Summary of Judgment — Commercial Court

Factual and Procedural Background

This judgment, delivered by Judge Twomey, concerns an interlocutory application by two defendants, Company A (the first-named defendant) and Company B (the seventh-named defendant) (collectively, "Company A and Company B"), to strike out specified pleas in the Points of Defence filed by the Plaintiffs. The disputed pleas arise in response to Points of Claim brought by Company A and Company B following an earlier judgment of Judge McDonald and an order of 20 February 2024. That earlier judgment (upheld on appeal) discharged an interlocutory injunction which had been granted to the Plaintiffs on 26 July 2017 restraining Company A from disposing of certain lands (referred to in this summary as "The Site"). Judge McDonald ordered an inquiry into damages to be held by the High Court because of an undertaking given by the Plaintiffs (to be liable for damages if the interlocutory injunction should not have been granted). The Points of Claim assert that Company A (the registered owner of The Site) is entitled to €20,822,000 by way of damages. The Plaintiffs' Points of Defence contain a number of pleas disputing the basis and quantum of those claimed damages. Company A and Company B seek strike-out of four specific pleas under Order 19 Rule 27 of the Rules of the Superior Courts. Judge Twomey heard the strike-out application and refused to strike out the disputed pleas, for reasons explained below.

Legal Issues Presented

1. Whether specified pleas in the Plaintiffs' Points of Defence are irrelevant to the inquiry into damages ordered by Judge McDonald and therefore ought to be struck out under Order 19 Rule 27 of the Rules of the Superior Courts.
2. Whether the matters pleaded by the Plaintiffs (including allegations about beneficial ownership, alleged illegality/complicity by agents, and the ability to obtain finance) are matters that the judge conducting the damages inquiry may consider when assessing the appropriate quantum of damages.
3. What standard applies to strike out pleas on relevance grounds in the context of an application to enforce a cross-undertaking in damages (i.e., whether pleadings should be struck out only where it is clear they are irrelevant).

Arguments of the Parties

Company A and Company B's Arguments

• They contend that four specific pleas in the Plaintiffs' Points of Defence are irrelevant or concern issues already dealt with at trial and therefore should be struck out.
• They rely on the conclusiveness of legal title (Company A as registered owner) and previous findings by Judge McDonald to argue that issues such as beneficial ownership and certain allegations of wrongdoing are not relevant to the damages inquiry.
• They accept that contributory negligence and mitigation may be pleaded but object to inclusion of particular allegations concerning the conduct of an agent (Attorney Millett) on the basis that those matters are res judicata or otherwise irrelevant to the damages assessment ordered by Judge McDonald.

Plaintiffs' Arguments

• The Plaintiffs assert that the disputed pleas are relevant to the question of whether Company A would in fact have obtained the finance necessary to develop The Site and thus to the quantum of loss claimed by Company A.
• They point to evidence and pleadings suggesting complex and conflicting matters about beneficial ownership of The Site and of Company A, the role of agents (including Attorney Millett and Attorney Desmond) and repeated inaccuracies in representations to planning authorities, all of which could affect a lender's assessment and therefore the availability of finance.
• The Plaintiffs submit that even where some factual matters were considered in the main trial, that does not automatically render them irrelevant to a separate discretionary inquiry into damages; the judge conducting the damages inquiry must be free to consider matters that bear upon the amount of loss suffered.
• The Plaintiffs also note that Company A reserves the right to rely upon evidence adduced during the earlier proceedings, including interlocutory material, and contend that it would be inconsistent to allow Company A to rely on such evidence while preventing the Plaintiffs from relying on other material from the same proceedings.

Table of Precedents Cited

Court's Reasoning and Analysis

The court proceeded by applying the established standard for striking out pleadings for irrelevance: pleadings should only be struck out where it is clear they are irrelevant (as summarised from Company E v Company F). The court emphasised several contextual features that informed the analysis:

• The inquiry into damages arises from an undertaking given by the Plaintiffs in connection with an interlocutory injunction that was ultimately found to have been wrongly granted. Judge McDonald discharged the injunction and ordered the damages inquiry; that decision was upheld on appeal.
• The judge who conducted the main trial (Judge McDonald) is not available to conduct the damages inquiry. The court observed that the trial judge is normally best placed to assess damages because he/she heard the evidence, but in this case a different judge must undertake the damages assessment. That factor warrants caution when deciding whether to exclude matters from the pleadings, especially in a long and complex case with extensive factual material.
• The litigation was exceptionally long and complex (numerous interlocutory orders, a trial lasting nearly two months, and a lengthy 317-page judgment). The court held that this complexity increases the risk that a judge new to the case may be at a disadvantage in determining what is relevant to a damages assessment; as a result, the court should be cautious before excluding pleas that could bear upon the damages inquiry.
• The court examined each of the disputed pleas in turn against those principles and the concrete facts pleaded or evidenced in the record before it. Key threads in the analysis were:
  • Beneficial ownership and related uncertainty: The court noted multiple conflicting statements and pleadings about who beneficially owned The Site and the company that held legal title (Company A). There were pleaded allegations, planning documentation inconsistencies, and pleadings about unregistered charges and alleged lending arrangements (involving Company C and Company D). The court concluded that these matters might affect a lender's assessment and thus could be relevant to whether Company A would have obtained finance and so to the quantum of loss.
  • Alleged illegality and agent conduct: The court found that there was an evidential link between certain agents (Attorney Millett and Attorney Desmond) and the Kenny family / Company A and Company B. The court stressed that, where an alleged agent of the claimant in a damages inquiry has committed wrongdoing, that fact may be relevant to the discretionary exercise of assessing damages — for example, it may bear upon whether a principal should recover full damages where an agent was involved in illegality. The court relied on the two-stage approach (should the undertaking be enforced and, if so, has the defendant suffered damage) to show why alleged illegality can be pertinent to quantum.
  • Res judicata and previous findings: The court acknowledged that Judge McDonald had made findings (including findings that Attorney Millett had acted unlawfully and awards of modest damages to the Plaintiffs for certain wrongdoing). But the court explained that the damages inquiry is a separate discretionary process focused on the defendant's loss and whether, and how much, should be recovered. A prior finding against an agent does not automatically preclude consideration of the impact of that agent's conduct upon the claimant's entitlement to damages in a subsequent inquiry; consequently, the court did not consider the pleas to be barred by res judicata in the context of the damages assessment.
  • Financial capacity and expert evidence: Company A's Points of Claim and expert report asserted a sizeable loss figure. The Plaintiffs highlighted facts and replies in the record suggesting Company A (or its development vehicle) had limited history, no bank account at relevant times, had not prepared a business plan, and, in some instances, had not approached lenders. The court considered that the pleadings about the availability of finance for Company A, particularly where beneficial ownership is unclear and individuals associated with Company A had prior exposures to NAMA, could be relevant to whether Company A would have obtained the financing necessary to realize the alleged loss.
• Procedural parity: The court noted that Company A expressly reserved the right to rely on the whole earlier judgment and any evidence adduced during the prior proceedings "regardless of whether same is expressly referenced" in its Points of Claim. The court observed that it would be inconsistent to allow Company A to rely broadly on earlier material while preventing the Plaintiffs from relying on other material from the same proceedings.
• Practical consequence of striking out: The court emphasised that declining to strike out a plea does not mean the court endorses its strength; it only permits the party to advance the point at the forthcoming inquiry. Given the complexity of the factual matrix and the potential relevance of the pleaded matters to whether finance would have been available and to any discretionary reduction in damages for illegality or agent misconduct, the court concluded that it could not say it was "clear" the pleas were irrelevant.

Holding and Implications

HOLDING: The court refused the application to strike out the disputed pleas. In the court's words, it was not clear that any of the disputed pleas were irrelevant, and therefore the strike-out application was refused.

Implications:

• The Plaintiffs remain permitted to pursue the contested pleas at the forthcoming inquiry into damages. The court expressly declined to assess the merits of those pleas at this stage; it only determined that they are not clearly irrelevant and so should not be excluded from the considerations of the judge who will conduct the damages assessment.
• The decision preserves for the damages inquiry a range of factual issues including (a) competing claims and uncertainties about beneficial ownership of The Site and of the corporate owner; (b) allegations concerning the conduct of agents (including alleged unlawful acts) and whether such conduct bears upon the claimant's entitlement or the quantum of damages; and (c) matters as to the likely availability of funding to develop The Site, including the track record and status of potential funders and promoters.
• The court directed that the matter be provisionally listed for mention a week from delivery to deal with final orders and costs, but allowed the parties liberty to notify the Registrar if that listing proves unnecessary. The court reminded the parties of the onus on lawyers to adopt a broad- brush approach to costs and to avoid inefficient and nit-picking applications (citing an appellate authority on costs practice).
• No new binding legal principle was established; the court applied existing authorities on strike-out and the enforcement of undertakings in damages to the particular facts of the case and made a case-specific exercise of discretion to refuse the strike-out application.

This summary is based solely on the content of the provided judgment and anonymises all personal and entity names in accordance with the instruction set for this summary.