High Court dismisses plaintiff's application to amend claim and join widow as co-defendant in property dispute.

[2019] IEHC 86

THE HIGH COURT

[2013 No. 12782 P.]

BETWEEN

SEAN HANLEY

PLAINTIFF

AND

MARY HANNON ADMINISTRATOR OF THE ESTATE OF THE LATE MARTIN HANNON AND GERARD NEILAN AND WILLIAM BRANDON

PRACTISING UNDER THE TITLE AND STYLE OF PATRICK J. NEILAN AND SONS, SOLICITORS (INCORPORATING MARTIN J.

NEILAN)

DEFENDANTS

JUDGMENT of Mr. Justice Noonan delivered on the 13th day of February, 2019

1. The within application is brought by the plaintiff (“Mr. Hanley”) for two reliefs. First he seeks to amend his statement of claim and

second to join the first defendant (“Mrs. Hannon”) as a co-defendant to the proceedings in her personal capacity as distinct from her

representative capacity.

Background Facts

2. The plaintiff commenced these proceedings as a litigant in person by the issue of a plenary summons on the 6th November, 2013

followed by a statement of claim in February 2014. In the statement of claim, the plaintiff pleads that Mrs. Hannon is the widow of

the late Martin Hannon (“Mr. Hannon”). This is not in dispute. However, the plaintiff also alleges that Mrs. Hannon is the administrator

of the estate of her late husband. This is denied on oath by Mrs. Hannon in this application and her evidence in that regard has not

been contradicted by Mr. Hanley, despite a subsequent affidavit having been sworn by him.

3. The statement of claim goes on to allege that on the 28th February, 2005, Mr. Hanley purchased two sites known as sites 9 and

10 Ardsallagh Beg, Roscommon from Mr. and Mrs. Hannon who instructed the second and third named defendants as their solicitors in

the transaction. Again in her sworn evidence, Mrs. Hannon says that only one site was in fact purchased by Mr. Hanley, the other

having been purchased by his son. Again this is not controverted by Mr. Hanley.

4. The statement of claim further pleads that the conveyance between the parties included a covenant whereby Mr. Hanley was to

construct a dwelling house within eighteen months of the date of the conveyance. He further pleads that the replies to requisitions

on title indicated that Mr. and Mrs. Hannon were applying for planning permission for the sites in question but this did not issue until

the 16th January, 2006, leaving Mr. Hanley with only seven months to comply with the covenant to build the house.

5. He further alleges in his statement of claim that the Hannons failed to comply with conditions 11 and 12 of the planning permission

and, although he does not specify what those conditions provided, he claims that as a result of such non-compliance he lost the

opportunity to build. In consequence he claims to have suffered loss and damage. He also alleged that the solicitors had failed to

comply with an unspecified undertaking on the closing of the sale but the proceedings have been discontinued against the solicitors

so that Mrs. Hannon is the only remaining defendant. The only case pleaded against them appears to be an allegation that they failed

to comply with an unspecified undertaking given on the closing of the sale.

6. Accordingly, Mr. Hanley claims damages for negligence and breach of contract as a result of the failure to comply with the planning

conditions.

7. Mrs. Hannon’s solicitors served a notice for particulars on the 20th March, 2014 which appears not to have been replied to and

delivered a defence on the 12th October, 2014. In her defence, she raises by way of preliminary objection the Statute of Limitations

and also pleads that the plaintiff has been guilty of inordinate delay in bringing the proceedings. She expressly denies that she is the

administrator of her late husband’s estate and much of the defence is a general traverse of the statement of claim. However, in

relation to the allegation that the Hannons had failed to obtain planning permission, or to obtain it in time, she expressly relies on

special condition 11 of the contract which provided as follows:

“The site the subject matter of the sale is not being sold with the benefit of any planning permission and the sale is not

subject to the purchaser applying for or obtaining planning permission in respect of the site the subject matter of the

sale.”

8. It is important to note that Mr. Martin Hannon died on the 3rd February, 2011, some six years after the contract was concluded

and over two and a half years prior to the institution of the proceedings.

9. Subsequent to the delivery of the defence, Mr. Hanley served an amended statement of claim in November, 2014 in which he

added two new allegations, evidently in response to the defences that had been delivered. First he pleaded that one of the sites was

transferred to his son contrary to his express instructions, presumably by the second and third defendant. Second, he says that

because clause 11 provided that the sale was not subject to planning permission being obtained by the plaintiff, this infers that it was

sold with the benefit of planning permission.

10. Discovery was made by the 3rd defendant in an affidavit sworn on the 22nd April, 2015. Matters thereafter appeared to have

proceeded as outlined in an affidavit sworn by Mr. Hanley in this motion on the 4th October, 2018. In relation to the issue of

representation, a number of uncontradicted facts emerge from the affidavits sworn on behalf of Mrs. Hannon opposing this motion.

The first is that Mr. Hanley was at all times represented by solicitors in relation to the sale. The second is that in instituting and

pursuing these proceedings, he has been assisted by a Mr. David O’Shea, a former solicitor who holds two law degrees and practiced

as a solicitor for 15 years between 1993 and 2008. Thirdly, in or around 2012 shortly before the institution of these proceedings, Mr.

Hanley instructed Messrs. Brendan J Looney, solicitors, to engage in correspondence with the potential defendants in relation to the

matter, although that firm never came on record.

11. In his own affidavit, Mr. Hanley avers that in or around October, 2016, Mr. Hanley sought expert assistance in relation to his claim

and consulted Mr. Ignatius Gaynor, an architect, who presumably has expertise in relation to planning matters. It would appear that

before Mr. Gaynor had carried out any significant investigative work concerning the planning issues in the case, Mr. Hanley set the

matter down for trial and applied for a hearing date on the 18th November, 2016. A hearing date of the 18th July, 2017 was given for

the trial.

12. As a result, possibly of Mr. Gaynor’s investigations, the plaintiff, with less than a month to go to the trial, for the first time

consulted Mr. Paul Kelly solicitor on the 23rd June, 2017. That appears to have been followed by a consultation with Mr. Kelly, Mr.

Gaynor, Mr. Hanley and counsel on the 29th June, 2017.

13. This latter meeting proved to be the catalyst for the application that is now before the court. Mr. Hanley says that he learned at

this consultation for the first time that he had been the victim of a fraud in relation to the planning and other issues in the case. This

fraud, he says, was revealed as a result of his architect investigating earlier planning permissions obtained by the Hannons in respect

of the site and adjoining sites the subject matter of the proceedings. He avers that because only an expert such as Mr. Gaynor would

have realised the implications of all of this, he had been the victim of fraudulent concealment and fraudulent misrepresentation by Mr.

and Mrs. Hannon, which as a lay person he could not previously have appreciated.

14. This is strongly disputed in an affidavit sworn by Mrs. Hannon’s solicitor, Peter H Jones. In summary, Mr. Jones says that this

proposition is somewhat difficult to credit given the fact that the relevant planning files are there for anybody to consult and any

member of the public without specialist knowledge would readily discern the matters complained of, for example that the development

levy had not been paid. Certainly these matters would have been obvious to a person with legal expertise such as Mr. O’Shea or

indeed Mr. Looney. One assumes that Mr. Hanley himself, as a developer, would at least have some passing knowledge of planning

matters. Although from the outset, the plaintiff’s pleaded complaints relate to planning issues, it seems extraordinary to say the least

that nobody apparently troubled to look at the planning file until late 2016.

15. The initial affidavit grounding this application was sworn, not by the plaintiff, but by his solicitor. In that first affidavit, Mr. Kelly

says that because Mr. Hanley is a lay person, he failed to appreciate that Mrs. Hannon had a personal liability for the breach of

contract of which he complains. Furthermore, Mr. Kelly avers that the full extent of the falsity of what was represented by the late

Mr. Hannon (and not Mrs. Hannon) to Mr. Hanley only became evident after the consultation with the architect and counsel. At that

consultation, he says that counsel advised that the contract was liable to be rescinded.

16. Arising out of these matters, the trial date had to be vacated and the plaintiff issued the within motion on the 1st August, 2017,

some twelve and a half years after the conclusion of the contract the subject matter of these proceedings.

17. The proposed amended statement of claim herein is a document that is very significantly different in many respects from the

original statement of claim. The most fundamental new plea it seeks to introduce is that prior to the conclusion of the conveyance in

issue (and notably not the contract) false and fraudulent representations were made by Mr. Hannon that first, he and Mrs. Hannon

would be responsible for obtaining the relevant planning permission and the provision of services such as sewage to the site, second

that by virtue of this representation Mr. Hanley would be able to comply with the covenant to build within eighteen months and third

that the payment of the purchase money of €110,000 would enable the Hannons to comply with these representations. It is important

to record that the alleged representation made by Mr. Hannon to obtain the planning permission is directly contrary to what the

contract actually provided in clause 11 recited above.

18. The amendments go on to plead that the representations were false and fraudulent by virtue of the fact that Mr. Hannon was in

breach of earlier planning permissions for an adjoining site by failing to provide the necessary sewage services and to pay the relevant

development levy to the planning authority. This meant that building would not be permitted on the site being acquired by Mr. Hanley

until such time as Mr. Hannon complied with the earlier planning permission and that the €110,000 would not in fact be sufficient for

this purpose.

19. The plaintiff pleads further the failure to disclose all these matters to him was fraudulent. He also complains of the fact that the

Hannons allowed the planning permission to lapse and failed to apply for an extension of the permission and that there was a

conspiracy between Mr. and Mrs. Hannon to damage the plaintiff’s economic interests by virtue of the foregoing matters. It seems

highly probable that all of these pleas arise from the instruction of the architect Mr. Gaynor, and properly qualified lawyers, for the

first time by Mr. Hanley when the trial was imminent.

20. It is thus clear that the amendments sought by the plaintiff introduce significant new facts, plead a number of new causes of

action and seek new relief in the form of rescission. It is important to note that Mrs. Hannon’s uncontroverted evidence is that she

knew nothing of her late husband’s business dealings and is entirely ignorant of the matters now sought to be introduced.

Legal Principles

21. Dealing first with the amendment application, the relevant rule of the Rules of the Superior Courts is O.28 r.1 which provides:

“1. The Court may, at any stage of the proceedings, allow either party to alter or amend his indorsement or pleadings in

such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the

purpose of determining the real questions in controversy between the parties.”

As I noted recently in Knowles v. ESB [2018] IEHC 761 at para. 20:

“As has often been pointed out, the starting point must be that amendments will in general be allowed in the absence of

irremediable prejudice so that the court can do justice between the parties in respect of the real questions in

controversy. The fact that the application is made late in the day is of course a factor to be considered but by no means

conclusive and it is no function of the court to punish a party for a failure to plead its case in a timely manner.”

22. The issue of prejudice arising from the proposed amendments is a central consideration for the court. One such prejudice is of

course the fact that evidence now required for the purposes of dealing with the claim as amended may no longer be available.

23. As noted above, one of the primary new allegations now made in the case is that express, presumably verbal, representations

were made by Mr. Hannon which were allegedly false and fraudulent and have led to loss being suffered by Mr. Hanley. There is no

suggestion that Mrs. Hannon was party to any of these representations and as I have noted, her evidence is that she knew nothing

of them. Those representations it would seem were likely made in early 2005 or perhaps late 2004 but in any event, the only person

who could deal with the allegations now raised is obviously Mr. Hannon, who died in 2011.

24. There is thus an obvious and immediate irremediable prejudice to the defendant were the plaintiff to be allowed to introduce these

amendments now. It seems to me that the case as originally pleaded by Mr. Hanley turned in large measure on the contents of the

relevant documents themselves which included the contract, the conveyance and the planning permissions. To that extent, although

it is very much in issue, it may have been possible for Mrs. Hannon to meet the pleaded case even in the absence of her late

husband. The case now sought to be made is however radically and fundamentally different. It is not clear to me how Mrs. Hannon

could be expected to defend such a claim in the absence of her husband’s evidence being available.

25. Given also that these claims are sought to be introduced more than twelve years after both the contract and conveyance, the

issue clearly also arises as to whether Mrs. Hannon would be deprived of a defence she would otherwise have had under the Statute

of Limitations if these amendments were permitted.

26. This again was something I commented upon in Knowles (at para. 26):

“Where the amendment does not arise out of new facts, even if it does amount to a new cause of action, it may still be

allowed – see Krops v. Irish Forestry Board [1995] 2 I.R. 113 and Croke v. Waterford Crystal [2005] 2 I.R. 383. Both of

those cases were considered by the Supreme Court in Smyth v. Tunney [2009] 3 I.R. 322. The court’s judgment was

delivered by Finnegan J., who said (at p. 334):

‘In summary, the law as to amendment now is that an amendment will be allowed if it is necessary for the purposes of

determining the real issues in controversy between the parties. The addition of a new cause of action by amendment will

be permitted notwithstanding that by the date of amendment the Statute of Limitations had run if the facts pleaded are

sufficient to support the new cause of action. Facts may be added by amendment if they serve only to clarify the original

claim but not if they are new facts. Simple errors such as an error in date or an error as to location which do not

prejudice the defendant and enable the real questions in controversy between the parties to be determined will be

permitted.’ (My emphasis).”

27. As I have already explained, the amendments sought here go far beyond merely pleading a new cause of action based on the

same facts but in effect, make an entirely new case which, in the light of the events to which I have referred, the defendant could

not now reasonably be expected to answer at this remove in time.

28. Although as I have said, delay in making an application to amend is not of itself fatal, it is nonetheless an important factor, and

one which calls for explanation, again as explained in Knowles (at para. 28):

“The recent jurisprudence further establishes that there is an onus on a party seeking amendment, especially as here very

late in the day, to explain why the matter was not pleaded in the first place and why the delay occurred. As Finnegan J.,

speaking for the Supreme Court, observed in Allen v. Irish Holemasters Ltd [2007] IESC 33:

‘There is an obligation on the party seeking to amend pleadings to give good reason for having to do so. […] If delay

is not justifiable or excusable then that is a factor to be taken into consideration as part of the matters to be

weighed in deciding whether or not the court will allow amendment.’ ”

29. Mr. Hanley through his counsel submitted that insofar as fraud is now pleaded, he is entitled to rely on s. 71 of the Statute of

Limitations, 1957 which provides:

“71-(1) where, in the case of an action for which a period of limitation is fixed by this Act, either-

(a) The action is based on the fraud of the defendant or his agent or of any person through whom he claims or his

agent, or

(b) the right of action is concealed by the fraud of any such person, the period of limitation shall not begin to run

until the plaintiff has discovered the fraud or could with reasonable diligence have discovered it.”

Conclusions

30. In the present case, in truth the only reason advanced by the plaintiff for this late application to amend is that he is a litigant in

person who did not appreciate the significance of certain matters at the time he instituted his proceedings. It is not however

suggested that there are matters only now coming to light of which he did not know, or could not reasonably have known. He must of

course have always been aware of the alleged representations made to him by Mr. Hannon, even if their significance, as now

suggested, escaped him at the time.

31. Similarly, the fact that he was unaware of the relevant planning issues that have now come to the fore by virtue of Mr. Gaynor’s

investigation cannot in my view be relied upon as an excusing circumstance. It was always open from the outset to Mr. Hanley to

engage an expert and the fact of the matter is that he only chose to do so when the case was going to trial. To that extent

therefore, the alleged fraud of which he now complains could with reasonable diligence have been discovered long ago, even if one

accepts that it required the input of an expert to reveal it, a proposition which in my view is highly dubious.

32. Litigants in person are of course entitled to precisely the same rights as represented parties to litigation. If they choose to pursue

legal proceedings without the benefit of legal or other advice from properly qualified professionals, they cannot be heard to say that

they are entitled to be treated differently to represented parties by virtue of a conscious choice on their part to eschew the

assistance of such professionals. Accordingly, no good reason has been advanced on behalf of Mr. Hanley for the failure to plead his

case, a case commenced in any event very late in the day, in a proper manner.

33. For those reasons therefore, in my view, the application to amend must fail.

34. Turning now to the application to join Mrs. Hannon in her personal capacity as a defendant, it seems to me that precisely the

same considerations apply to this application as applied to the application to amend. The failure to join Mrs. Hannon originally in the

proceedings is again said to stem from the fact that Mr. Hanley did not know any better. He has certainly known for a considerable

period of time however, at the latest October 2014 when Mrs. Hannon delivered her defence, that she was contesting the fact that

she was the administrator of her late husband’s estate. That is also her clear evidence on oath and Mr. Hanley has chosen not to

engage with it despite filing a subsequent affidavit which tends to suggest that he is not in a position to produce any evidence to

support what he originally alleged.

35. In my view, Mrs. Hannon was perfectly entitled to defend the proceedings up to the present time on the basis that they were

entirely misconceived against her in circumstances where she is not in fact the administrator of her husband’s estate and that she

would not be required to engage further with any of the merits on this account. It is now proposed to join her in circumstances where

she will have to endeavour to call to mind, even if she were in a position to do so, events going back now some fourteen years in a

case which, were it to be instituted today against her, would be manifestly statute barred. I cannot see other than that she would be

significantly prejudiced by being joined as a defendant to the proceedings at this stage and it would in my view be unjust to do so.

36. For these reasons therefore, I propose to refuse the plaintiff’s application herein.