The Madison Principle: Selective Strike-Out and Flexibility in Option Notice Compliance under Ireland’s Revised Order 19 Rule 28

1. Introduction

Madison Retail Ltd v Carlow SRH Ltd & Musgrave Ltd ([2025] IEHC 454) concerns a failed attempt by the defendants to strike out proceedings in which Madison Retail (“Madison”) seeks specific performance of a 2017 option to repurchase the leasehold interest in its Centra supermarket. Justice Nessa Cahill’s decision is the first detailed High Court consideration of the newly worded Order 19, rule 28 of the Rules of the Superior Courts (“RSC”) which now codifies four alternative grounds for strike-out. The case also revisits perennial questions on the exercise of contractual options—waiver, estoppel, time-limits and part performance.

Parties:

Plaintiff: Madison Retail Limited, operator of Centra, Maynooth.
Defendants: (1) Carlow SRH Limited (title holder) and (2) Musgrave Limited (parent/guarantor).

Key Issues:

Whether Madison’s pleadings disclose a reasonable cause of action or are “bound to fail” under O 19 r 28.
Whether the option was validly exercised despite non-compliance with formal notice provisions.
Whether waiver, estoppel or part performance could salvage the claim if formalities were unmet.
Whether the court should strike out part of a claim (the part-performance limb) while allowing the remainder to continue.

2. Summary of the Judgment

Justice Cahill refused to strike out the proceedings save for the discrete plea of part performance, which she found hopeless. She held:

The defendants did not discharge the burden of proving that Madison’s core causes of action (exercise of option, waiver and estoppel) were bound to fail.
The documentary record, though inconsistent, left room for a trial judge to find that the option had been exercised during the contractual window, potentially with an agreed variation (waiver of CPI uplift).
Waiver and estoppel remained arguable because the defendants engaged for almost two years with Madison on the explicit footing of “the Option”.
The plea of part performance was unsustainable because (i) the acts relied on were not unequivocally referable to performance, (ii) they were often the defendants’ acts, and (iii) the Statute of Frauds mischief was absent.
The court exercised its newly-confirmed power under O 19 r 28 to strike out part only of a claim.
Costs were provisionally awarded to Madison, subject to short written submissions.

3. Analysis

3.1 Precedents Cited and their Influence

O’Malley v NSAI [2024] IEHC 500 – Simons J’s comments on the effect of the revised O 19 r 28 informed Cahill J’s approach: the old dichotomy between the rule and the inherent jurisdiction has largely disappeared.
IBRC v Purcell [2016] 2 IR 83 – Provided the classic ten-point summary of strike-out principles (burden on defendant, sparing jurisdiction, treat plaintiff’s case at its “high-water mark”). Cahill J reaffirmed those principles remain intact post-amendment.
Keohane v Hynes [2014] IESC 66 – Clarke J’s three-tier guidance on the limited factual analysis permissible on a strike-out motion was pivotal. Cahill J relied on it to justify leaving disputed factual inferences for trial.
Moylist Construction v Doheny [2016] 2 IR 283 – Warned courts against dismissing fact-light but legally complex claims. Helped persuade Cahill J that complexities around option law warranted a full trial.
Knockacummer Wind Farm v Cremins [2018] IECA 252 – On strict compliance with option conditions and “time of the essence”. The divergent judgments (Hogan & Peart JJ v Whelan J) allowed Cahill J to treat strictness as context-dependent, strengthening Madison’s waiver argument.
Fennell v McDonagh [2017] IEHC 98, Cassidy v Baker (1969) 103 ILTR 40 – Cited by defendants for rigid enforcement of option formalities; Cahill J distinguished them on factual grounds.
Mackie v Wilde (No 2) [1998] 2 IR 578 & Steadman v Steadman [1976] AC 536 – Leading authorities on part performance. Informed Cahill J’s rejection of that limb.

3.2 The Court’s Legal Reasoning

The judgment unfolds in four analytical steps:

Codified Strike-Out Test. Cahill J reads the four grounds in r 28 as cumulative and overlapping. The onus lies squarely on the moving party.
Fact-Law Interface. Applying Keohane, she stops short of definitive factual findings. She treats conflicting affidavits as demonstrating that a “stateable” case remains.
Option Exercise. The documentary trail (emails, draft contract, landlord negotiations) could be construed as (a) an exercise of the option within the First or Second Option Period, coupled with (b) an agreed price variation (waiver of CPI). Because the Option Agreement itself contemplated an “agreed or determined” price, such variation did not automatically extinguish the original option framework.
Ancillary Doctrines.
- Waiver by conduct: prolonged negotiations without insisting on service formalities may suffice.
- Estoppel: drawing on Whelan J’s dicta in Knockacummer, a shared assumption over two years could estop the defendants from resiling.
- Part Performance: fails because the acts were not unequivocal acts of Madison in performing an oral contract; the Statute of Frauds rationale was absent.

3.3 Impact of the Judgment

The decision sets two salient precedents:

The “Madison Principle” – Selective Strike-Out. The High Court expressly exercised its power to strike out part of a claim (part-performance plea) while allowing the remainder to proceed. The ruling confirms that, under the revamped O 19 r 28, courts may surgically remove hopeless limbs without dismantling the entire action.
Flexibility in Option Formalities. While not deciding the merits, Cahill J signals that Irish courts will be slow to dismiss claims alleging informal exercise of options where the parties’ conduct suggests mutual recognition of the option’s activation. This may embolden litigants to rely on waiver and estoppel in option disputes—especially in commercial rescue contexts where strict formalism may defeat equity.
Guidance for Practitioners.
- Moving parties must now separate attack lines: some limbs might be vulnerable even if the core survives.
- Where option notices are informal, defendants should promptly object in writing or risk waiver/estoppel arguments.
- Pleadings invoking part performance must identify acts by the claimant that are unequivocally referable to the pleaded contract.

4. Complex Concepts Simplified

Order 19, Rule 28 (RSC): A procedural rule allowing the court to summarily strike out any claim (or part) that (i) discloses no reasonable cause of action, (ii) abuses process, (iii) is bound to fail, or (iv) has no reasonable chance of success.
Option Agreement: A contract granting one party the right, but not the obligation, to purchase property on specified terms within a defined period.
Waiver: The voluntary relinquishment of a known right. It can be express or inferred from conduct inconsistent with insisting on strict rights.
Estoppel: A rule preventing a party from asserting a position contrary to one it previously adopted, where the other party relied on the earlier position to its detriment.
Part Performance: An equitable doctrine allowing enforcement of certain oral land contracts where one party has undertaken acts that unequivocally point to the contract and would render it inequitable for the other party to rely on the Statute of Frauds.
Strike-Out vs Inherent Jurisdiction: Prior to the 2023 amendments, courts often relied on inherent jurisdiction when striking out cases. The new O 19 r 28 largely subsumes this, but the jurisprudential yardsticks (sparingly, in clear cases) continue to apply.

5. Conclusion

Madison Retail v Carlow SRH is a nuanced pronouncement on two fronts: civil procedure and contractual option law. On procedure, it crystallises the court’s ability to excise hopeless strands of a claim without prejudicing arguable ones—the “Madison Principle”. On substance, it underscores the Irish courts’ reluctance to dispose of option disputes summarily where parties’ conduct suggests a shared understanding that the option was alive, even if formal notice provisions were not honoured to the letter.

The judgment therefore serves as a cautionary tale for commercial actors: if parties wish to preserve the protective shell of formal requirements, they must enforce them promptly and unequivocally. Conversely, for claimants, the decision offers a roadmap for resisting strike-out by assembling a coherent narrative of waiver, estoppel, and contemporaneous conduct—even in the face of technical defects.