Supreme Court dismisses appeal on oral contract claim where trial judge's fact-finding on witness credibility is binding.

THE SUPREME COURT

[S.C. No: 1 of 2003]

Denham J.

Fennelly J.

Macken J.

Between/

Barry Guilfoyle

Plaintiff/Appellant

and

Farm Development Co-operative Limited

Defendant/Respondent

Judgment delivered the 23rd day of March, 2006 by Denham J.

1. This is an appeal by Barry Guilfoyle, the plaintiff/appellant, hereinafter referred to as ‘the plaintiff’, from the judgment and order of

the High Court delivered on the 5th November, 2002, wherein the High Court refused the plaintiff the relief he sought in the pleadings.

2. In the pleadings the plaintiff claimed that on or about the 12th day of April, 1999, Jack Murphy, the managing director of the Farm

Development Co-operative Limited, the defendant/respondent, hereinafter referred to as ‘the defendant’, acting on behalf of the

defendant, agreed to purchase the plaintiff’s shareholding of 150 “B” ordinary shares in FDC Financial Services Limited for the

consideration of £120,000.

3. The plaintiff, having worked with the defendant, was departing from the company and planning to go into business elsewhere. At

issue is an oral agreement he alleges was created, and pursuant to which he alleges that he is entitled to £119,555. The plaintiff’s

case is that the oral agreement was made on the 12th April 1999. In fact, as the learned trial judge pointed out, the matter reduced

itself to consideration of a period of about eight or ten days and what occurred in those eight or ten days.

4. The matter came on for hearing in the High Court (Smyth J.) on the 5th day of November, 2002. At the hearing the issue was the

alleged oral contract entered into on the 12th day of April, 1999. Contrary evidence was given by the plaintiff and Mr. Jack Murphy.

Thus, the plaintiff stated, inter alia:

“The arrangements I made with Jack Murphy that morning were as follows: I advised him of my resignation. We then discussed

matters that needed to be dealt with on my termination, which was the value of the equity. At that meeting I put it to him that

my termination would be easy to calculate, in that we had just dispensed with James Barlow who had 75 shares. He had got

approximately £60,000. I had 150 shares, therefore my payout would be double James Barlow. He agreed to that, he said, yeah,

that is agreeable and that is the fashion that I was to be treated in.”

[transcript Q.51]

Mr. Jack Murphy, on the otherhand, did not have the same recollection. He stated, inter alia:

“My recollection is that Barry Guilfoyle visited me and advised me of his intention to resign. That was the first I had heard of it

and I was surprised by it, disappointed by it. We discussed various issues surrounding it. I asked him what his plans were and

what he was intending to do and he advised me. I wished him well in relation to his future business. I discussed with him in

general terms the future of Financial Services resulting from his departure, issues to do with management, etc. The meeting

ended perhaps after, my recollection would be an hour, three-quarters of an hour maybe.”

[transcript Q. 169]

and,

“The luncheon meeting took place in the Metropol Hotel, which we frequented periodically, and the substance of the discussion,

my recollection of it is that again it varied over issues to do with the business, issues to do with his future career. I was not

made privy to any matters that I can recall to do with his purchase of offices, etc. The matter of shareholding was raised and I

said to him that we would deal honourably and fairly with his share encashment, as we always have done with all parties with

FDC.”

[transcript Q. 173]

5. In refusing the relief sought, Smyth J. pointed out that the case “boils down to the differences of recollection between two

people”. Having assessed the evidence the learned trial judge held:

“In my judgment, I have come to the view that although Mr. Guilfoyle genuinely believed he was going to get the same

treatment as Mr. Barlow, I am equally satisfied that Mr. Murphy did not agree to give Mr. Guilfoyle £119,555 or £120,000 in

respect of his shares in the company. The whole valuation process, if it had no meaning, could have been stopped in its tracks

without the necessity to going through the correspondence, which Mr. Macken on behalf of Mr. Guilfoyle made very

conveniently available to before lunch. That went on for months. If it had no real feature in this matter, it was a complete red

herring.

Mr. Guilfoyle, on his version of the contract he made, the oral contract, was at £120,000 or £119,555 or nothing. He agreed in

the box that if the valuation came up a shade off, that he might have accepted, but there was no question of a band or range

of parameters by which the parties had agreed at all. It was either his figure or the valuation, it could not be both. He thought

he pitched the valuation correctly. The valuation has not been gone into, I am not concerned about that, I am concerned with

the matter of legal principle of contract: Was the figure agreed upon by the parties in respect of what was stated to be the

case?

It is a matter of some regret that the parties who have soldiered so long and so well commercially should have found

themselves here and that it should fall to my lot to say that the plaintiff has not made out the case that he has put forward to

the court and, regretfully, the case must rest on the basis of the valuation that has been arrived at, notwithstanding the fact

that in the transfer document referred to by Mr. Macken and handed into court, which is not in dispute, there is clearly a

reference again to the figure of £120,000. That has not been accepted by Mr. Murphy or by the company at any stage and the

fact of placing the documents in letter form or in transfer form with the figure does not necessarily get over the fact that the

evidence does not establish to my satisfaction that it is the true position.

Accordingly, there are forms of relief sought in the proceedings. The declaration that the consideration of £72,000 is void, that

is refused. There is a refusal to grant specific performance of the agreement that is alleged by the plaintiff at £120,000, and

the other reliefs fall as defeated, also.”

6. The plaintiff has appealed against the determination of the High Court. The notice of appeal filed on his behalf set out the following

grounds of appeal:-

(i) The learned trial judge erred in law and in fact in holding that no agreement was concluded as between the plaintiff and the

defendant on the 12th April 1999 whereby the defendant agreed to purchase the plaintiff’s shares in FDC Financial Services

Limited (hereinafter “the Company”) for a price of IR£119,550.00

(ii) The learned trial judge failed to have regard to the evidence and the weight of the evidence that an agreement had been

made on the 12th April 1999 in relation to the value of the plaintiff’s shareholding in the Company.

(iii) The learned trial judge erred in law and in fact in holding that the plaintiff’s letter of resignation of the 21st April 1999 [and

subsequent correspondence from solicitors for the plaintiff] contained no reference to the said agreement of the 12th April

1999, and further erred in failing to give sufficient weight to the failure of the defendant to deny such agreement in

correspondence.

(iv) The learned trial judge erred in law and in fact in failing to take into account the fact that the Company and the shares

therein had been valued in accordance with a procedure overseen and approved by Mr. Jack Murphy, the General Manager of

the defendant, for the purposes of instituting an employee share option scheme.

(v) The learned trial judge erred in law and in fact in failing to give adequate weight to the valuation by the Company, which

valuation was approved of by Mr. Jack Murphy on behalf of the defendant, of the shares of Mr. James Barlow, upon the

termination of James Barlow’s employment with the Company.

7. The parties filed written submissions also and oral submissions were presented to the Court. The essence of the plaintiff’s

submission was that the learned trial judge had erred because of: a) the recent valuation of the shareholdings in the company; and,

b) the application of that valuation to Mr. Barlow’s situation; and that the learned trial judge had erred in giving insufficient weight to

these two factors in assessing the claim of the oral agreement.

8. The core of this appeal relates to findings of fact and credibility by the High Court. The plaintiff brought a claim alleging an oral

contract, the primary evidence of which was the oral evidence of the plaintiff and Mr. Murphy, which evidence was contradictory.

The learned trial judge was entitled to assess the credibility of the two witnesses, indeed it was his duty. The learned trial judge was

entitled to accept the evidence, of Mr. Murphy over that of the plaintiff. I am satisfied that the learned trail judge did not misdirect

himself in law or fact as to the scheme of shareholdings and their valuation because at issue was an oral contract, which he

determined, although he did in fact also refer to the Articles of Association, and to the scheme which had existed in relation to the

valuation of Mr. Barlow’s shareholding. He was entitled on the evidence to come to the conclusion which he did.

In all the circumstances I am satisfied that the learned trail judge was entitled, indeed compelled, to find for the defendant. This is

the type of case where an appellate court treads very carefully, because at issue are questions of fact and credibility. These are

quintessentially matters for the trial court. In this case the findings of the learned trial judge as to which witness he believed were

findings of primary fact. In Hay v. O’Grady [1992] 1 I.R. 210 this Court pointed out that an appellate court does not enjoy the

opportunity of seeing and hearing witnesses, or observing the manner in which the evidence is given or the demeanour of those giving

it. If the findings of fact made by the trial judge are supported by credible evidence, this Court is bound by them, however voluminous

and weighty the testimony against them. In this appeal, the findings of fact made by the learned trial judge were supported by

credible evidence and I am satisfied that this Court is bound by them.

9. Conclusion

For the reasons given I would affirm the order and judgment of the High Court and dismiss the appeal.