Clarion Quay Management Company LTD By Guarantee v Dublin City Council & Anor (Approved)

Factual and Procedural Background

This judgment concerns proceedings commenced by Plaintiff against Defendant and Campshire Partnership (referred to as Campshire) concerning a mixed-use development called Clarion Quay located in The City. Plaintiff is the owners' management company for the development. Defendant succeeded to the rights and obligations of its predecessor, the Dublin Docklands Development Authority (DDDA), which entered into a joint venture agreement (JVA) with Campshire for the development. Plaintiff and Defendant (and another entity) entered into a Management Company Agreement (MCA) relating to Clarion Quay. Plaintiff contends there are multiple defects in the development for which Defendant and Campshire are liable.

Following pleadings and motions, the High Court ordered the trial of four preliminary issues relating to the interpretation of the MCA, applicability of certain general conditions of sale, reliance on the Multi-Unit Developments Act 2011 (MUDs Act), and obligations of the defendants as developers under the MUDs Act. The issues were to be determined on pleadings and agreed facts without full evidential hearings.

Legal Issues Presented

1. Whether Defendant (and its predecessor) is bound by general condition 36(d) of the Law Society General Conditions of Sale (1995 edition);
2. Whether the terms pleaded at paragraph 20 of the statement of claim are implied terms of the MCA;
3. Whether Plaintiff is entitled to rely on the MUDs Act in these proceedings;
4. If so, whether Defendant and Campshire, as developers within the meaning of the MUDs Act, are obliged (a) to complete the development of the common areas in accordance with the Building Regulations and (b) to indemnify Plaintiff in respect of all claims made against it arising from acts or omissions by the defendants in connection with the development.

Arguments of the Parties

Plaintiff's Arguments

• Clause 10 of the MCA incorporates the general conditions of sale, including condition 36(d), which warrants substantial compliance with the Building Control Act and requires provision of a certificate of compliance on completion. There is no stipulation in the MCA excluding this condition.
• Clause 4 of the MCA is a standard estate variation clause allowing alteration or discontinuance of the development layout but does not exclude obligations to build in compliance with building regulations or to avoid defects.
• The terms pleaded at paragraph 20 of the statement of claim (including obligations to complete the development and ensure fitness for occupation) are implied terms either as a matter of law (relying on precedent concerning contracts for sale of dwelling houses in course of construction) or as a matter of fact based on the presumed intention of the parties and the contractual matrix.
• Plaintiff contends it is entitled to rely on the MUDs Act in these proceedings and to seek reliefs thereunder, including declarations and damages for breach of statutory duty, notwithstanding the Circuit Court's exclusive jurisdiction under the Act for certain applications, relying on constitutional principles and the broad powers of the High Court.
• Regarding issue (4), Plaintiff contends Defendant and Campshire, as developers, are obliged under the MUDs Act to complete the common areas in accordance with Building Regulations and to indemnify Plaintiff against claims arising from their acts or omissions.
• Plaintiff argues the MUDs Act provisions relied upon have retrospective effect and apply to the development despite completion and sales occurring before the Act's commencement.

Defendant's and Campshire's Arguments

• Defendant and Campshire contend the MCA is not a building contract and clause 4 expressly excludes any obligation on Defendant to complete the development or guarantee quality; thus, general condition 36(d) does not apply as it is inconsistent with the MCA.
• They deny the existence of any implied terms pleaded at paragraph 20, distinguishing the case law relied upon by Plaintiff on the basis that the MCA is not a contract for the construction of a dwelling house for immediate occupation but a conveyance of common areas and reversionary interests to a management company.
• They argue the MUDs Act provisions relied upon do not apply retrospectively to impose new obligations on them, particularly as the development was substantially completed before the Act commenced.
• They assert the Circuit Court has exclusive jurisdiction over claims based on the MUDs Act (ss. 24 and 26) and Plaintiff is not entitled to rely on the Act in these High Court proceedings. They argue that s. 29 of the Act does not override this exclusivity.
• They submit that s. 7 of the MUDs Act does not create new obligations but preserves existing ones, and s. 9(2) indemnity provision applies only where transfer occurs before completion and relates to ongoing works, not a freestanding indemnity.
• They maintain that the provisions relied on by Plaintiff are prospective and do not impose retrospective liabilities.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first considered the contractual construction principles, emphasizing an objective approach considering the contract language, context, and commercial common sense without rewriting the contract.

On Issue (1), the court found that general condition 36(d) is incorporated into the MCA by clause 10 and is not excluded by any stipulation or inconsistency in the MCA, including clause 4. Clause 4, though granting Defendant extensive rights to alter or discontinue the development, does not negate the warranty of substantial compliance with building regulations required by general condition 36(d). The absence of an express exclusion and the natural meaning of the provisions led to the conclusion that Defendant is bound by general condition 36(d).

On Issue (2), the court rejected Plaintiff's contention that certain terms pleaded at paragraph 20 are implied in the MCA either as a matter of law or fact. The court held that the MCA is not a contract for the construction of a dwelling house in the course of erection, a necessary condition for the implication of such terms under precedent. The nature and purpose of the MCA—as a conveyance of common areas and reversionary interests to a management company—distinguishes it from the contracts in cases cited by Plaintiff. Furthermore, the conditions for implying terms as a matter of fact, including necessity for business efficacy and obviousness, were not satisfied. Clause 4 of the MCA and other express terms negate the implication of an obligation to complete the development. The court also found difficulties in applying terms relating to fitness for immediate occupation to common areas and commercial units. Accordingly, the terms pleaded are not implied terms of the MCA.

On Issue (3), the court analyzed the MUDs Act provisions concerning jurisdiction. Sections 24 and 26 confer exclusive jurisdiction on the Circuit Court to hear and determine applications under s. 24. Plaintiff’s attempt to rely on the MUDs Act in the High Court by framing claims as declaratory relief or damages for breach of statutory duty was rejected. The court held that such claims fall within the exclusive jurisdiction of the Circuit Court under s. 26, notwithstanding Plaintiff’s failure to make an application under s. 24 in these proceedings. The court distinguished prior case law relied on by Plaintiff and emphasized the clear and explicit statutory language conferring exclusivity. Section 29 of the MUDs Act does not override this exclusivity but allows parties to enforce pre-existing contractual or statutory rights in addition to rights under the MUDs Act. Plaintiff may maintain claims under the MCA and other statutory provisions (not based on the MUDs Act) in the High Court.

On Issue (4), the court addressed the substantive obligations under the MUDs Act provisions on which Plaintiff relies, assuming arguendo that Plaintiff is entitled to rely on the Act and that Defendant and Campshire are "developers" within its meaning. The court found that the provisions relied on (ss. 7, 9(2), 31(2) and schedule 3) do not have retrospective effect. The court relied extensively on the High Court decision in Lance Investments/Lee Towers, which distinguished between orders enforcing pre-existing contractual obligations (which may have retrospective effect) and remedial orders imposing new obligations (which do not). Section 7 preserves existing obligations but does not create new ones. Section 9(2) indemnity is contextual and applies prospectively to works during completion phases after transfer, not as a freestanding indemnity. Section 31(2) and schedule 3 require furnishing documentation after the development stage ends, which on Plaintiff’s case has not yet occurred, and do not impose substantive retrospective obligations.

The court concluded that the statutory provisions relied upon do not impose on Defendant or Campshire an obligation to complete the common areas in accordance with Building Regulations or to indemnify Plaintiff in respect of claims arising from acts or omissions in the course of works connected with the development, insofar as those obligations are sought under the MUDs Act.

Holding and Implications

The court's determinations on the issues directed to be tried are as follows:

• Issue (1): Defendant is bound by the provisions of general condition 36(d) of the Law Society General Conditions of Sale (1995 edition).
• Issue (2): The terms pleaded at paragraph 20 of the statement of claim are not implied terms of the MCA.
• Issue (3): Plaintiff is not entitled to rely on the MUDs Act in these High Court proceedings as the Circuit Court has exclusive jurisdiction under s. 26 of the Act for claims relying on or referring to the MUDs Act. Plaintiff is not precluded from maintaining other causes of action not based on the MUDs Act in either court.
• Issue (4): The provisions of the MUDs Act relied on by Plaintiff do not have retrospective effect. If Defendant and Campshire are developers within the meaning of the Act (not decided here), they are not obliged under those provisions to complete the common areas in accordance with the Building Regulations or to indemnify Plaintiff for claims arising from acts or omissions in connection with the development.

The decision confines the MUDs Act-related claims to the Circuit Court, preserving the High Court’s jurisdiction over contractual and other statutory claims. It clarifies the scope of contractual obligations under the MCA and limits the implication of terms concerning quality and completion. No new precedent beyond the direct application of existing principles is established.