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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Jestdale Ltd. v. Millennium Theatre Company Ltd. [2001] IEHC 233 (31 July 2001) URL: http://www.bailii.org/ie/cases/IEHC/2001/233.html Cite as: [2001] IEHC 233 |
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2000 No. 12066P
BETWEEN/
Plaintiff
Defendant
JUDGMENT of Mr. Justice Lavan delivered the 31st day of July, 2001
These proceedings arise out of an application by the defendant, Millennium Theatre Company Limited, to have the Court, pursuant inter alia to its inherent jurisdiction, strike out the within proceedings as an abuse of process on the basis that the plaintiffs claim must fail.
By agreement in writing dated the 10th December, 1999, made between the defendant and the plaintiff, Jestdale Limited, the defendant agreed to grant and the plaintiff to take a lease of the premises formerly known as the Rotunda Picture House and now known as the Ambassador Cinema. At all material times, the defendant held a leasehold interest in the property. It was an express term of the agreement at issue that the defendant would demise the property to the plaintiff upon completion of certain works carried out in accordance with planning permission obtained by the defendant prior to the signing of the agreement. The agreement also made express provision for a recission of the agreement (without a right to compensation for work done) in the event that the works were not completed by a certain date. Alternatively, the defendant was given the discretion to extend the due date for completion of the works or to take such steps as it deemed appropriate to enforce its rights.
The works were not completed on time, and the defendant refused to extend the completion date. The plaintiff claimed that it could not fulfill its obligations by virtue of the acts or omissions of the defendant, in particular due to the allegedly defective planning permission obtained. It was contended that the defects in the planning permission rendered it wholly inoperable for the plaintiffs intended purpose. The plaintiff also contends that the listing of the property as a Grade 1 Listed Building, the possibility of which was not alluded to at the time it entered into the agreement with the defendant further inhibited its ability to carry out its obligations under the agreement, and in particular delayed the submission of any new or alternative Planning Application.
The plaintiff addressed the problems relating to the planning permission to the defendant at a meeting on or about the 18th July, 2000, at which it indicated that it was necessary to submit new planning permission in order to progress the project. The defendant refused to accept the contention that the project could not proceed under the original planning permission and also refused to extend the completion date of 24th November, 2000, as fixed by the agreement The plaintiff did not pay mesne rates due for the month of July. The defendant served Notice of Recission of the Agreement on 29th August, 2000, and purported
to rescind the agreement on 8th September, 2000. The plaintiff has contested the validity of the purported recission and issued and served the Plenary Summons in these proceedings on 27th October, 2000.
In its Statement of Claim, the plaintiff alludes, inter alia, to the following implied terms of the Agreement:
"c) the defendant would if necessary, extend the completion date under the agreement in circumstances where the plaintiff could not fulfill its obligations by virtue of the acts or omissions of the defendant
d) the defendant would not unreasonably withhold its consent to extend the completion date under the agreement in circumstances where the plaintiff could not fulfill its obligations by virtue of the acts or omissions of the defendant"
The plaintiff seeks a declaration that the purported Recission Notice was invalid. It also seeks specific performance of the agreement with a declaration recognising its entitlement to relief from forfeiture under the equitable jurisdiction of the Court.
In its Defence, the defendant denies that it has breached any terms or representations as alleged in the Statement of Claim. The defendant draws particular attention to the clause in the agreement whereby the plaintiff admitted that it had inspected same and that it had entered into the agreement solely on the basis of that inspection and the terms thereof. The defendant asserts that the plaintiff is not entitled to rely upon any implied term in the aforesaid agreement nor upon any representation of the nature alleged (the existence of both of which the defendant in any event denies). Furthermore, the defendant denies that there were any defects in the planning permission as alleged, and also denies that same was rendered inoperable for the plaintiffs intended purpose. Even if defects in the planning permission were found to exist, the defendant denies that either it or the listing of the building delayed the submission of any alternative planning application.
The defendant denies that the plaintiff had incurred expense in connection with the aforesaid property or that it had been entitled to withhold any payment of mesne rates until any problems pertaining to the property had been addressed. The defendant asserts that the Notice of Recission served on the plaintiff had been valid and entitled it to terminate the agreement between the parties. While denying that any alleged loss or damage on the part of the plaintiff (if such is found to have been suffered by it) had been caused by any act or omission of the defendants, the defendant reserves the right to furnish further particulars of contributory negligence as same come to hand. The defendant claims that the plaintiff is estopped by agreement and/or by its representation on March 15th, 2000, that the works provided for in the said agreement were in progress and would be completed on the due date, from claiming the relief sought herein.
The defendant, in applying to have the present proceedings struck out as an abuse of process on the basis that the plaintiffs claim must fail, has drawn the Court's attention to the following passage in the judgment of Hardiman J. in Supermacs v. Katesan (Naas) Limited [2001] 1 ELRM 401,405:
"The judge acceding to an application to dismiss must be confident that no matter what may arise on discovery or at the trial of the action the course of the action will be resolved in a manner fatal to the plaintiffs contention".
It is submitted by the defendant in the instant proceedings that a construction of the agreement governing the relations between the parties admits only of the conclusion that the plaintiff cannot sustain the cause of action it has sought to maintain herein.
It is submitted by the defendant that, in failing to fulfill its obligations under the agreement, the plaintiff had lost its entitlement to the lease. The power of recission had been expressly granted in the agreement, and the failure of the plaintiff to fulfill its commitments entitled the defendant to validly rescind the agreement. On the question of whether an implied term or terms existed so as to disentitle the defendant from rescinding in the circumstances of the instant case, the Court's attention was drawn to a passage from the Supreme Court judgment of Murphy J in Sweeney v. Duggan [1997] 21.R. 531,539-540: "Whether a term is implied pursuant to the presumed intention of the parties or as a legal incident of a definable character of contract, it must be not merely reasonable but also necessary. Clearly it cannot be implied if it is inconsistent with the express wording of the contract and furthermore it may be difficult to infer a term where it cannot be formulated with reasonable precision."
It is submitted by the defendant that the implied terms alleged in the instant case fail this test on both counts.
It is submitted by the defendant that there is no conflict of fact in the instant situation which discloses a legal basis for dispute between the parties. There is no version of the facts as presented by the plaintiff, it is submitted, which would entitle it to the relief which it claims. The defendant draws attention to the ruling of McCarthy J. in Sun Fat Chan v. Osseous Limited [1992] 11.R. 425
"His claim to be given time ... was based on an argument of an implied term of the contract. As I understand the law, to imply a term in a written contract, in its simple form, it requires the conclusion that if the parties had thought of it, they would have expressed such a term./ ....In my view, such a proposition is unacceptable."
The defendant alludes in paragraph 12 of its legal submissions to what it terms the "undisputed facts of this case". It lists them as follows:
"(a) The parties entered into, and agreed to be bound by the agreement of December 12,1999;
(b) The plaintiff knew that under the agreement it was compelled to completethe works by 24th November, 2000;
(c) By the time the plaintiff met the defendant's representative on March 15, 2000, he had neither commenced the works nor - it would seem - even become aware of the deficiencies of which he now complains in the planning permissions;
(d) There was no communication of any of these alleged difficulties until a meeting held on July 18, by which time the plaintiff again had not yet
commenced any of the works;
(e) The plaintiff did not pay mesne rates due in the month of July."
In its submissions, the plaintiff draws the Court's attention to the ruling of Costello J. in Barry v. Buckley [1981] I.R. 306, 308 in which he examined the inherent jurisdiction of the Court to strike out a claim as being frivolous and vexatious:
"This jurisdiction should be exercised sparingly and only in clear cases whose outcome depends on the interpretation of a contract or agreed correspondence. If, having considered the documents, the Court is satisfied that the plaintiffs claim must fail, then it would be a proper exercise of its discretion to strike out proceedings whose continued existence cannot be justified and is manifestly causing irrevocable damage to a defendant."
The plaintiff also drew the Court's attention to the judgment of McCarthy J. in the previously cited case of Sun Fat Chan v. Osseous Limited, where the judge stated at p. 428:
"Generally, the High Court should be slow to entertain an application of this kind and grant the relief sought.
Experience has shown that the trial of an action will identify a variety of circumstances perhaps not entirely contemplated at earlier stages in the proceedings; often times it may appear that the facts are clear and established but the trial itself will disclose a different picture. With that qualification, however, I recognise the enforcement of a jurisdiction of this kind as a healthy development in our jurisprudence and not one to be disowned for its novelty though there may be a certain sense of disquiet at its rigour. The procedure is peculiarly appropriate to actions for the enforcement of contracts, since it is likely that the subject-matter of the contract would, but for the existence of the action, be the focus of another contract."
It is submitted on behalf of the plaintiff that the appropriate approach for the Court to adopt when assessing whether to strike out its claim is for the Court to assume that every fact pleaded by the plaintiff in the Statement of Claim is correct and can be proved at trial and that every fact asserted by the plaintiff on affidavit is also correct and can be proved at trial. Such an approach was conceded as being appropriate by counsel for the defendant in Ennis v. Butterly [1997] 1 ILRM 28, 31-33. This approach was considered by McCracken J. in Ruby Property Company Limited v. Kilty (Unreported, High Court, !st December, 1999):
"If there is a dispute on the facts on affidavit, which is not resolved by admitted document, then it will be virtually impossible for a defendant to have proceedings struck out as being unsustainable. The remedy sought by the defendant is a remedy which has the effect of shutting out a citizen's right of access to the courts, which is a right which is very closely guarded and protected by the courts themselves, and by the Constitution. Therefore, if the defendants are to succeed in this motion, they must show that on facts which either are in dispute, or are disputed on grounds which can only be considered as frivolous or vexatious, the Court should allow the action to succeed."
The Court's attention was also drawn to the following observations of Barron J. in Jodifern Ltd. v. Fitzgerald (Unreported, Supreme Court, 21st December, 1999): (at pp.4-5).
"If the plaintiff's claim is based upon allegations of fact which will have to be established at an oral hearing, it is hard to see how such a claim can be treated as being an abuse of process of the Court. It can only be contested by oral evidence to show that the facts cannot possibly be true. This however would involve trial of that particular factual issue Where the plaintiffs claim is based upon a document as in the present case then clearly that document should be before the Court upon an application of this nature. If that document clearly does not establish the case being made by the plaintiff then a defendant may well succeed. On he other hand, if it does, it is hard to see how a defendant can dispute this prima facie construction of the document without calling evidence and having a trial of that question. /....
The function of the Court is to consider one question only, was it proper to institute the proceedings. This question must be answered in the light of the statement of claim and such incontrovertible evidence as the defendant may adduce. If the claim could never have succeeded, then the proceedings should be struck out. /.... I am satisfied that the trial judge applied the correct test: whether the plaintiff could succeed rather than whether he would."
It is submitted on behalf on the plaintiff that its inability to comply with its obligations under the agreement had been as a direct result of the defendant's acts and/or omissions, in particular in its failure to obtain appropriate planning permission, preventing the plaintiff from effectively commencing the works. In urging the Court to deny the defendant's application to have the current proceedings stricken out, the plaintiff submits that the disputes of fact can only be resolved at a full trial of the action and with the benefit of cross-examination.
Conclusions
The plaintiff in these proceedings provided no evidence that at any time from the date on which the parties entered into the agreement to the date on which the Notice of Recission was served, it retained the services of building expertise for the purpose of completing the works on or before the 24th November, 2000. The express terms of the contract with regard to recission and the relatively short time scale specified for completion of the works can have left the plaintiff in little doubt as to its obligations to act expeditiously in seeking to complete the works on time if it hoped to reap the benefits of the agreement from its perspective. The evidence before the Court clearly demonstrates that the plaintiff failed to honour its commitments under the agreement, and now seeks to frustrate the defendant's attempts to extricate itself from the ensuing imbroglio. I accept that the Court ought not imply a provision into a contract which would have the consequence of contradicting the express terms of the contract agreed between the parties. I also find it difficult to infer the implied terms relied upon by the plaintiff on the grounds that they cannot be formulated with reasonable precision. I accept the "undisputed facts" as outlined by the defendant at paragraph 12 in its submissions.
Conscious of the principle that the inherent jurisdiction of the Court to strike out proceedings should be exercised sparingly, I have come to the conclusion that the defendant has reached the required threshold in these proceedings. I am satisfied that the plaintiffs claim must fail. The continued existence of these proceedings cannot be justified and is manifestly causing irrevocable damage to the defendant. I order accordingly that the plaintiffs claim be struck out.