Supporting Documents:
 
SUPREME COURT
DETERMINATION ROSBEG PARTNERS PLAINTIFF DEFENDANT
APPLICATION FOR LEAVE TO APPEAL TO WHICH ARTICLE 34.5.3° OF THE CONSTITUTION APPLIES
RESULT: The Court grants leave to the Defendant to appeal on grounds set out at paragraph 14 hereof.
REASONS GIVEN:
1 This is an application for leave to appeal against the decision of the Court of Appeal (MacMenamin J, Finlay Geoghegan and Irvine JJ concurring), of the 1st of June 2016 [2016] IECA 161, in which it dismissed the appeal against the judgment and order of the High Court (Peart J delivered on the on 8th day of November 2013 [2009] IEHC 494), which awarded to the plaintiff the sum of €11,077,209 million together with costs in respect of professional negligence. Negligence was not an issue in these proceedings. The issue therefore was the assessment of damages and in particular questions of causation and mitigation of loss. The judgments of the High Court and the Court of Appeal are readily available. Furthermore, the defendant/appellant’s application and the plaintiff/respondent’s notice are also published as part of this determination process. Accordingly it is not necessary to set out in great detail the facts of the case.
2 It is sufficient to say that the defendant firm of solicitors acted for the plaintiff company when it acquired property in 1994. The property consisted of five different lots having five separate titles. Lot 3 was partly unregistered and registered title. The registered component was part of Folio 23011F. It is a basic component of a purchaser’s solicitor’s duty to secure the registration of the title of the purchaser in the Land Registry in respect of registered land. The vendor’s solicitors had provided an undertaking to cooperate with Land Registry queries. An application was made to register the title. Queries were raised, there was further correspondence, and pursuit of the vendor’s solicitors, but by March 2000 the defendant’s file was inactive. Activity only resumed in September 2007 in the circumstances giving rise to these proceedings. There is no doubt and it is not contested that the failure of the solicitors to complete the registration was negligent.
3 In late 2007 negotiations were entered into by the plaintiff with an adjoining land owner, and successful businessman, to sell the lands. It should be said that at this point, the original vendor to the plaintiff company had sold its remaining lands in Folio 23011F to another purchaser. Because there had been no registration of the plaintiff’s interest and subdivision of the folio, there was no record in the Land Registry of the plaintiff’s ownership of that portion of the lands in Folio 23011F which had been sold to it and indeed it appeared that all the lands in that folio were owned by another party. However, it is accepted that at all times the plaintiff company had title to all the property including that portion in Folio 23011F, that the difficulty involved was securing the registration of its ownership, that that task posed no insuperable problems but could take some time. Furthermore it appears to have been agreed that it would be possible to sell the lands without first securing the registration if the contract for sale was appropriately drawn and special conditions inserted.
4 In late September 2007 the plaintiff’s received an offer of €10m from the adjoining landowner to purchase the entire property, subject to contract, and subject to confirmation of a total site area. The High Court judge found that the plaintiff company had decided to accept this offer, and furthermore that the fact that no map had been lodged with and accepted by the Land Registry meant that it was not possible to confirm the total site area. The judge found that if the title had been properly registered, this transaction could have been speedily concluded. While it was accepted it was possible to conclude an agreement subject to appropriate conditions, the process did not proceed. Instead the plaintiff set about regularising the registration of the property in the Land Registry, and contact with the prospective purchaser continued against the background of a property market that was starting its decline. The plaintiff company received further offers of €8 million and €6 million from the same prospective purchase, neither of which were accepted. In August 2008 the plaintiff company was invited to give the minimum price which they would accept for the property. The plaintiff indicated it would be prepared to sell it at a price of €8.5 million. The prospective purchaser was not willing to pay more than his last offer of €6 million. At or around this point the plaintiff’s title was registered and therefore the lack of registration could no longer be said to be an inhibition to sale. Indeed, the continued contact and the further offers indicated as much.
5 It was at all times accepted that the prospective purchaser was the person likely to pay most for the site because he owned the adjoining lands. By the date of commencement of the proceedings the value of the property had dropped to €2.5 million, and by the date of the hearing in the High Court the judge accepted the defendant’s evidence that the land was worth €1.5 million. The High Court judge held that it was reasonable for the plaintiff not simply to accept the next offers made. The principal of the Plaintiff company was not foolhardy irresponsible or negligent in trying to negotiate further. Accordingly, he awarded damages against the defendant of €8.5 million (being the difference between the €10 million offer in September 2007, and the €1.5 million value at the time of the High Court hearing) together with consequential losses in increased interest charges incurred by the plaintiff in the amount of a minimum of €1.5 million, and also increased liability for Capital Gains Tax, the rate having increased from 20% to 33% in the period between the 2007 and the hearing in the High Court. As set out above total damages exceeded €11 million.
The Court of Appeal Decision
6 The Court of Appeal dismissed the plaintiff’s appeal relying on the decision of the Supreme Court in Hay v O’Grady [1992] 1 IR 210. Much of the appeal concerned the defendant’s contention that there had been no agreement to accept the €10 million offer. The Court accepted that the judge’s conclusion in this regard was an inference but at page 24 said:
“Applying the principles enunciated in Hay v O’Grady the question which must be asked is, whether there was evidence upon which those inferences could be drawn?”
7 The Court also upheld the decision of the trial judge on the question of mitigation of damage. It observed that the reasonableness of the plaintiff’s efforts to mitigate was a question of fact. It said that appellate courts rarely found it appropriate to interfere with the conclusion of a trial judge either based on evidence or the lack of satisfactory evidence. The onus lay on the defendant to establish that there was a failure to mitigate such as by demonstrating there would have been a deal at €6 million and there was no cogent evidence on this. Accordingly the Court of Appeal dismissed the appeal.
8 The defendant applied to the Supreme Court for leave to appeal and contended that the issue was one of general importance because it was said that:
“The failure to differentiate on appeal between findings of fact and inferences of fact constitutes a serious erosion of the principles in Hay v O’Grady and will likely lead to inconsistency in the High Court”;
And that:
“The refusal to apply any element of objectivity in the assessment of contributory negligence and the duty to mitigate loss inevitably will lead to extraordinary unfairness to defendants in the assessment of damages and an impossibility to consistently address the underwriting of risk. These are issues of the utmost public importance.”
9 Two specific grounds of appeal relied on are as follows:
10 The successful plaintiff for its part points out, with some merit, that while the application for leave refers to contributory negligence, (and it is referred to in the judgment) contributory negligence had never been pleaded. Furthermore, it also points out that since the trial judge found that the conduct of the plaintiff was reasonable, that was a conclusion which was objective rather than subjective, and was clearly addressed as such by the Court of Appeal at paragraphs 53-54 of the judgment. The plaintiff also contended that the appeal was purely on an issue of fact, and had not real prospect of success in the Court of Appeal and it did not involve any matter of general public importance.
Discussion
11 The jurisdiction of the Supreme Court to hear appeals is now controlled by the terms of the article 34.5 of the Constitution introduced by the passage of the 33rd amendment to the Constitution enacted on 1st November 2013, and the subsequent enactment into law of the Court of Appeal Act 2014. Since then this Court has through its determinations sought to set out as clearly as possible the basis upon which leave to appeal may be sought, and if appropriate, granted. The fundamental test is the establishment either that the decision involves a matter of general public importance or that is in the interest of justice that there be an appeal to the Supreme Court. It is critical therefore that the applicant seeks to identify with precision the matter involved and the reason why it is either of general public importance, or why it is in the interests of justice that there should be an appeal. This does not involve the repetition of grounds of appeal nor the bald statement that the matter is of general public importance. Furthermore it is essential that the matter alleged to arise be one that is a valid ground of appeal in the sense that it properly arises from the case, and could if decided in the applicant’s favour result in a partial or complete reversal of the decision of the Court of Appeal or High Court as the case may be. During an initial transitional period the court was prepared to adopt a more lenient approach to the analysis of both the grounds of an application for leave and the respondents response in the expectation that experience would lead to more focused applications and responses which were clearly directed to the question of whether the constitutional test had been satisfied. It is however inherently unsatisfactory that the court should formulate or reformulate the grounds of appeal. The point must be soon reached when the Court will evaluate the application purely on the terms proposed by the applicant.
12 Before addressing the detail of the application here it is important to emphasise that any ruling in a determination is between the parties. It is final and conclusive as far as the parties are concerned, and is a decision in relation to that application only. The issue determined on the application for leave is whether the facts and legal issues meet the constitutional criteria to enable this Court to hear an appeal. It will not, save in the rarest of circumstances, be appropriate to rely on a refusal of leave as having a precedential value in relation to the substantive issues in the context of a different case. Where leave is granted, any issue canvassed in the application will in due course be disposed of in the substantive decision of the Court.
13 Here there are unsatisfactory elements to the application. Contributory negligence was not pleaded. The suggestion that mitigation was assessed on a subjective basis certainly required further elaboration. Nor does it seem sufficient to suggest without explanation that the Court of Appeal failed to differentiate between findings of fact and inferences of fact as enjoined by the Supreme Court in Hay v O’Grady. However it is also true to say that the award here is very substantial and the case raises important issues on the assessment of damages, the question of causation and mitigation, and the appropriate test for appellate review particularly of inferences from facts themselves dependent upon oral evidence. Furthermore the Court has recently granted leave to appeal in relation to the application of the principles of Hay v O’Grady in Donegal Investment Group v Danbywiske and ors[2016] IESCDET 124.
14 Accordingly, notwithstanding its reservations about the manner in which the application is framed the court will grant leave to appeal to the Supreme Court on the following grounds:
(i) Whether the Court of Appeal in reviewing the decision of the High Court, and in particular in considering that the test for test reviewing inferences drawn by a trial court, from oral evidence or otherwise, is to consider whether there was evidence from which those inferences could be drawn, (paragraphs 41 and 52,53 judgment CA) applied a standard of appellate review which was too low;
(ii) Whether the concept of a completed transaction as discussed in Kelleher v O’Connor [2010]IEHC 313 is applicable in a case such as this, and if so whether it was properly applied;
(iii) Whether the High Court was correct in the manner it assessed the damages where the negligence involved a failure to do something within a reasonable time, but which remained capable of being done, and was done;
(iv) Whether the application of an objective standard to the question of causation and/or mitigation of damages required anything more than the conclusions of the High Court in this case.
And it is hereby so ordered accordingly.
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