Supreme Court allows appeal to dismiss plaintiff's claim for non-existent concluded contract due to vague terms.

THE SUPREME COURT

Keane C.J.

Geoghegan J.

Fennelly J.

316/00

BETWEEN

LIAM LAWLOR

PLAINTIFF/RESPONDENT

AND

SEAMUS ROSS MENOLLY HOMES LIMITED AND MENOLLY PROPERTIES LIMITED

DEFENDANTS/APPELLANT

JUDGMENT delivered the 22nd day of November, 2001 by Keane C.J.

The facts in this case are comprehensively stated in the judgment which will be delivered by Fennelly J and need not be set out

by me.

The applicable legal principles are not in doubt. This is not a case, as Mr. Frank Clarke SC conceded on behalf of the appellants,

in which it could be successfully contended that the statement of claim itself disclosed no reasonable cause of action or one

that was frivolous or vexatious. The appellants say, however, that the proceedings should have been struck out in the exercise

of the inherent jurisdiction of the High Court to take that course where it is clear that the plaintiff’s claim must fail.

That such a jurisdiction exists is beyond doubt. However, as was made clear by Costello J, as he then was, in Barry -v- Buckley

[1981] IR 306 and by this court in Sun Fat Chan -v- Osseous Limited [1992] 1 IR 425, it is a jurisdiction which should be

sparingly exercised by the High Court. As McCarthy J observed in the latter case :

“Experience has shown that the trial of an action will identify a variety of circumstances perhaps not entirely

contemplated at earlier stages of the proceedings ; often times it may appear that the facts are clear and established

but the trial itself will disclose a different picture.”

Since the defendant who brings such a motion must satisfy the court that, even assuming that all the facts pleaded and relied

upon by the plaintiff in his statement of claim are established in evidence, his or her action will nonetheless inevitably fail, the

burden resting on the defendant in bringing such a motion is undoubtedly a heavy one.

It remains to consider the application of those principles to the facts of the present case. As I understand the statement of

claim and particulars, the plaintiff claims that he entered into what he describes as “a joint venture partnership agreement” with

the defendants and a Mr. Peter Dwyer under which a company was to be formed for the purpose of acquiring and developing

certain lands known as “ The Guinness lands” in West County Dublin. If the lands in question could be acquired for £8 million,

the project was to go ahead and the shareholding in the company and the distribution of profits which, it was hoped, would

result from the venture were to be divided in the proportions of 40% to the defendants, 40% to Mr. Dwyer and the remaining

20% to the plaintiff. If it transpired that the purchase price of the lands was in excess of £8 million, the parties would not be

bound to proceed with the acquisition and development of the lands. If, however, the parties were willing to proceed with the

acquisition of the lands, even though the purchase price was in excess of £8 million, the company would then be formed with

the shares held in the agreed proportions. The plaintiff’s case is that the lands were subsequently acquired for a sum admittedly

significantly in excess of £8 million, i.e., £19 million, but that, in breach of the agreement he had arrived at with the defendants

and Mr. Dwyer, he was given no opportunity of participating in their further development through the medium of the proposed

new company.

It is undoubtedly the case that, as pleaded in the statement of claim, certain aspects of the alleged agreement remain

remarkably vague. There was no agreement as to the details of the development to be carried out on the lands and the entire

question of how the project was to be financed seems to have been left in the air. It may be that at the trial of the action, if it

is allowed to proceed, the plaintiff will be able to establish that there was an agreement between himself, the defendants and

Mr. Dwyer that the company in question was to be formed, that the lands when acquired were to be vested in the company

and that the profits of any development were to be divided in the agreed proportions. It is conceded on behalf of the plaintiff,

however, that there was no agreement as to how the project was to be financed and that the details of the proposed

development were also, in effect, left for further agreement. Accordingly, even making every assumption in favour of the

plaintiff as to the stage which negotiations had reached, they remained negotiations. None of the parties would be in a position

to hold the other parties to whatever arrangements in principle were envisaged, if it was not possible to reach agreement on

matters such as finance and the nature of the proposed development. In these circumstances, it seems to me that this

constitutes one of those cases in which, making every assumption in favour of the plaintiff, the contract relied on could not

possibly constitute a concluded contract between the parties which would give rise to any action at law.

I would allow the appeal and substitute for the order of the High Court an order dismissing the plaintiff’s claim.