the solicitors for the Appellant. The only aspect of the notice of relevance for present purposes is to be found in paragraph (1) in which particulars were sought of each request of the Appellant that the Respondent render services as pleaded in the statement of claim, the particulars sought being - the date, the place and the circumstances of the request and the names of the persons present. The response of the Respondent’s solicitors, as well as asserting that the position of the Respondent had been extensively set out in the affidavits already sworn in the proceedings, that is to say, the affidavits filed on the motion to the Master of the High Court and on the appeal against the Master’s Order, stated as follows:
“As the [Appellant] well knows he and the [Respondent] were partners in exploiting the commercial benefit to be gained from the development at Chateau Jouarries, Carcasonne (sic), France. Both the [Respondent] and the [Appellant] engaged in whatever was necessary to ensure a successful outcome for this development and the [Respondent] attended site meetings, meetings with the local Mayor and the Vendor. The [Respondent] met with prospective investors such as Mr. Conor Clarkson and the [Respondent] held meetings with prospective sales agents such as Tony Forte of Douglas Newman Good. The [Respondent] had extensive meetings with prospective operators of the development, Eurogroup and was involved in the negotiations of the contract with those operators. The [Respondent] had numerous meetings and communications with the selling agents and was involved in the organisation of marketing campaigns including accompanying selling agents on site visits. The [Respondent] was responsible for introducing the eventual funder of the contract and had numerous meetings with that funder Neil McCann.”
6. The Appellant’s defence was delivered on 28th May, 2010. It traversed all matters pleaded by the Respondent. In particular, it was denied that -
(a) the Appellant agreed that the Respondent would render services whether alleged or at all;
(b) the Appellant agreed to pay to the Respondent the sum alleged or any sum, whether in respect of services as alleged or at all; and
(c) that the alleged sum or any sum was due and owing by the Appellant to the Respondent.
It was specifically pleaded that the Appellant was under no obligation, legal or moral, to make payment of the sum of €200,000 or any other payment to the Respondent.
7. The delivery of the defence marked the end of the pleadings. No reply was delivered on behalf of the Respondent.
The hearing
8. The hearing took place over two days, on 5th and 6th April, 2011. On the appeal, counsel for the Appellant attached particular emphasis to the fact that, when opening the case, counsel for the Respondent identified the issue for the Court as a very net issue, that is to say, as to whether or not the Appellant owed the sum of €200,000 claimed by the Respondent. Emphasis was attached to the fact that in opening, counsel for the Respondent, while outlining a joint venture agreement entered into by the parties in early 2006, under which the Respondent was to invest €750,000 in the French project, which had fallen away, specifically identified the agreement in respect of which the Respondent was then suing as an agreement under which the Respondent was to be paid €200,000 on completion of the development for services rendered. The first day of the hearing was taken up with the opening and the evidence of the Respondent.
9. At the commencement of the hearing on the second day, the trial judge raised with the parties whether, in the event that he was unable to be satisfied as to the definite terms of any agreement between the parties, the parties were agreed that the matter could be progressed on a quantum meruit basis, in which event the Court would have to decide what sum might be appropriate. The unequivocal response of counsel for the Appellant was that he was not agreeing that the matter could be dealt with on a quantum meruit basis, giving as a reason the way in which the matter had been pleaded and, in essence, that the Court was not in a position to deal with a quantum meruit based claim. After a short recess, the cross-examination of the Respondent continued. In the course of the cross-examination, the trial judge intervened, as counsel for the Appellant emphasised, pointing to the fact that the net issue upon which counsel for the Appellant insisted, whether there was agreement reached between the parties, was the only issue in the case, the “crucial” issue being whether there was a discussion between the parties at which a “buyout figure”, a valuation for services rendered up to that time, was discussed and agreed, and if so what was decided. In the course of the intervention, the trial judge stated that, if counsel for the Appellant was indicating that he should not deal with the case on a quantum meruit basis, then the trial judge simply would have to decide it “on an all or nothing basis”.
10. After the intervention, the cross-examination of the Respondent was completed. Two witnesses, apart from the Respondent, were called on behalf of the Respondent: Mr. Tony Forte and Mr. Neil McCann, both of whom were referred to in the reply to para. (1) of the notice of particulars quoted above. Following the completion of the case of the Respondent, the Appellant then testified. One other witness, an external accountant and auditor in this jurisdiction for the Appellant’s group of companies, gave evidence on behalf of the Appellant.
11. Thereafter, the trial judge indicated that he was going to give his decision. He indicated that the longer he had been listening to the case, the more sympathy he had with both sides in the matter. Indeed, the evidence adduced in relation to the collapse of the property market in 2008 is conducive of sympathy for the parties.
Findings and decision of the trial judge
12. In his ex tempore judgment, having outlined the evidence as to the relationship between the Respondent and the Appellant in relation to the development in France from its inception, the trial judge focused on the position from late November 2006 and the alleged agreement pleaded and relied upon on behalf of the Respondent, outlining the evidence as to the interaction between the parties in late November 2006, by e-mail and otherwise. He set out his conclusion as follows:
“. . . I am quite satisfied that this sum of €200,000.00 was mentioned by [the Respondent] . . . because [the Appellant] accepts himself that it was mentioned. But insofar as reaching a conclusion, on the balance of probabilities, that a concluded agreement was reached that that sum would be paid, I am not satisfied on the balance of probabilities that any such agreement was made. I think that what [the Appellant] has said to me strikes me as more probable, that he would consider this alternative proposal of €200,000.00 even though he did not revert and nothing further was heard from [the Appellant]. I am driven to that conclusion by the emails, the contents of those emails, that there was a buy-off figure, that [the Appellant] recognised that there would have to be some sort of settlement or deal. But if a figure was mentioned and if he did not respond with a simply worded email, I am of the view that [the Appellant] nonetheless recognised that he had to pay [the Respondent] something. But I am not satisfied on the balance of probabilities that there was a concluded agreement that the sum should be €200,000.00.”
As has been outlined earlier, there has been no cross-appeal against that finding.
13. The trial judge then referred to the Respondent’s claim for such further and other relief as to the Court should seem meet and indicated that he proposed to consider and apply it notwithstanding the protest by counsel for the Appellant. The trial judge made it clear that he considered that there was nothing that had not been dealt with fully and comprehensively in the evidence. He rejected the contention that the Appellant could not deal with the case, or could not deal with the evidence that had been given, or that the Court had not been given enough information from which he could make a fair assessment of the value of the services rendered by the Respondent.
14. In relation to that claim for relief, the trial judge went on to state that he was going to reach his own conclusion as to the value of the Respondent’s services. He continued:
“I do believe while they were not as significant or as far reaching as he himself believes, they were nonetheless of considerable value to [the Appellant], particularly in the early stages. I propose to assess the value of those services at €75,000 and give a decree for that sum together with costs.”
Earlier, the trial judge had outlined the Respondent’s view of his contribution to the Appellant as follows:
“[The Respondent] on the other hand took the view I have added great value to this project: I have introduced Neil McCann to it; I have also introduced DNG and I have introduced Tony Forte; I have made a significant ongoing contribution.”
No evidence whatsoever, independent, expert, or otherwise, had been adduced at the hearing as to the scope of the benefit which had flowed to the Appellant from, and was attributable to, the services which had been provided by the Respondent to the Appellant or to put a monetary value on that benefit.
The appeal
15. As has been noted earlier, on the appeal the Appellant seeks to have so much of the judgment of the High Court as made an award of damages on a quantum meruit basis discharged. The grounds on which it is alleged that the trial judge erred in law and in fact or on mixed questions of law and fact in reaching that conclusion are set out comprehensively in the Appellant’s notice of appeal. Those grounds, on the basis of the submissions made on behalf of the Appellant, may be subsumed into the following arguments:
(a) that a claim by the Respondent based on the principle of quantum meruit formed no part of the Respondent’s claim as pleaded, as particularised, or as opened to the High Court on the hearing;
(b) that there was no evidence of the value attributable to the services the Respondent contended that he provided to the Appellant before the High Court, there being no witnesses on that matter and no opportunity to cross-examine;
(c) that there was no evidence of the benefit which was alleged to have accrued to the Appellant from those services before the High Court and, in particular, no evidence that such benefit accrued to the Appellant personally, as distinct from the Appellant’s group of companies; and
(d) that the issue of granting relief on a quantum meruit basis was raised by the trial judge and neither party invited him to determine the claim on that basis.
What flows from those submissions is that it is contended that, in the course of the hearing in the High Court, the Appellant and his counsel were taken by surprise, there being two elements which gave rise to that situation: that the pleadings did not contain a claim for an award on a quantum meruit basis; and that the facts which might have underpinned a claim for an award on a quantum meruit basis and its quantification were neither pleaded nor part of the case, in consequence of which no evidence was adduced in relation to those facts.
Pleading point
16. The starting point for the Appellant in outlining the legal position in relation to pleading was to quote the oft-quoted passage from the judgment of Fitzgerald J. in Mahon v. Celbridge Spinning Co. Ltd. [1967] I.R. 1, which, as stated by Keane J. in McGee v. O’Reilly [1996] 2 I.R. 229, “conveniently and compendiously” states the purpose of a pleading. Fitzgerald J. stated (at p. 3):
“The whole purpose of a pleading, be it a statement of claim, defence or reply, is to define the issues between the parties, to confine the evidence at the trial to the matters relevant to those issues, and to ensure that the trial may proceed to judgment without either party being taken at a disadvantage by the introduction of matters not fairly to be ascertained from the pleadings. In other words, a party should know in advance, in broad outline, the case he will have to meet at the trial.”
Of course, the consequence of the importance of pleadings in defining the issues between the parties, as pointed out in Delany and McGrath on Civil Procedure in the Superior Courts (3rd Ed. at para. 5 - 32), is that a party will not be permitted to make a case that is materially different to its pleaded case, unless leave to make an appropriate amendment in the pleadings of that party is obtained. No opportunity was sought by the Respondent in this case to amend his pleadings to include a claim for damages based on quantum meruit or unjust enrichment. Delany and McGrath cite the decision of the High Court (Clarke J.) in Moorview Developments v. First Active Plc