Keegan Quarries Ltd v Mc Guinness & Anor

Factual and Procedural Background

The Plaintiff, a quarrying and ready-mix concrete manufacturing company headquartered in County Meath, entered into a contract dated 24th January 2007 with the first Defendant for the purchase of approximately 30 acres of land including a quarry ("the Lands") at Hilltown Little, County Meath. The contract was for €7 million. The Plaintiff's claim against the first Defendant is for damages arising from alleged fraudulent or negligent misrepresentations related to the quarry's operational history and compliance with planning laws.

The first Defendant and his brothers acquired the Hilltown farm in 1986, with quarrying activities intermittently carried out on the lands by various parties from 1989 onwards. The first Defendant applied for registration of the quarry in 2005 under section 261 of the Planning and Development Act 2000, asserting that the quarry had been in operation prior to 1 October 1964. The Plaintiff and the first Defendant had previously entered into a conditional contract in 2005 which was rescinded in 2006.

Following the 2007 contract, the Plaintiff commenced quarrying operations, which led to proceedings initiated by local residents in 2008 to restrain quarrying activities on the grounds that the quarry was not in use prior to 1964. The Court ruled in favour of the residents, restricting the Plaintiff's quarrying activities. The current proceedings were commenced by the Plaintiff in January 2011, seeking damages for misrepresentation and an order to void a 2010 transfer of property interests from the first Defendant to the second Defendant.

Legal Issues Presented

1. Whether the first Defendant made fraudulent misrepresentations regarding the quarry's operational history prior to 1964 and other related facts in the contract for sale.
2. Whether the Plaintiff relied on these misrepresentations and was induced to enter into the contract.
3. The extent of damages recoverable by the Plaintiff for the alleged fraudulent misrepresentations and breach of contract.
4. Whether the transfer of property interest from the first Defendant to the second Defendant in 2010 was a fraudulent conveyance under section 74 of the Land and Conveyancing Law Reform Act 2009 and should be declared void.

Arguments of the Parties

Plaintiff's Arguments

• The first Defendant knowingly or recklessly made false representations that the quarry had been operated prior to 1964, which was untrue.
• The Plaintiff relied on these representations in deciding to purchase the quarry lands and suffered damages as a result.
• The false representations included the operational history stated in the section 261 application and replies to requisitions on title.
• The transfer of property interest to the second Defendant was intended to defraud the Plaintiff and should be set aside.

Defendants' Arguments

• The false representation regarding pre-1964 quarry operation was made innocently, based on information from a previous owner, Major Boylan.
• The Plaintiff did not rely on the pre-1964 use representation but rather on the quarry's registration by the planning authority and the imposition of conditions under section 261.
• The losses claimed were caused by the Plaintiff's own decision to carry out intensive quarrying operations without planning permission, not by the alleged misrepresentations.
• The 2010 transfer was made for health reasons and was not intended to defraud the Plaintiff.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court carefully examined the evidence, including contemporaneous documents, witness credibility, and statutory context, to determine whether the first Defendant made fraudulent misrepresentations regarding the quarry's operational history and other related facts.

The Court found that the first Defendant knowingly or recklessly made false representations in the section 261 application and related communications that the quarry had been in operation since approximately 1958 and prior to 1964. The Defendant's claim that these statements were made innocently based on conversations with a previous owner was disbelieved due to inconsistencies, lack of corroboration, and the Defendant's overall lack of credibility.

The Court accepted that the Plaintiff's managing director relied on these false representations, alongside the quarry's registration and imposed conditions, in deciding to enter into and complete the purchase contract. Legal advice received by the Plaintiff before contracting underscored the importance of the accuracy of the section 261 application, reinforcing reliance on the Defendant's representations.

Regarding causation of loss, the Court distinguished between losses directly caused by the misrepresentations and those arising from the Plaintiff's own decision to operate the quarry intensively without planning permission. The Court concluded that the losses related to quarrying operations post-purchase and subsequent legal proceedings were not caused by the misrepresentations but by the Plaintiff's operational decisions.

On breach of contract, the Court found that the Defendant breached a warranty that no development requiring planning permission had occurred since 1964, as the quarry was being sold with the benefit of a letter imposing conditions but no planning permission. Special conditions in the contract did not exclude this warranty.

Finally, the Court addressed the 2010 transfer of property interest from the first to the second Defendant, finding that the transfer was made with the intent to defraud the Plaintiff and was therefore voidable under section 74 of the Land and Conveyancing Law Reform Act 2009.

Holding and Implications

The Court held in favour of the Plaintiff on the claims of fraudulent misrepresentation and breach of contract against the first Defendant, awarding damages for the purchase price overpaid less the market value of the lands without the benefit of pre-1964 quarry use, plus related costs and expenses to be finalized.

The Court declared the 2010 transfer of property interest from the first Defendant to the second Defendant void pursuant to section 74 of the Land and Conveyancing Law Reform Act 2009.

The decision results in the Plaintiff recovering damages for the fraudulent inducement to purchase the quarry lands and prevents the Defendants from defeating the Plaintiff's claim by transferring property interests. No new legal precedent was established; the ruling applies existing principles to the facts presented.