High Court of Ireland Decisions

1. The Plaintiff is seeking to recover monies which he claims are owed to it by the Defendants. A number of matters are common case, others are in issue.

2. What is common case is that the Defendants defaulted under a number of agreements made between them and the Plaintiff's predecessor in title (referred to as Highland), and that proceedings were issued to recover the sums alleged to be owing. After the proceedings were issued, Appearances were entered and Motions brought for liberty to enter final judgment.

3. At this stage, efforts were made to recover the monies without recourse to the proceedings. The first meeting between representatives of Highland and the Defendants led to a slanging match. However, a further approach was made and an arrangement was entered into. This was on the 3rd March, 1992. Whether this resulted in a concluded agreement and, if so, upon what terms is in dispute. What is accepted by both parties is that the Defendants indicated willingness to meet their obligations by agreeing to put certain items of machinery up for sale. The arrangement was made between John O'Neill on behalf of Highland and John Killeen. Its purpose was to produce a formula by which the claim could be compromised. It was agreed that a reduced amount would be accepted provided that various items of equipment were returned by the Defendants to be sold. These items were to be returned to main dealers. This was to enable them to be sold in the ordinary course of sale rather than in the obvious course of the repossession.

4. The items to be returned were agreed. Valuations were placed upon each item. There is some disagreement as to who actually valued the items of equipment. In my view, this was done initially by John Killeen but I accept that John O'Neill had an input and that largely the resulting figures had the approval of both of them. The list and valuations placed upon them was as follows:-

5. Sanderson Teleporter £12,000.00

6. Roller and Plough £ 8,000.00

7. Mercedes 1300 Tractor £15,000.00

8. International 885 4 Wheel Drive £ 8,000.00

9. There is no real disagreement on these matters. There is, however, a serious dispute as to what was to happen if the valuations were not achieved in practice.

10. The evidence of John O'Neill was to the effect that the Defendants were to provide the items already set out and that they were to pay in addition a further £10,000 by two payments of £5,000 each, one in October 1992 and the other in July 1993. If the several items failed to achieve £98,000, then the Plaintiff would bear the loss up to £5,000 and thereafter the Defendants would bear the next £10,000. If the shortfall was greater than this, they would supply two further tractors for sale. He says that he made a note at the time and this note was adduced in evidence. Though its contents were not strictly admissible as to their truth, no objection was made to its admission in evidence. This note refers to a settlement at £103,000.

11. The evidence of John Killeen denies any additional payment of £10,000. He accepts however that a further liability to £10,000 could have occurred in the event of a shortfall below £93,000. He further denies that two further tractors might have to be sold. He was to deliver the items, thereafter it was for Highland to achieve sales and collect the purchase monies.

12. James Killeen also gave evidence. It was clear that the details of the arrangement were made by his brother and that he had merely a peripheral knowledge of them. He was, however, of the opinion that the Defendants would probably have to pay the further sum of £10,000 by way of the two instalments of £5,000 each payable on the 20th October, 1992 and the 20th July, 1993. This meeting took place on 3rd March, 1992. It is agreed that whatever arrangement was made it had to be authorised by head office of Highland. This was done and on the 4th March, 1992, the Defendants were notified of this fact. On the 5th March, 1992 Highland wrote setting out the terms of the arrangement in the form of an offer to be accepted in writing.

13. This letter is at variance with the evidence of John O'Neill to some extent. It suggests a settlement at £103,000.00 or £108,000.00. It also suggests that a shortfall below £93,000.00 to be made up by the sale of two further Mercedes tractors which should be made up by the Defendants not to £93,000.00 but to £98,000.00. In any event, the Solicitors for the Defendants replied on the 10th March, 1992 in which they took issue with the letter of the 5th March on a number of points. The relevant portions of this letter are as follows:-

14. The letter then continued to deny that the two sums of £5,000.00 were to be paid in any event and that the shortfall below £93,000.00 was to be made up by disposal of Mercedes tractors.

15. Notwithstanding the contradictions contained in the letter of the 10th March, there was no disclaimer by Highland. In the course of a letter dated the 22nd April, 1992 the Solicitors for the Defendants wrote to the Solicitors for Highland indicating the stage at which performance of the arrangement had reached. The letter, so far as is material, was as follows:-

16. Again there was no disclaimer of these matters on behalf of Highland. The proceedings were subsequently adjourned generally with liberty to re-enter and in a letter dated the 10th August, 1992 from Highland's Solicitors to the Defendants' Solicitors, the following was also indicated:-

17. Of the several items agreed to be put up for sale all were delivered to the various main dealers by whom they were to be sold. An exception was the first item, the two grain dryers which because of their size were more easily disposable from the site where they were erected. In addition, the Defendants delivered up two further trailers.

18. Leaving aside for the moment which party is correct as to the terms of the arrangement, I am satisfied that an oral agreement was concluded on 3rd March, 1992 subject to a condition subsequent which was fulfilled.

19. I accept John Killeen's version of the arrangement made between him and John O'Neill. I accept that one purpose of the valuations was to ensure a valuation before the items left the Defendants' premises. Both acknowledged that the valuations might not be achieved and that accordingly loss might be borne. If so, the first £5,000 was to be borne by Highland and the next £10,000 by the Defendants. I do not accept that two further tractors were every to be made available. I accept that if the Defendants had to make good shortfall up to £10,000 that this was to be by two instalments of £5,000 each on the 20th October, 1992 and 20th July, 1993 respectively following sales of harvest. I do not accept that the Defendants were to pay £10,000 even if there was no shortfall unless a total of £108,000 was achieved. James Killeen acknowledged that this £10,000 would probably have been payable. I accept this not as meaning unless £108,000 was achieved but as an acknowledgement that he did not expect the valuations to be realised. The fact that two additional trailers were handed over supports the suggestion that the Defendants wanted to avoid liability for shortfalls so far as possible.

20. In my view it would be reasonable to expect the items to reach in or about their estimated values if sold in the ordinary course of business. The grain dryers were very large and it is not surprising that they were not brought in to a dealers premises. I accept the evidence of John Killeen that they were dismantled by Mr. Craigie after they had been seen by a number of potential buyers.

21. Evidence has been adduced by the Plaintiff as to the figures appearing in its financial records representing the proceeds of sale of all the items, save the grain dryers and the grain trailers. No evidence was given on behalf of the Plaintiff by anyone of any direct knowledge of the circumstances surrounding the sales or any other matter which could verify the figures contained in the Plaintiff's books.

22. It would appear that all the items, save the dryers and the trailers, have been sold. Only in relation to the two tractors is there evidence to suggest how they were sold and to whom. They were sold by Craigie at auction trading as The Machinery Sales Specialist to Blackchurch Farm Machines for £5,000 and £3,500 respectively. Both these sums were credited to the accounts of the Defendants. It would seem therefore that either no commission was charged or that the auctioneer has acted as principal in the transactions or that a higher price was in fact obtained.

23. While the books of the Plaintiff show other sums credited to the accounts, there is no evidence as to the manner of sale or the purchaser.

24. The agreement between the parties allowed for ordinary retail sale and only if this could not be obtained by specified dates, could the items presumably be sold by auction. The obligation to arrange the former mode of sale lay upon Highland. Save for some letters furnished by the Defendants, which in any event are neither admissible as to the truth of their contents nor, even if they were of much assistance, there is no evidence as to what happened to the various items after they were delivered to the various retail firms, where they were stored, when they were removed and on whose authority. Nor is there any evidence as to where they were moved, assuming that to be the case and how they were sold. There is no evidence as to the condition of the items when they left the Defendants' premises nor any evidence that on those dates the estimates were in any way unreasonable.

25. In my view, in the absence of explanation by admissible evidence of which I have none that the estimated prices were unreasonably high, I accept them as proper valuations believed to have been reasonably accurate. That is not to say that they would necessarily have been achieved, particularly if sold in the course of repossession at auction. Since the Plaintiff cannot establish the prices which would have been obtained had the items been sold in accordance with the terms of the agreement, it must accept the valuations in their place. So far as the dryers are concerned, there has been no evidence as to the circumstances in which they came to be dismantled other than that this was to facilitate their removal. No evidence has been adduced as to any sale, and, if so, the price achieved nor why the sale, if any, did not proceed.

26. Having regard to the breach by Highland of its obligation to effect sales in the manner agreed, there is no evidence of a shortfall. In these circumstances the Plaintiff must accept that no liability on the part of the Defendants to meet a shortfall can have arisen. I accept the Defendants' submission that they performed their part of the bargain and that no further obligations on their part came into being.

27. In the circumstances the claims herein will be dismissed.