Tort Liability
Cases
Metro-Schmidlin UK PLC v Michael McNamara & Co
[2011] IEHC 490
Judgment of Mr Justice Charleton delivered on the 13th day of December 2011
This is an application for a direction at the close of the plaintiff’s case. It arises out of a large building project called ‘McDonagh Junction’ in Kilkenny where the second named defendant Cedartree Construction Ltd was the employer, the first named defendant Michael McNamara and Company was the main contractor, the third named defendant Bruce Shaw Project Management Limited was the project manager and the plaintiff was the subcontractor for a glass roof. The other defendants were employees of the first three named defendants. I will refer to that later.
The plaintiff alleges that the defendants conspired to keep it out of money due to it, approximately the unpaid half of the subcontract price in order to smooth future business relations or, in the alternative, to keep moneys due to the plaintiff for themselves.
Where the defendants on this kind of application indicate that they will go into evidence should the application be unsuccessful, the court should only grant a direction where there is no prima facie proof; where the defendants indicate that they will not give evidence, the task of the court is to analyse such evidence as has been given by the plaintiff in order to determine if proof amounting to a probability has been established. The court has a discretion to hear the defence case, should it be announced that there is to be one, before deciding on such an application. All of the defendants have stated that they will go into evidence should this application not be granted, so I bear this discretion in mind.
The entirety of the case made by the plaintiff has been based upon circumstantial evidence. I do not intend to repeat the analysis that I have made elsewhere as to the proper approach by a court trying a civil case based on such evidence. It suffices to say that a theory that a wrong has been committed against the plaintive is not enough; rather, the facts and circumstances upon which the case of conspiracy is made out must establish it as a probability; which probability will be destroyed in the event that on the same facts and circumstances some other equally probable explanation is available. This principle derives from the criminal law principle that a jury should not convict on circumstantial evidence unless that evidence establishes by undesigned coincidence and beyond a reasonable doubt that the accused is guilty and that no other reasonable hypothesis will fit the same circumstances. Where proof by probability is in issue, there may seem to be a logical trap in first deciding that the facts and circumstances prove a probability but then analysing the same material to see if anything else may be probable thereupon. That, however, is not so. The proper approach is to analyse the material in order to establish if a probability is established and then to return and re-analyse the material in order to attempt to find, as a safeguard, any other conclusion which might amount to a competing probability, thereby displacing any tentative finding of fact; see Elliott Construction Ltd v Irish Asphalt Ltd (High Court, unreported, 25 May 2011). Here I am concerned with whether there is prima facie proof only, that is to say a sufficiency of evidence which if not contradicted would allow a tribunal of fact to fairly conclude that there was a conspiracy. In that regard, I intend to concentrate on whether there is sufficient prima facie evidence of that tort.
A civil conspiracy occurs where two or more parties agree to further their interests to the detriment of another party by using unlawful means. That unlawful means can be the object of the conspiracy or it can be the mechanism whereby something apparently lawful is accomplished. In each case the essence of conspiracy as a tort is the coming together in a combination to agree on an illegality. It can also be the tort of conspiracy that a combination wilfully to do an act causing damage to a man in his trade or other interests is unlawful and if damage in fact is caused is actionable, unless the real and dominant purpose is to advance the lawful interests of the parties to that agreement in a manner in which they honestly believe that those interests would directly suffer if the action were not taken; see Heuston – Salmond on Torts (17th edition, 1977, para 138). It is the first kind of conspiracy which is relevant here. An agreement by an individual with his company can be a conspiracy as can an agreement between companies through individuals and an agreement between individuals and companies; Taylor v Smyth [1991] 1 IR 142.
There has been debate as to the nature of the claim taken by the plaintiff against the defendants. The plenary summons alleges various torts. I am satisfied that the claim before this Court is in conspiracy only. I accept the argument advanced on behalf of the defendants on this aspect of the application. In the letter of claim before the issue of proceedings, dated 12 October 2010, the solicitors for the plaintiff make explicit an allegation that an agreement by way of conspiracy was reached on about 1 July 2008 whereby it was agreed between the defendants, or on their behalf, that a full and final settlement of building debts between the parties to that agreement would be reached to include monies due to the plaintiff but, according to the letter, the monies due to the plaintiff would not be pursued. In evidence, Mr David Barrow on behalf of the plaintiff put forward his interpretation of the conspiracy, which was that on that date the parties agreed to the payment of the money that was due to the plaintiff but were determined that the plaintiff would never receive it because they would keep it for themselves, or one or other of them. His evidence was focused on conspiracy and that was what he was cross examined about. There were references to interference with contractual relations and breaches of duty. In the pleadings, the claim of conspiracy is squarely made as part of other pleas made of interference with contractual relations and of breach of duty. The alleged agreement is central to the allegation of interference with contractual relations made against the defendants; that is how the matter is pleaded, and properly so. Any such interference, if it occurred, happened not as an individual wrong but instead it is pleaded as part of the conspiracy of the defendants, as the means whereby the alleged conspiracy to use unlawful means, through interference with contractual relations and breach of duty, was furthered. No criticism of the pleadings is advanced in that regard. It is clear from the initial letter that the wrong suffered by the client is reflected in the allegation of conspiracy as opposed to any other claim. The wrongs alleged in addition are the means whereby the agreed unlawful actions in furtherance of the conspiracy have been claimed to be taken.
In addition, it has been argued on behalf of the plaintiff that beyond conspiracy there is a claim of negligence based on breach of duty. The extensive contract documents establish that there is no privity between the plaintiff and any other party than the first defendant; the relationship is that of subcontractor to main contractor. Clause 11 (F) of the subcontract between the plaintiff and the second named defendant allow the plaintiff to stand in the shoes of the first defendant as main contractor and to bring an action against the second defendant, as employer on the building works, in the same manner as if the contract were made with it. This provision is enabled where the plaintiff is dissatisfied with non-certification or under-certification of work, the task of the third named defendant. The relations between the parties are thus governed in such a way that the contract provisions and entitlement to arbitrate clauses preclude a special relationship that otherwise might be argued to give rise to a duty of care; Pacific Associates v Baxter [1990] 1QB 993. In that case there was in addition to the kind of arrangement of liabilities between co-workers on a building project a specific clause limiting liability. That, however, is not necessary where the relations between the parties exclude a special relationship giving rise to liability for breach of a duty of care through those relations being worked out and defined through contract. In that case at p 1072 Ralph Gibson LJ stated:
The professional firms engaged in construction work as architects or engineers or surveyors, and the companies which carry out such work, are concerned to know whether in the relationships between contractor, employer and engineer under a contractual relationship like to that set out in this contract, but ignoring the disclaimer clause, the law imposes a duty of care on the engineer to the contractor, not to cause economic loss to the contractor in the process of certifying and of accepting or rejecting claims under the contract. Of course, each case will depend on its own facts and on the relevant provisions of the contract: see per Lord Morris of Borth-y-Gest in Sutcliffe v Thackrah [1974] AC 727, 752g. but it is likely that a large number of contracts are placed for construction or engineering works in which the contractual relationship of contractor and employer and the contractual duties of the engineer are substantially similar to those present in this case and it should be possible to determine whether in general a duty of care does or does not arise in such a case…[O]n the facts … there was “no express or implied undertaking of responsibility” (see per Lord Devlin in Hedley Byrne and Co Ltd v Heller and Partners Ltd [1964] AC 465, 530) on which the alleged liability of the engineer could be founded…
At p 1037 Russell LJ founded his concurring view on the contractual structure. He said this, with which I agree for the purpose of the contracts that I have analysed herein:
In my opinion the following question is worthy of being posed. Given the contractual structure between the contractor and the employer, can it fairly be said that it was ever within the contemplation of the contractor that, outside the contract, it could pursue a remedy against the engineer? I do not believe that any representative of the contractor would have thought so for one moment, nor do I believe that from an entirely objective point of view the answer could be anything other than in the negative. The contractor in reality had its rights adequately protected by the terms of its bilateral contract with the employer. If the contractor had thought not, then it was at liberty to insist upon a tripartite contract before embarking on the work.
There have been other sets of proceedings prior to this one, and there is a further set of proceedings waiting. In this proceeding, the plaintiff has already obtained judgment in May 2012 against the first named defendant for €1.8 million on an undefended claim. Arising out of the slow sale of building works in 2007-2008, which I describe below, the main building contractor, the first named defendant was told in late 2008 that the employer, second named defendant, had a deficit problem. The first named defendant obtained judgment for, using round figures, €1.02 million against the second named defendant in early 2009. That did not include any monies owed to the plaintiff. On March 2nd of the same year the plaintiff sued the first named defendant for debt due to them as a subcontractor to it as main contractor and the second named defendant as employer on the building project in respect of work done for them and monies owed. On March 9th of that year the plaintiff was awarded judgment against the second named defendant requiring it to certify for works done for it and a declaration that this defendant had been unjustly enriched as a result of work done by the plaintiff to the tune of about €1.8 million including VAT. The claim of the plaintiff as subcontractor against the first named defendant as main contractor for debt went to arbitration. This did not turn out in the plaintiff’s favour because the arbitrator held that though the first named defendant owed the plaintiff money, that such money was owed under a pay if paid contract; until the first named defendant was paid by the second named defendant for the work of the plaintiff, that defendant had no contractual liability to pay. This ruling was in March 2010. Then the plaintiff returned to its original proceedings; the declaration it had obtained against the second named defendant was turned into a money judgment by order of the High Court. That was appealed to the Supreme Court and overturned. The logic behind the order of the High Court is clear and attractive but is not open to me. I am confined to a claim in conspiracy. In addition, the third named defendant, as project managers of the development, pursued the ultimate owner of the development for fees due to them in their work. They obtained a judgment but that was cut down due to a creditors’ arrangement to just over half. The first named defendant is now in receivership under the National Assets Management Agency. The second named defendant is pleaded in the statement of claim to be unable to meet any claim made.
These proceedings for conspiracy and other pleaded torts were initially launched against the three corporate defendants, the first, second and third named, but were later amended to bring in the other five defendants on the basis that the activities of the corporations were directed by them and that they personally entered into the conspiracy. In so far as I might be found to be incorrect as to a claim not being made in interference in contractual relations, holding as I do that this claim is pleaded as the means whereby the conspiracy was agreed to be effected by unlawful means, I would accept as a matter of principle that unless there is an assumption of personal responsibility on behalf of a director or employee so as to create a special relationship between that person and a plaintiff, that liability for acts done on behalf of a corporation rests with that entity: Williams v Natural Life [1998] 1 WLR 830. To that extent, there is no evidence of such an assumption of responsibility. Further, it is difficult, outside the claim of conspiracy made in this case, to see how individuals who at all times acted for corporate employers and in explicit terms under relevant notice in that regard through emails and headed notepaper, could ever be made liable for that tort. It is even more difficult to see how the liability in this case can be, as I have said, governed by anything other than contract relationships. Any breach of those contract relationships was effected through corporations fairly and explicitly displayed to the parties as the acting parties. I do not at all see a situation arising such as that which occurred in Shinkwin v Quin-Con Ltd [2001] 1 IR 514. There is no evidence of that kind on which I could see a prima facie case. It is different, of course, should the parties have entered into a conspiracy with the other defendants, whether as corporations or as individuals.
It is important to concisely put this into context. The plaintiff company supplies a specialist form of subcontracting in glasswork and they are very good at that job. Things can, however, go wrong. Typical of the work they do is the job in question here. The job which the second named defendant had employed the first named defendant to build was a shopping centre and residential development in Kilkenny, to be called McDonagh Junction. The plaintiff was asked to roof in glass a large courtyard between buildings in the older part of an existing complex of a once derelict workhouse. I am going to use round figures in this judgment, as they give a better view of the overall picture. The total cost of the development was around €115 million and the subcontract sum due to the plaintiff was around €3 million plus VAT. For their work they have been paid about €1.4 million. They claim to be owed about €1.6 million and VAT, which brings it to € 1.8 million. This specialist subcontract work of the plaintiff involved putting up steel trees with branches supporting a concave structure of glass over an open area between retail buildings. In this ambiance of light and space people can trade and supply refreshments. Each of the panes of glass was large. While continual sunshine is rare in Ireland, it must nonetheless be provided for. The panes of glass were in two layers and in between there was a treatment for ultraviolet penetration, a ‘California layer’, and a dotting pattern that would keep out around half of the light. This job would be outside the normal experience of even a large building contractor and the plaintiff was therefore the specialist subcontractor of the first named defendant for this project. A firm of architects, who are not defendants, were initially employed by the second defendant, as developer, to oversee the work. Normally, a firm of architects would do the certification on a large building project; thereby enabling the contractor and its subcontractors to be paid. In this project, that task was taken over by the third named defendant. Another firm of a similar name were the quantity surveyors. In so far as it matters, I do not see any difference between these two firms. I see them as being identical in these The fifth named defendant worked for the third named defendant. The fourth named defendant was an important person in the first named defendant as was the eighth named defendant. The sixth and seventh defendants were important people in the second named defendant.
None of what follows would have happened but for an exchange of ideas between the architects and the plaintiff as to whether it was possible to have smaller dots within the panes of glass over the courtyard. At the time of this discussion, the architects had been taken over by the first named defendant as contractor’s architect. In due course what had been a 20 mm dot was changed to a very much smaller 4 mm dot. The glass was not manufactured by the plaintiff, but by two companies in England called Romag and Buckleberry. Occluding dots are put onto glass by a photographic type of process. Because of the size of the panes of glass to be used, photographic film was not large enough to fit over each pane in order to imprint the dots. There was therefore overlap on that film when two sheets were fitted together in order to treat the entire surface. On that area of overlap, the dots were microscopically different in size in comparison with the areas where a single film could be used. When the glass was put up over the courtyard, clear bands of darker shading, running horizontally or vertically, appeared in an obvious fashion. This is an aesthetic problem, but it was nonetheless a serious issue. As I have said, in round figures, the plaintiff was to be paid €3 million for this job. At the time in the dispute as to the banding issue broke out, the plaintiff had been paid just shy of half that amount. In August 2007, it became apparent that the glass was not as the second named defendant or the third named defendant expected. On 27 August of that year the resident architect rejected the glass. Following that, the plaintiff wrote to Romag requiring them to take back the glass, explicitly stating that it was defective and that they should just come and pick it up from Kilkenny. It was made plain to the plaintiff that the glass was not acceptable. Because of the interaction between the architect and the plaintiff in ordering the glass, the case is now made that the glass condition was not the responsibility of the plaintiff. I cannot accept that. Once the defect became known, the responsibility for it was that of the plaintiff and the plaintiff alone. There was correspondence lasting over a period of a year, with four different meetings between the interested parties on 17 October 2007, 9 July 2008, 22 August 2008 and 15 September 2008, in order to try and resolve the glass issue in terms of either removal or an abatement of the price due to the plaintiff. The evidence for the plaintiff has been that this correspondence, and these meetings, did not amount to genuine attempts to resolve the differences between the developer, the main contractor, the representative of the employer and the plaintiff. The plaintiff is painted as without fault in these negotiations. I need to return to that proposition.
Other factors also need to be brought into the mix. The plaintiff did not pay Romag for the glass, and that account remains outstanding in a sum of around €300,000. The plaintiff was asked for an alternative design specification but did not respond. The plaintiff was asked to pick up a glass sample in Kilkenny with the same size dot size but did not choose to do so. During the latter part of these events, the plaintiff began to be advised by outside parties and came to the conclusion, ultimately, in September 2010 that a conspiracy was in operation to deprive it of its money or to steal its money. The evidence on behalf of the plaintiff was that the issue of payment was constantly being put off with excuses being made not to pay and that these activities amounted to dishonesty. It is said that the court should draw inferences positively against the defendants to support the allegation of conspiracy because these excuses were so flimsy and transparently unsound. There are, it seems to me, some important factors to be added in here. In the event that the second named defendant, as developer, instructed the first named defendant as main contractor, to change the dot size in this glass, under the contract such an instruction would have amounted to a variation. It has been made explicit in evidence to the court that in such an event the plaintiff would expect to be paid on that basis; and would therefore be due what would amount to a considerable sum for removing all of the glass and replacing it. These factors make it very difficult for the Court to come to the conclusion that all of the to-ing and fro-ing complained of amounted to a concerted action in furtherance of a conspiracy by the defendants as is alleged. Furthermore, the first named defendant at all times submitted the account of the plaintiff to the second named defendant for payment. In October 2008, the third named defendant and the plaintiff agreed a final account of monies due to the plaintiff in the sum of €1.6 million, but this was subject to abatement. This is claimed not to have been genuine. In reality, correspondence immediately thereafter from the fifth named defendant on behalf of the third named defendant to the paying party sought a sum of money in early course allowing for a discount of €600,000 on the defective glass but clearly and genuinely seeking to obtain a payment for the plaintiff of around €1 million. Later, in 2009, following the collapse of the unsupported property marked in Ireland, when a bank became involved, there was nothing apart from prudence which led that bank to require that such defects issues as remained must be cleared up. An allowance in support terms was made for under €1 million, but that allowance was nonetheless made and made in circumstances which bear no suggestion of bad faith.
A great deal of time has been spent on the issue as to who was responsible for the defective glass. Whereas this is not determinative of the issue of conspiracy, it is important that I express a view. In structuring large building projects, it is important that the parties can reach a clear conclusion as to which party will be responsible should any defect occur. A failure or inadequacy in materials can arise from improper choice or from improper manufacture or from improper design. Many different specialties may be involved in a large project and each of these will depend on the other to some extent. A defect can occur notwithstanding a specialist subcontractor being engaged. Defining responsibility in that event is the task of those who write the contract, or contracts, in order to reflect the intention of the parties. Some of these parties may lack knowledge as to the properties of steel structures, or bricks, or roofing material, or tiles or glass. If, for example, a contract is made that a particular material should be durable over a particular period of years, then the party supplying under that agreement assumes precisely that defined liability. The main contractor in bringing in specialised subcontractors is entitled to rely on their skill and knowledge and is entitled to proceed to structure the interrelationship of contracts so that what is supplied by a subcontractor will be the responsibility of that subcontractor alone. An architect, acting on behalf of an employer or on behalf of a main contractor is entitled to specify a particular material and to rely on the subcontractor to supply that material; provided that the form of the contract so provides. Here, the relevant subcontract clause which binds the plaintiff in its relationship with the first named defendant as main contractor, and is ultimately the description of responsibility upon which the second named defendant, as developer, is entitled to rely and to seek to enforce through the proper use of the contract provisions with the main contractor, is clause 6.6.4. Under the heading of “surface treatments generally”, it is provided that “All applied coatings (e.g. low emissivity coatings or frittings) shall be uniform in tone, hue, colour, texture, pattern and opacity and shall provide a consistent appearance to the glazed units. Any noticeable difference between one unit and another will not be permitted, unless expressly specified.”
This clause clearly delineates the reposing of responsibility in the plaintiff for the glass quality. No matter who was responsible ultimately for the banding appearance in the glass, Buckleberry or Romag or the plaintiff, and no matter who was told what, the clause is effective in terms of its plain words. It may be likened to a repair clause in a lease. In that instance, the condition of the building on demise does not matter or how the defect in it arose; what matters is the nature of the responsibility undertaken by the tenant. In this clause the responsibility undertaken by the plaintiff as subcontractor was to supply a glass for the courtyard roof which was uniform in appearance. It was not. No issue of real argument in respect of responsibility could arise. This had previously been defined by the contract. An argument might be made that the defect was not very important: but that argument becomes untenable in the context of the choice of the plaintiff to provide a product of excellent quality. Thereafter, had the glass not been rejected, which it was, an argument might be made as to abatement. Were I to try and sort out the contract dispute, which is not before me, as between the plaintiff and the first named and second named defendants, that latter course might arise under a contract clause to which I shall shortly refer, it might be remarked that the determination by the plaintiff to avoid the considerable costs of removing and replacing the glass, to a possible cost of possibly close to the amount the plaintiff was owed, but to seek an abatement eventually resulted in the agreement of 22 October 2008 with the third named defendant but even this was subject to a further agreement as to the correct level of abatement. The plaintiff was responsible for the glass defect and it was serious and it should not have occurred. It was reasonable to require the replacement of the glass.
I now want to put the contract provisions referred to in their necessary context.
The sub contract between the first named defendant McNamara and Company and the plaintiff is dated 5 January 2007. This provides, at clause 1 of the subcontract, that the plaintiff is deemed to have notice of all the provisions of the main contract except for prices. Clause 2 obliges the subcontractor to complete the works to the reasonable satisfaction of the contractor and of the architect/engineer at the time being under the main contract and “in conformity with the reasonable directions and requirements of the… programme agreed between the contractor and the subcontractor and approved by the architect/engineer, who in any case of default in carrying out the program may himself directed the order in which the subcontract works shall be carried out.” It is not unreasonable to interpret this clause as enabling the contractor, the first named defendant, to give a direction to remove and replace faulty materials. Under clause 3 the subcontractor agrees to comply with the provisions of the main contract and with the express provisions of the subcontract as if all the clauses of both were set out in one document. Clause 6 provides that where the contractor requires or authorises in writing any variation of or omissions from the subcontract works, or issues any instruction of the architect/engineer or issues any verbal instruction or direction involving a variation, to be confirmed in writing within five days, these are to be carried out. As I have previously implied; variations are not free, they must be paid for because they are outside what is initially agreed. Clause 7 provides that any delay renders the subcontractor liable in damages. Defects are provided for in clause 8. This reads:
The subcontractor shall within a reasonable time after receipt by him from the contractor or the architect’s/engineer’s or agents instructions or a copy thereof relating to the same, make good all defects, shrinkages or other faults in the subcontract works due to faulty materials or bad workmanship which the contractor (whether at his own cost are not) shall be liable to make good under the main contract. Provided that where the contractor is liable to make good such defects, shrinkages or other faults, but not at his own cost, then the contractor shall secure a similar benefit to the subcontractor and shall account to the subcontractor for any money actually received by him in respect of same.
An issue has arisen, and here I am grateful for the expert assistance of Gerard O’Sullivan, quantity surveyor and barrister, as to how this clause operates. It is reasonable to argue that in the event of defective works, that a subcontractor may be docked the cost of defective goods. It can be argued that those defective goods when forming part of a larger job, such as a roof, should cause a devaluation by way of certificate in themselves but that the subcontractor should not be docked the costs of replacement as under clause 8 that subcontractor is liable to make them good at his own cost. However, another view is possible. It is also arguable that where the parties, as here, agree the continuation of the work pending replacement for the purposes of early functionality, given the problem of delay and the time coming up to Christmas at which this occurred, that this operates as a new contract between the parties. Another view is also available that the cost of replacement, not just the cost of the defective material, may be withheld. The point made on behalf of the plaintiff is not so strong of itself as to advance a claim of conspiracy. Under clause 11 the contractor is obliged, after receipt of the subcontractor’s detailed progress statement, the subcontractor having applied to the architect for a certificate of payment and the inclusion of the amount of the value of the works and any variation as authorised for the benefit of the subcontractor, to forward such certificate for payment. As a matter of fact, at all material times throughout the course of the controversy that has been before me, it is apparent that the first named defendant, as main contractor, at all times was properly applying for the payment by the second named defendant, as employer, of what was due to the plaintiff a subcontractor. This included the uncertified glass works. In consequence, this includes the full remaining cost of the roof at €1.6 million plus VAT.
Clause 11 variously provides:
Fourteen days after the receipt by the contractor of any certificate from the architect/engineer the amount of certified therein to be due in respect of the subcontract works shall be due by the contractor to the subcontractor and the contractor shall within said time notified in writing to the subcontractor the amounts certified in the said certificate to be due to him, any authorised variations thereof less retention money, which shall mean in this contract the proportion attributable to the subcontract works of the money retained by the employer in accordance with the main contract and less a cash discount …
If the contractor shall fail to notify the subcontractor in accordance with the provisions of the foregoing subclause (B) then the contractor shall on demand to him by the subcontractor furnished to the subcontractor details of all monies certified for the subcontractor by the architect/engineer. Top If the contractor shall not furnish such details within 14 days after such demand the subcontractor shall be entitled to obtain these from the architect/engineer.
Payments made to the contractor in respect of work done and materials used by the subcontractor shall until received by the subcontractor be deemed to be money or money’s worth held in trust but without obligation to invest by the contractor for the subcontractor to be applied in records payment of the subcontractor’s account, subject always to the rise of adjustment by the architect/engineer in the event of his certifying that adjustment is necessary.
If the contractor does not paid to the subcontractor the amounts certified by any certificate issued by the architect/engineer to be due to the subcontractor within the period mentioned in subclause (B) thereof, then the subcontractor-may (without prejudice to any other right or remedy) apply to the employer for and the employer may make payment of the amounts certified to be due … may, if payment has not been received within seven days after receipt of payment by the contractor or within 28 days of the date of issue of the architect’s/engineer’s certificate covering the amount due in respect of the subcontract works, after seven days notice to the contractor, suspend the works for a period of 14 days and upon the expiry of the period, unless payment shall have been made in the meantime by the contractor or by the employer direct, may determine the subcontractor’s employment under the subcontract as from the date of such expiry. … may, without prejudice to other rights are remedies after 28 days from the date of the issue of the certificate by the architect/engineered to the contractor covering the amount due in respect of the subcontract works, be entitled to charge interest to the contractor on the amount included in such certificate that current bank rate of interest on overdrafts until such time as payment is made by the contractor, or by the employer under subparagraph (I) of this paragraph.
There then follows a detailed procedure in the event of a dispute. This is clause 11 (F) and it provides:
If the subcontractor shall feel aggrieved by the amounts certified by the architect/engineer or by his failure to certify or failure by the employer to honour his certificate in whole or in part within this time period stipulated in the main contract document, and then, subject to the subcontractor giving to the contractor such indemnity and security as the contractor shall reasonably require, the contractor shall allow the subcontractor to use the contractor’s name and if necessary will join the subcontractor as claimant in any legal proceedings by the subcontractor in respect of the said matters complained of by the subcontractor.
This clause just quoted, the final paragraph of clause 3 defining relations between the parties and the arbitration provisions which follow in the contract, are the main reasons for me concluding that the relationship between the parties was not governed by a special relationship giving rise to liability in negligence due to a breach of duty but was instead governed by contract. It should also be remarked that when this dispute first arose as to the proper payment for the plaintiff of €1.6 million and whether an abatement could be applied instead of removal and replacement, Clause 11(F) enabled an immediate arbitration as to the appropriate certification, with the plaintiff standing in the shoes of the main contractor, as against the second named defendant. I remain puzzled by why this was not undertaken as by any other factor in the case. It was the appropriate response.
Clause 12 provides that the contractor is obliged, as far as it was legally possible, to obtain for the subcontractor all the rights and benefits of the main contract in so far as these are applicable to the subcontract works. Set off is provided for in clause 13. This allows the contractor to deduct from any monies due, any amount agreed by the subcontractor as due to the contractor or as is awarded in litigation or arbitration in favour of the contractor. The contractor is entitled to set off against any money due “the amount of any claim for loss and/or expense which has actually been incurred by the contractor by reason of any breach of or failure to observe the provisions of the subcontract by the subcontractor, provided the amount of such set-off has been quantified in detail and with reasonable accuracy by the contractor” in a notice in writing specifying this intention to set off a quantified amount which must be given not less than 17 days before the money becomes due and payable. The argument is that whereas the glass was defective and might have been set off that the cost of replacement was in the future. I see that argument but I do not see it as being so strong as to advance the claim of conspiracy between the defendants. I see a contrary view as also being at least arguable.
On 31 August 2006 there was a meeting between McNamara and Company, as contractor, and the plaintiff as subcontractor. This added a number of conditions to the contractual relationship between these parties. Among them was a clause which provided that the main contract conditions would override anything to the contrary in the subcontract conditions. Clause 34 states: “Notwithstanding anything to the contrary, we will not be liable for payment of monies due under the terms of the subcontract until seven days after we have received such payment from the employer”. This had been preceded by an invitation to tender by letter dated 27 April 2006. Materials, goods and workmanship were provided for in the general conditions and contract particulars. These were to be in accordance with the standards and quality of workmanship “given within the other documents forming part of the Works package documents or by that given in instructions or directions issued in accordance with the provisions of the subcontract.” Minimum requirements were then set out, but these were not to override any of the requirements of the subcontract or the other works package documents. Three subclauses are relevant and these are now set out:
Where and to the extent that products, materials and workmanship are specified to be approved or the subcontractor is directed or instructed that they are to be approved, the same must be applied and executed in conformity with all such requirements and in respect of the stated or implied characteristics either to the approval of the architect or to match a sample approved by the architect.
Where samples are required for the approval of products or materials, the subcontractor shall submit samples or other evidence of suitability and should not confirm orders for or use product or materials until approval has been given. Approved samples shall be retained on site comparison with products and materials used in the subcontract works and the subcontractor shall remove them were no longer required by the contractor.
Inspection or any other action by the main contractor or client’s representative must not be taken as approval of samples, materials or products of work unless approval is given in writing.
In addition to these voluminous documents, a requirement specification of the employer was drawn up in April 2006. This applied to the glazed roof and the glazed wall and door elements. This is where all the trouble began. Clause 1.3 provided that the glazing contractor, and the plaintiff, would be entirely responsible for the roof achieving or exceeding the design and performance criteria. Clause 2.5.4 provided for the two panes of glass to be partially occluded by dots inserted by silk-screening, of fritting, between the layers of double-glazing. This was to cover the roof with 20 mm diameter dots on face one with an anti-slip finish colour to be agreed with the architect. Samples were to be submitted prior to manufacture for review “by the contract administrator”. Clause 5.3.1 required the drawings were to be submitted so as to ensure that they conformed to the specification and contract documents. The purpose of this was to show that the proposed construction met the performance and visual requirements of the specification. It is provided that the production drawings of the glazing contractors were not likely to meet this requirement. Under clause 11 the plaintiff was to follow recommendations in the use of all materials, to the highest quality, and carry out the works in accordance with the requirements of the specification. I have already quoted clause 6.6.4 as it is central to the dispute which broke out. In my view it was not a dispute which should ever have broken out as the plaintiff had sole responsibility for the condition of the glass.
As a combination, these contract provisions support my finding that the plaintiff company was responsible for the condition of the glass. There is no sustainable argument to the contrary.
So much for the relevant contract provisions.
I turn now to the allegation of conspiracy. There has been a gigantic amount of evidence as to how various documents ought to be interpreted. This, at times, has impeded the course of the trial.
The meeting founding the alleged conspiracy was in fact held on 30 June 2008 and four people attended. On behalf of the first named defendant, the managing director John McGowan, the eighth named defendant, was present. In addition, the fourth named defendant was there as well on behalf of the first named defendant. The third named defendant, Bruce Shaw Project Management Ltd, was represented by its principal John Balance, who is the fifth named defendant. Finally, Paul Newman, the seventh named defendant, attended on behalf of the developer and employer Cedartree Construction Ltd, the second named defendant. It is to be noted that Paul Hanby, the sixth named defendant, was not there at all. In the statement of claim in this case it is alleged that the court should add him into the conspiracy because, as it pleads, it is reasonable to assume that others were acting for him. A court cannot act upon what is reasonable as an assumption. The court can only act upon proof of what is probable. In this instance I am analysing whether there is prima facie proof only. There is no case what ever made out against Paul Hanby and I want to say that now.
It must be remembered that this is not like a criminal case where one of the parties to a conspiracy has turned evidence for the State, having been in effect an accomplice to wrong but now presenting himself in a penitent light. An example of that would have been the breach of competition trial before Cooke J, as designated specialist civil and criminal competition law judge, in the Criminal Courts of Justice in the People (DPP) v McNichoas and Others in May 2011. No such accomplice testimony exists. Any proof of a conspiracy is based upon the interpretation of the interaction over the next two years from the date of the meeting of each of the defendants, and in particular the fourth named, fifth named, sixth named, seventh named and eighth named defendants as representing themselves and their corporate principals. It is argued on this basis that a conspiracy exists and it is urged on the court that the acts and declarations of the co-conspirators in furtherance of the conspiracy are admissible each against the other. Whereas this is a principle of criminal law, and is probably applicable to a civil conspiracy, without deciding that issue, the real question before the court is whether or not the documents referred to as evidencing the conspiracy, and the circumstances surrounding the actions and declarations of the conspirators, as so alleged, sufficiently establishes a prima facie case that a conspiracy to unlawfully deprive the plaintiff of its money ever existed. I am taking that principle of cross admissibility as stated for this purpose as making each such document admissible against each of the alleged conspirators because in thus acting I am taking the plaintiff’s case, as I must, at its highest.
An interpretation has been placed on those documents to evidence on behalf of the plaintiff. Counter-interpretations have been put on behalf of the three groups of represented defendants. This is all very well. Either the evidence is sufficient of itself to establish a prima facie case of a conspiracy based on these documents, or it is not. Evidence can be given, for instance, to establish the factual matrix within which a disputed contract was made. Evidence can also be given of what might have been in the mind of a testator when making a will; the principle that the judge should construe the will by sitting in the testator’s armchair, or construe the contract by placing himself or herself around the table where the contract is concluded. Thereby the words of a will, or in the same way the words of a contract, can be seen against the correct backdrop. Interpretation, however, can only go so far. If the plain wording of the documents evidencing a conspiracy is either inconsistent with the unlawful purpose alleged or does not establish a prima facie case, the plaintiff must fail.
I turn therefore to the more important documents exchanged between the alleged conspirators and placed before the court as evidencing that prima facie case of a conspiracy has been established. It is to be noted that hundreds of items of correspondence between the parties among themselves and with others have been referenced in argument before the Court. I have decided which of these is central to the best case that can be made of conspiracy. No argument has been left unconsidered. Possible interpretations have been aired over four weeks as to these, and lots and lots of other, documents and I am aware of them all.
I rely on the evidence of Mr O’Sullivan, and on commonsense, that there is nothing wrong with the employer, the employer’s representative and the contractor meeting together towards the end of any large development job with a view to settling the final account. As of July 2008, around €5 million was due from the second named defendant to the first named defendant as a balance of the overall contract price of around €115million. The principles of the second-named and first named defendants were in correspondence with a view to setting up a meeting as the final payment, and as to amount given that there were claims as to delay and water damage, and as to the timescale in which payment would be made. Within the first named defendant a view given on behalf of John Ballance was exchanged to the effect that the plaintiff would be dealt with by him and his colleagues “and does not need to be part of the final account settlement. They will look for replacement, but may end up accepting corrective work and a credit.” Even at this stage an alternative shaded glass is being discussed. It is apparent that a final resolution of the abatement or replacement issue had not been resolved. On the morning of 30 June 2008 an early e-mail mentions leaks within the roof. A later note indicates that “some items are being dispositioned …Mero; Chesterbridge/ BSP will deal with Mero, including replacing the glass”. A reduction in the contract price of € 500,000 had already been mooted by the employer, the second named defendant, but at the meeting a further reduction was sought by the employer of €150,000. Prior to the meeting an intention to withhold the Mero money is in evidence and that appears again in correspondence between those individuals within the third named defendant. That intention arises on any reasonable construction of the documents because of the problem and not from anything that could be suggested to be an improper purpose. Thus, on 2 July 2008 an e-mail between the parties sets out a memo of the final settlement. The revised final account was about €115 million and additional discounts from that amount have been negotiated. The e-mail proceeds to indicate that the “quantity surveyors on both sides will clear the actual amount outstanding now and the future release of retention … we will work with you to resolve the Mero issue”. On 3 July 2008 it is noted between the parties to the meeting that there was “a firm commitment to make the penultimate payments no later than five weeks from the date of the meeting last Monday. … On Mero, we will continue to work with Chesterbridge and BSP to resolve the remaining issues, but the lead on these negotiations, and decisions on payment, glass replacement etc will be taken by Chesterbridge/BSP.”
I cannot see that this is wrong or is evidence of anything other than a continuing intention to try to work through a problem. The sum agreed at the meeting was €5 million to be paid within five weeks. This notional sum included €1.6 million due to Mero. The fourth named defendant and the eighth named defendant corresponded on 4 July 2008 and made reference to an e-mail concerning final settlement sent by the fifth named defendant. In that e-mail he refers to “the intention, as noted at the meeting, would be to make the penultimate payments to you within a maximum of five weeks.” There is a reference back to this in the e-mail as the fourth point mentioned: “I am astounded at number four John Ballance minutes attached-“the intention is to make an ultimate payment of c€5 million within five weeks”. My understanding was that they were confirming it would be paid in five weeks, and that this was when it would be scheduled. What is the payment period in the contract? Can we ensure that the quantity surveyors get together quickly to agree the final amount of payments certified as referred to in number 37.”
It is argued that this is evidence of a conspiracy by the defendants to cause Cedartree Construction Ltd, the employer and second named defendant, to pay €5 million to Michael McNamara and Co, the main contractor and first named defendant, which some would include the €1.6 million due to the plaintiff and that the defendants would keep this money for themselves. This allegation is extremely improbable for a number of reasons.
Firstly, it is highly unlikely that the second named defendant would seek a reduction of €150,000 on the sum due by it while at the same time entering into a conspiracy to unnecessarily pay out €1.6 million in respect of the work on the glass canopy which would never be paid by the first named defendant and so kept by them, or kept substantially by them, while batting down the plaintiff to an unreasonable sum through stringing the dispute out. No one sensible would agree to that unless there was something in it for them. There is no evidence that there was any such benefit or prospective benefit. Conspicuously absent is any agreement to divvy up unlawfully retained monies. This alleged agreement would involve completely wasted monies from the point of view of the second named defendant.
Secondly, an e-mail of 4 July 2008 between the fourth named defendant and the eighth named defendant refers to the hope that something might be saved in monetary terms on other works to do with paving in the courtyard area under the glass roof and that this “will in some way alleviate the ambush last Monday”. This is not indicative of a cosy agreement between the parties to the meeting to do the plaintiff down. Prior to the meeting of 30 July 2008 reference had been made in correspondence to a total due which would include a €1.6 million sum due to the plaintiff. On 18 July 2008, however, the sum due is reduced to take account of the fact that the money due to the plaintiff will not be claimed. It is clear from other correspondence that the nature of the glass and an issue as to leaking, for which the plaintiff was probably not entirely responsible but which was important, remained live from correspondence in the previous year.
I need to refer back at this stage. An e-mail sent by the third named defendant on 19 October 2007 indicated their attitude. This referred to the necessity to prepare a detailed estimate for the replacement of the glass. The e-mail goes on: “as advised the BSP/McN outline budget for the replacement of the glass is €1 – €1.5 million. At this point in time we will not be certifying additional monies until the parties to the contract resolve this issue.” This correspondence does not rule out the future certification, when proper, of the sum due for the glass canopy. An earlier exchange on that day refers to defective glazing. It states an argument made on behalf of the plaintiff: “as per the comment in my e-mail yesterday: monies have been withheld for an alleged defect to the glazing, however at the meeting yesterday (Wednesday) the glass manufacturer stated that they did not accept that the glass was defective. We therefore consider that it is premature to deduct money from our certificate due to this matter.” On 31 October 2007 the third named defendant had asked the plaintiff when they would be “issuing a method statement and program for the glass replacement as discussed at the last client meeting. As advised this information is required to enable us to prepare a detailed estimate for the glass replacement.” The issues as to the glass and its replacement and the roof and the leaks through it continued to dog relations between the parties at the time of the conspiracy and well beyond. It was easily to be resolved by invoking the arbitration clause.
Returning to 2008, approximately 3 weeks after the alleged conspiracy meeting, the first named defendant wrote to the third named defendant confirming the agreement on the final account which had been reached in the sum of €115 million. A paragraph in the letter states: “We note the amounts for nominated sub-contractors are agreed on the basis of full consideration of all sums due to these subcontractors under the sub contracts.” Was this an attempt by the first named defendant to get monies due to the plaintiff and keep it for themselves, or later divvy it up among the others? It is immediately apparent that this is not so. Both prior and subsequent correspondence indicates that the sum to be claimed does not include the money due to the plaintiff. An invoice issued by the first named defendant on 5 August 2008 makes reference to monies due “as per architect’s certificate” and claims an amount due of €3.5 million. Certificate number 35 from the third named defendant of 6 August 2008 reflects that. It is hard to see that this was not the right way to proceed under the contract; as this specifies no payment until certification, but that the subcontractor if dissatisfied could invoke clause 11(F) of the subcontract and arbitrate any dispute on non-certification or under-certification with the employer directly. Reasons have been given in evidence for not invoking this clause: some of these are self-contradictory. Whereas it might be said that litigation of any kind is not a good manoeuvre in business, this dispute was very unlikely to go away. The clause should have been invoked by the plaintiff once it adopted the position that it was not going to replace the glass. Correspondence of 22 August 2008 indicates that an invoice had been submitted by the first named defendant based on the figures. I do not regard the e-mail of 21 August 2008 within the first named defendant as being evidence of conspiracy. No one can now remember what the e-mail meant. It reads, as between the fourth named defendant and the eighth named defendant: “Kindly advise who is looking after the Change for Paul Newmann, regarding 3.5 million payment.” I am asked to take a meaning from this that “the change” referred to was the €1.6 million due to the plaintiff. There is no firm, or even sufficient, foundation here on which a court could begin to act. On 13 November 2008 an issue was raised that the first named defendant should begin legal proceedings against the second named defendant for an outstanding sum which would have included the €1.6 million due to the plaintiff. As it turned out, this did not happen. €2 million was paid on the 29 September to the first named defendant by parties associated with the second named defendant followed by a €100,000 payment on the 4 November 2008. On 17 November 2008 it is proposed to pursue a balance owing of about €1.02 million. This does not include the €1.6 million due to the plaintiff. This conspiracy allegation just does not hang together.
It is also argued that the timing of the revelation that there had been a final account meeting on 30 June 2008 is indicative of a conspiracy between the defendants. In that respect I have been referred to the affidavit of John McGowan sworn in the proceedings between the first named defendant and the second named defendant for the purpose of seeking summary judgement and dated 4 March 2009. This does not in any sensible way advance matters. The documents allegedly evidencing a conspiracy were supposed to have been exhibited in that affidavit but not read out in court, the plaintiff being present through a watching brief. This, however, is what often happens in a busy court list. In September 2010, having pressed for the release of relevant documents, including those to which I have made reference, these papers were formally discovered to the plaintiff.
Did the fact that there had been a final account settlement meeting come as a surprise to the plaintiff? There had been a meeting between representatives of some of the parties in Kilkenny on 22 August 2008. A note by David Barrow indicates that leaking had by then become more important than the banding issue. Another meeting had been held on 31 July 2008, prior to that meeting, where within the plaintiff a strategy had been involved to minimise the responsibility of the plaintiff in respect of the banding issue, to emphasise that no viable commercial alternative existed, and to press the position that the remedy for aesthetic defects lies in damages and not in replacement. As will have emerged from earlier references, the meeting in Kilkenny revolved around an alternative screen printing process. The document states:
To assist in defending Mero/Romag position in the forthcoming meeting with John Balance, Ken White is to produce a technical paper to dismiss the samples produced by Hall Print Solutions as being viable alternatives. David Barrow is to present this paper from Ken White at the meeting.
The fourth meeting took place near Heathrow airport in London on the 15 September 2008. It is clear that this meeting was held with a view to resolving the financial issues between the plaintiff and the main contractor and the employer, through the employer’s representative. A note made by David Barrow at that meeting reads under the heading “review of nominated”: “as BS has settled a/c with McN – problems of elongation payment etc.” An offer of abatement was made by the plaintiff of €250,000 in return for a prompt payment of €1 million. This offer was not sufficient to settle matters between the parties. It was always unlikely that it would never have been as the glass had been charged by the plaintiff to the job at more like €600,000. The note quoted leads on its own to a possible interpretation that the writer was aware that a final settlement had been reached between the first named defendant in the second named defendant. This was not treated with alarm by the plaintiff and nor is that surprising. I do not accept that an experienced contractor would find it sinister than a main contractor, the employer and the representative of the employer would seek to conclude a final account upon the practical completion of almost all the works in a major development. Neither is it suspicious that the total amount that would eventually be due would be tabled for agreement. Any reference to a penultimate payment does not exclude that whatever sum is eventually agreed in a disputed account with a subcontractor would be included in the ultimate payment that would incorporate retention moneys. On the contrary, this has not been established as being abnormal.
I am not impressed by this. Even less is the complete destruction of the surprise and concealment point, mooted as objectives of the conspirators, by reference to a letter written from David Barrow on behalf of the plaintiff to the first named defendant and dated 21 December 2009. One paragraph in this explicitly makes reference to the fact that the plaintiff had been told that there had been a final settlement of the main contractor’s account: “Our understanding is McNamara have had their account settled in full by the Employer with the exception of the [Mero Schmidlin UK] nominated account.”
The case of conspiracy falls apart. There was no conspiracy to abuse contractual relations to keep the plaintiff out of its money and there was no conspiracy to pay the first named defendant an effectively free sum of money from the second named defendant on the understanding that the plaintiff would never get it.
In this case, it is impossible not to have sympathy for the plaintiff. But that is not the only factor. This entire matter occurs against the backdrop of the over-ambitious projects in retail and residential accommodation that characterised the disastrous undermining of the Irish economy during the years 2000 – 2008. These projects could only be successful were there people to shop in them and reside in them. Those people could only have the kind of money to spend that was being asked for the rent of retail units and the sale of residential properties had they worked in industries or services of a productive kind. Through over-attractive and unreal prices for property, the economy was slewed away from production and towards an over-reliance on non-productive enterprises.
Many have lost heavily. The plaintiff cannot recover €1.6 million from the first named defendant, having been paid €1.4 million, because the first named defendant is now in receivership. The first named defendant is out of its contract money as developer at least €1 million and probably double that and more because of retention monies that remain outstanding. The second named defendant, the papers I have read in this case indicate, has had to rent the retail McDonagh Junction units cheaply or sell residential units at bargain prices and is a sorry entity as opposed to very profitable one. The third named defendant was owed substantial fees but had to take a discount due to a creditor’s voluntary arrangement of about 48%. The National Assets Management Agency has taken over the first named defendant and the people of Ireland are the ultimate carriers of what is now a severe burden of debt. None of this makes any difference to the issue as to whether there is prima facie proof of a conspiracy.
It is all very unfortunate, but there was no conspiracy to unlawfully, by whatever means, deprive the plaintiff of what was due to it.
The order for costs which I shall make, having heard argument, is to award each of the defendants their costs as against the plaintiff as Order 99 of the Rules of the Superior Courts requires. On the unsuccessful motion for security for costs brought at the commencement of the action, over one and a half of the fourteen days of the trial, by the second named, sixth named and seventh named defendants, these costs are awarded to the plaintiff. Presumably, there can be a set off but the calculation of the balance is not for me. Since enforcement of court judgments has become easier within the European Union, the principles governing an application for a defendant against a foreign defendant should more concentrate on similar principles to those set out in s. 360 of the Companies Act 1963, as this application did. There will be a stay on the costs order but only for four months and any extension thereafter is a matter for the Supreme Court.
Brennan v Flannery [2013] IEHC 145
JUDGMENT of Ms. Justice Dunne delivered the 20 day of March 2013
The plaintiff in these proceedings purchased a house at 10 Mockmoyne Heights, Boyle, Co. Roscommon. The house was a newly built house and was part of a small development of houses in Boyle, Co. Roscommon.
It appears that a contract for sale was entered into by Thomas Flannery and Catherine Flannery with the plaintiff on the 9th November, 1999, and in evidence, the plaintiff said that she took possession of the house around the 17th March, 2000. As is not unusual in the case of newly built houses, in addition to the contract between the purchaser and the vendors of the land for the purchase of the lands on which the house was built, there was a separate building agreement in respect of which the contractor was T & C. Developments Limited (hereinafter referred to as “the company”). The consideration for the purchase of the property was stated in the pleadings to be £85,000 or €107,927.74. This was made up as to £5,000 being the consideration for the purchase of the lands and £80,000 being the amount of the contract price set out in the building agreement. That agreement was also signed on the 9th November, 1999. In the course of the transaction, the plaintiff was represented by Kilrane O’Callaghan and Company, solicitors.
The plaintiff has had serious issues about the manner in which the house was constructed by the company and accordingly proceedings were issued by her by plenary summons dated the 10th February, 2003.
It is not necessary for me to describe the long procedural history of this action, but it is relevant to mention one or two matters. When the proceedings came on for hearing before me, the plaintiff no longer had legal representation. On the first day of the hearing the only defendant who appeared and was represented before the court was the National House Building Guarantee Company Limited, (hereinafter referred to as “Homebond”). Subsequently one of the defendants, Seamus Quinn, who had been a director of another defendant, Midland Design Services Limited, appeared and took part briefly in the proceedings. He left then to attend a funeral and took no further part in the proceedings. To a large extent therefore, the action proceeded as a case against Homebond, although I was satisfied that the other defendants had been notified of the trial date and with the exception of Mr. Quinn, they chose not to participate.
It should be said at the outset that the plaintiff herein has raised serious issues about a number of alleged defects in the house purchased by her from the Flannerys and the Company. They include a complaint as to stability of the foundations of the house, the construction of the footpath surrounding the house, a significant problem with damp, issues in relation to insulation and the fact that the site is waterlogged, to name but a few. Much of the hearing before me concerned the extent of the defects and the nature of the defects in the house. There was a significant argument as to the full extent of the defects.
A further issue concerned the liability of Homebond on foot of its guarantee with the plaintiff in respect of defects in the house. The latter issue is of central importance to the plaintiffs claim in these proceedings as the plaintiff contends that Homebond, by providing a guarantee are responsible to her for all defects found in the construction of the dwelling house. Homebond on the other hand contend that the plaintiff entered into a written guarantee and that she, the plaintiff, is subject to the terms of the guarantee and the limits contained therein.
It is not in dispute that the plaintiff signed the Homebond guarantee on the 91h November, 1999, at the same time as she signed the contract for sale and the building agreement.
Given that the extent of the liability of Homebond is central to these proceedings, I propose to deal with that issue first.
The Homebond guarantee provides inter alia for limits on liability in the following terms:-
“4(a) In particular neither the member nor the company shall be liable under this agreement or the guarantee certificate for:
(i) any defect which arises consequent upon negligence other than that of the member or his subcontractor;
(ii) any defect for which compensation is provided by legislation or which is covered by insurance;
(iii) any defect in consequence of drawings, materials, designs or specification provided by, or on behalf of the purchaser;
(iv) any defect caused by, or damage to anything not built into the dwelling pursuant to the contract of sale or building agreement entered into by the member and the purchaser;
(v) hair cracks, shrinkage, expansion, dampness due to normal drying out of the dwelling or condensation;
(vi) wear and tear or gradual deterioration;
(vii) consequential loss whatsoever and howsoever arising;
(viii) any defects in central heating; or
(ix) any defect consequent upon the installation in or about the dwelling by the member or otherwise of a lift or swimming pool.
(b) The company, its servants or agents, shall have no liability whatsoever or howsoever arising to the purchaser in respect of any claims for damages, expenses or other compensation relating to any act or omission in or about any proceedings relating to the dwelling and, without prejudice to the generality of the foregoing, shall have no liability in respect of any negligence or default in inspecting or failing to inspect the dwelling or in respect of the rendering operative, or the contents of, a guarantee certificate or in the investigation of a complaint made by the purchaser. Provided however that the provisions of this subclause shall not in any way limit the purchaser’s entitlement to pursue its rights and remedies under the guarantee certificate.”
Particular reliance was placed by Homebond on Clause 4(b).
In addition, the guarantee agreement places a limit on liability in the sum of £30,000 (€38,000) in relation to any major defect or any number of major defects.
The Homebond guarantee goes on to define major defect as:
“1. Any major defect in the foundation of the dwelling; or in the load bearing parts of its floors, walls and roof; or in any retaining wall necessary for the dwelling support; which effects the structural stability of the dwelling or
2. Smoke penetration from the chimney breast to the habitable areas of the dwelling
3. Water penetration through the main structural elements, roof flashings or roof valleys of the dwelling.”
It is further provided in the Homebond guarantee that upon the issue of the final notice in respect of the dwelling by Homebond, it shall become bound to the purchaser in the terms of the guarantee certificate attached in the first schedule to the guarantee, subject to the terms as set out in that guarantee certificate and the terms of the Homebond guarantee. Both the guarantee agreement and the guarantee certificate make reference to the rules ofHomebond.
It appears that if Homebond is correct in its contentions as to the terms of the guarantee, then it could only be liable to the plaintiff in respect of any or any number of major defects up to a limit of €38,000. I note, however, that in the course of the evidence it was conceded that, on occasion, Homebond has assumed a liability in respect of sums greater than €38,000.
It would also be helpful to set out a number of Homebond’s rules which were referred to in the course of the hearing. Before referring to specific rules, the general observation might be made that the rules provide for applications for membership of Homebond by builders/developers, conditions that may be attached to members and provisions in relation to the termination of membership. Rule 19 deals with applications for registration of a dwelling with Homebond and inspections in the following terms:-
“(a) A member who is obliged to enter into or has entered into a guarantee agreement in respect of a dwelling under rule 16 or rule 17 shall send to the company an application in the prescribed form for registration and for initial inspection of the dwelling not less than 21 days before commencement of work on site; such application shall be accompanied by any prescribed documents, plans, specifications and fees. Provided however, that the company shall be entitled, in its absolute discretion, to refuse an application for registration and inspection of a dwelling if the member or his associate is at the relevant time in serious breach of any of its obligations under the rules (including but not limited to the failure to make good defects in the dwellings and/or to discharge payments due to the company).
(b) If a dwelling is to be constructed on a site which is deemed to be a high risk site by the company, the member shall comply not only with its obligations under subrule (a) of this rule, but shall also notify the company in writing not later that two months before commencement of work on that site. (c) A member who is obliged to enter into or has entered into a guarantee agreement in respect of a dwelling under rule 16 or rule 17 shall send to the company 14 days before the dwelling is structurally complete an application in the prescribed form for final inspection of the dwelling. The member shall fully indemnify the company against any costs, losses or other damage howsoever arising by reason of any failure by the member to fulfil his obligations under this subrule.
(d) The company shall be entitled to require the member to carry out any opening up works which are necessary, in the company’s opinion, to facilitate any inspection of the dwelling by the company. The member shall fully indemnify the company against any costs, losses or other damage howsoever arising by reason of any failure by the member to fulfil his obligations under this subrule.”
It is also relevant to note that under rule 17:-
“Every builder member is required to enter into the current prescribed form of guarantee agreement at the same time as any contract which he makes to sell, build or complete a dwelling for occupation by the other party to that contract. This rule shall apply whether the building is to be built or completed on land owned by either party to the contract.”
For completeness it may be useful to refer also to rule 24(a) which provides: “That where the company is satisfied that the member has complied with the rules and that the dwelling is structurally completed to the satisfaction of the company, the company shall issue the final notice.”
Having set out the relevant terms and rules of the Homebond guarantee, I now propose to consider this evidence and the submissions made in respect of the extent of the liability of Homebond. It appears from the evidence in this case that the company became a member of Homebond after the commencement of the building of the development in which the plaintiff’s house is located. Mr. Thomas Crotty, formally employed by Homebond as an assessor, was called as a witness by the plaintiff and gave evidence that he carried out the assessment of the company on foot of which the company became a member of Homebond. The purpose of such assessment was to examine the technical competence of the company on its application to become a member of the Homebond scheme. When Mr. Crotty carried out the assessment he looked at a number of houses in the development. He required to see a house at the construction stage and then he would have filed a report on the technical assessment of the builder. Obviously that report was favourable as the company became a member of the Homebond scheme. He explained that the company would have had to apply to have existing houses being built covered under the scheme and for that purpose appropriate engineer’s certificates would be required and obtained. It was his recollection that there was an inspection of the property of the plaintiff on the 5th February, 1999, prior to the issue of the final notice HP11.
Conor Taaffe, the managing director of Homebond, described the process involved in becoming a member of Homebond. On application there is a technical examination of houses under construction or recently constructed. If already constructed, the house, provided it is unsold may be registered under the scheme. He explained that originally the Department of the Environment acted as agents for Homebond in carrying out inspections. In this context, he referred to a screen grab from the computer records of Homebond in respect of the plaintiff’s property. It indicated that there was an engineer’s report in respect of the property. This was required because there had been no inspection of the foundations of the house as the house was built when the company became a member of the Homebond scheme. He also explained that the final notice HB11 does not issue until the house is completed.
He went on to explain that HB10, the Homebond guarantee, issues at the time of registration of a building. It was not necessary to have an engineer’s report before the guarantee was issued. He explained that when an application for membership is first made, dwellings are usually under construction and there would not have been an opportunity to inspect the foundations. In those circumstances an engineer’s report will be obtained. He could not say when the engineer’s report in this case was obtained.
Normally, once a member is registered, Homebond would carry out two inspections, one at the stage of the foundations being put in and one before the final notice was issued. In this case, Homebond did not have the opportunity to inspect the foundations as the house was already constructed when the application for membership was made and the dwelling was registered with Homebond.
He confirmed that the main structural inspection was carried out by the Department of the Environment on behalf of Homebond. It appears that the house was completed in March 1998 and that Homebond relied on the engineer’s report. He reiterated that it was not necessary to have an engineer’s report before issuing a Homebond guarantee. There was an engineer’s report obtained in respect of the foundations and that was the report of Michael Archer dated the 10th October, 1997.
The Plaintiff referred to the certificate given by Michael Archer and commented that he was offsite by the 24th June, 1997. She stated this on the basis that two commencement notices were sent to Roscommon County Council, under the provisions of Part 2 of the Building Control Regulations 1991, one of which was signed on the 11th June, 1997, by Mr. Archer and the second of which was signed on the 24th June, 1997, by Mr. Flannery. In relation to this point, both of which are in respect of the development of eleven house at Mockmoyne, I do not know the basis upon which it was contended by the Plaintiff that the conclusion to be drawn from the signatures on the commencement notices being that of Michael Archer in the first instance and Thomas J. Flannery in the second instance means that Mr. Archer was offsite by the date of the second commencement notice. The relevance of this issue from the Plaintiffs point of view was that if Mr. Archer was “offsite” by the 24th June 1997, how could he have given a certificate in relation to the foundations on the 101h October 1997.The Plaintiff has reached that conclusion but there was no evidence from Mr. Archer before the court as to his involvement with the site, and having regard to the evidence I did have, I cannot say as a matter of fact that he left the site at any particular stage.
In the course of her evidence, the plaintiff described her understanding or notion of a guarantee as being something that guaranteed credibility and quality. She relied very much on the fact that the final notice, HB11, was issued by Homebond which allowed the house to be sold and, in those circumstances, she stated in evidence that Homebond was responsible for the wrongs of others. She argued, and her evidence was to the same effect, that she wanted Homebond to compensate her for all the defects which she described in the house.
There was some discussion in the course of her evidence as to whether or not she was aware of the documents that she signed in November, 2009. She said that she got the documents at different stages and that in relation to the Homebond guarantee she thought that she only received one page of the document. It was pointed out to her that the form of guarantee was one where there was writing on both sides of a single sheet of paper and her signature appeared on the second page of the document. It was pointed out that the Homebond guarantee was operative from the date of the final notice and that Homebond indicated their willingness to provide cover notwithstanding that the terms of the guarantee provided that it should be for a period of two years from that date. Homebond accepted liability for the defects covered by the guarantee because a complaint had been made within the time concerned to the member of Homebond.
I should note that Mr. Quinn cross examined the plaintiff and explained that he was on site once and that he signed off on a number of the houses when he was there including that of the plaintiff. There was some discussion between the plaintiff and Mr. Quinn as to his qualification as at an earlier stage of the proceedings, the plaintiff had suggested that Mr. Quinn was not a bona fide member of Engineers Ireland. I should say for clarification at this point, that Mr. Quinn became involved in this matter when he was asked by the company to furnish a certificate of compliance in relation to the development and in particular in respect of the dwelling house at No. 10 Mockmoyne Heights. That certificate of compliance was to the effect that the construction of the works complied substantially with the grant of permission and substantially with the building regulations applicable thereto. The certificate was dated the 291h July, 1999, and noted that Mr. Quinn did not supervise the construction of the relevant works and his inspection which was made on the 22nd July, 1999, was visual only. He added that the inspection did not entail the opening up of works, which had been fully/substantially completed on that date. To the extent that such inspection allowed and not taking into account matters which were inaccessible to him, he was of the opinion that the relevant works had been constructed in substantial compliance with the building regulations aforesaid. I will address the role of Mr. Quinn at a later stage.
I now want to consider the submissions of the parties in the light of the evidence on this issue.
The plaintiff’s submissions are quite straightforward. It is her case that in purchasing the property, she relied on the fact that it had a Homebond structural guarantee. She said that her reliance on the guarantee was based on Homebond literature which says that if a new dwelling house is not inspected, final certificate HB11 may not issue. It is the case that there is no doubt that the foundations were not inspected by Homebond and further, that Homebond relied on the certificate provided by Michael Archer in respect of the foundations.
I do not doubt for a moment that the existence of a Homebond guarantee is something that would be of influence in the consideration of a person purchasing a newly built dwelling. I accept that it was the case that as far as the plaintiff was concerned, it was a matter that she relied on in considering the purchase of this property. Her main argument centred on the contention that Homebond should not have provided a guarantee in circumstances where they had not inspected the foundations of the property. Further if they had not provided a guarantee, she would not have bought the property. The point was made by her that it was not appropriate for Homebond to have registered the dwelling under the Homebond scheme retrospectively.
In the course of submissions on behalf of Homebond, reference was made to the question of whether or not Homebond owed a duty of care to the plaintiff. Reliance was placed on the decision in Ward v. McMaster [1988] 1 I.R. 337, which was described as the high water mark in terms of the extent of a duty of care giving rise to a claim in negligence. That was a case which concerned the provisions of the Housing Act 1966, which enabled a housing authority to lend money to allow persons to purchase homes. The housing authority by virtue of regulations made pursuant to the Act was under an express statutory duty to ensure that the value of the property to be acquired was sufficient to be good security for the loan. The scheme set up by Louth County Council expressly provided that no advance would be made until the Council had satisfied itself that the value of the property to be acquired was sufficient security for the loan. Further the scheme was limited to persons whose means were below a certain level. The plaintiff sought to borrow money from the Council and the Council carried out a valuation of the property and advanced the money. The property turned out to be unfit for human habitation and the plaintiff sued, inter alia, Louth County Council.
The Supreme Court found that even though the housing authority was under an express duty to ensure that the property was of a sufficient value to be security for the loan that did not create a private law duty of care to the plaintiff. However, the court found that having regard to the special relationship between the parties, it was reasonably foreseeable by the Council that those applying under the scheme would not have the means themselves to assess the property and would rely on the Council’s agreement to make the loan as evidence of the value of the property. McCarthy J. commented that the Council could have excluded liability saying:-
“In any event, I see no bar to the County Council expressly excluding any representation to be inferred from the fact that it sanctions a particular loan. (p. 346)
It was contended that the facts of this case could not be more different. There was no relationship, special or otherwise, between the plaintiff and Homebond prior to her acquisition of the house. There was no express statutory duty on Homebond of a type similar to that at issue in Ward v. McMaster nor was there any representation by them of the type made by Louth County Council under the terms of its scheme.
Thirdly, the liability of Homebond was expressly excluded in the guarantee agreement signed by the plaintiff, the guarantee certificate and the Homebond rules. (See in particular clause 4(b) of the guarantee agreement).
It was pointed out that no evidence had been adduced by the plaintiff of any representation made by Homebond prior to her acquisition of the property upon which she purported to rely. Her express evidence was that she relied on her solicitor and that she expected that her solicitor would rely on the certification given by Homebond. There is no evidence of any representation made by Homebond, nor a misrepresentation which was capable of giving rise to a cause of action.
It was further contended that even if there was a duty of care of the kind contended for owed by Homebond there was no evidence of any breach on the part of the Homebond of any such duty of care. The complaint that has been made by the plaintiff is of a failure by Homebond in and about its assessment of the application for membership of the company, but in that context, no evidence of want of care was adduced or established by the plaintiff in that regard.
As I have already said a major part of the complaint of the plaintiff is that Homebond should not have registered the house under the scheme in circumstances where they had not been in a position to inspect the foundations and where the house was completed prior to registration. She has described the provision of the Homebond guarantee as a misrepresentation on the part of Homebond, giving the impression that the guarantee was a guarantee of quality and credibility.
Mr. Taaffe explained in his evidence as did Mr. Crotty that when there is an application for membership and the same is approved, the member may apply to have existing houses covered by the scheme provided that the appropriate engineer’s reports have been obtained.
I can see nothing in the Homebond literature, the Homebond rules, the guarantee or the final notice HB11 that precludes Homebond from registering a property which is either being built or has been built.
Homebond has expressly excluded liability in clause 4(b) of the agreement where it was provided:
“That the company, its servants or agents shall have no liability arising to the purchaser in respect of any claim for damages relating to any act or omission in or about any proceedings relating to the dwelling and shall have no liability in respect of any negligence or default in inspecting or failing to inspect the dwelling …”
There is simply no relationship of any kind between the plaintiff and Homebond prior to the signing of the Homebond guarantee and there is simply no evidence at all to the effect that any representation was made by Homebond to the plaintiff over and above the express terms of the Homebond Guarantee.
The plaintiff was somewhat vague in relation to the signing of documents prior to the completion of the purchase of the dwelling house, but I am satisfied that she signed the contract for the purchase of the lands, the building agreement and the guarantee agreement on the 9th November, 1999, at a time when she had the assistance of solicitors in relation to the purchase of the property. I accept as a fact that when she signed the guarantee agreement she had a single sheet on which there were two pages of writing incorporating its terms. Thus she had to have been aware of the limitations of the Homebond Guarantee.
I accept the submissions of counsel on behalf of Homebond as to the applicable law herein. In all the circumstances of this case, I cannot come to the conclusion that the plaintiff has established that Homebond owed a duty of care to the plaintiff giving rise to liability for all the defects in the dwelling house as contended for by the plaintiff.
It should be noted that Homebond has always accepted that it has a liability to the plaintiff on foot of the guarantee and I will come back to that issue later on in the judgment. However, I do want to refer briefly to a number of the other issues that have been raised by the plaintiff in relation to the defects in the house.
The plaintiff in these proceedings has stated in evidence that it is her view that the property should be demolished and that it should be rebuilt. I have to say that having reviewed all the evidence in this case I can see no basis upon which it would be appropriate to take such an extreme step. One of the concerns that the plaintiff has relates to the foundations of the property and the question of whether or not the foundations are in some way unstable. This relates in part to a crack which has been identified in the gable wall and which was stated to have arisen because of instability in the foundations. According to one of the plaintiff’s witnesses, Mr. Cooney, the crack which was identified in a site visit by Mr. Cooney on the 9th January, 2013, was not present when another of the plaintiff’s witnesses, Mr. Manning had visited the previous July. Having considered all of the evidence in relation to this aspect of the matter I have to say that I am not satisfied that that crack is due to any instability in the foundations. This is a property which has now been built for over thirteen years and if there was such a level of instability in the foundations, I think it would have manifested itself prior to this.
The second issue relates to drainage on the site and part of the problem relates to the extent or level of water beneath the floor slab. There are two things I think I should say in relation to this. First of all, I accept as a matter of fact that the site on which the house is built is very poorly drained. The photographs produced by the plaintiff are clear evidence in support of this view. In my view it is a genuine and real issue with the property. There was a dispute in the evidence in relation to the level of dampness underneath the floor slab. To that extent it is necessary to explain that a number of bore holes were drilled within the house and Mr. Cooney and Mr. Manning’s evidence in regard to the level of water under the building is disputed by the witnesses on behalf of Homebond. There was also an issue as to the question of a gap under the floor slab. I accept that the damp proof membrane under the floor slab has been damp on some occasions but I have to say that I am not convinced by the evidence on behalf of the plaintiff that there is standing water under the building or that the water level under the building is such that it is in contact with the damp proof membrane. I do, however, accept that there is a problem with the drainage of the site and in particular the drainage around the house. It seems to me that this is a matter which should be attended to as matter of urgency.
There has never been any dispute between the parties that there is a significant problem in relation to damp proofing in respect of the property. The difficulty that has been identified as a result of the investigations carried out on site is that the damp proof membrane under the floor slab does not lap over the damp proof course. It is necessary that the DPM and the DPC should be appropriately sealed in order to stop rising damp. This is not an issue in dispute between the parties, although there is a degree of dispute as to level of the problem. It may also be that this problem was contributed to by the conduit that has been described in the course of evidence which comes from a trap on the road outside the house and carried some wiring into the house under the floor.
There are a number of other issues that were referred to in the course of the evidence. They relate to matters such as the support for the water tank in the attic, the question of fire separation within the attic space between the garage and the rest of the house, diagonal bracing in relation to the roof as constructed and issues as to the lack of insulation.
Another significant issue identified by the plaintiff was the construction of the footpath which surrounded the house. That footpath has undoubtedly been constructed inadequately and the net effect of that is that the footpath has settled or subsided. There are bad cracks at different points in the footpath. This has created additional difficulties for the plaintiff in that her central heating boiler was placed on that footpath to the rear of the house. As a result of the settlement in the footpath, the central heating boiler has tilted and for that reason the pipework has been distorted and consequently the plaintiff has not used her central heating system since approximately 2004. Since then she has relied on a portable gas heater within the house. Clearly this has had an adverse effect on the plaintiff in terms of living in comfort in the house.
I have no doubt that the plaintiff is entitled to a remedy in respect of the problems that have been identified in the construction of the property in the course of the evidence. Many aspects of the development carried out by the company were unsatisfactory apart altogether from the problems with the plaintiff’s house. There were problems with the drainage of the estate as a whole and it was not for a number of years that an appropriate drainage system for the development was installed.
On the evidence before me, it is clear that the construction of the plaintiffs house was unsatisfactory and that the plaintiff must be entitled to a remedy against Thomas and Catherine Flannery and T. & C. Developments Limited. One of the difficulties in this case is that no evidence of any kind was led by the plaintiff in relation to the cost of rectifying the defects identified in the property. I indicated to the plaintiff in the course of the hearing that I would permit her to call appropriate evidence in this regard. I will hear further from the plaintiff in respect of this issue.
I also want to deal with the claim of the plaintiff against Seamus Quinn trading as Midland Design Services Limited. I have referred previously to the very limited involvement of Mr. Quinn in the course of these proceedings. Mr. Quinn became involved because as part of the conveyancing aspect of the matter, he provided a certificate of compliance to T. & C. Developments Limited. Having regard to the terms of that certificate and having regard to the evidence led by the plaintiff in respect of the liability of Mr. Quinn trading as Midland Design Services Limited, I cannot see any basis upon which liability could be imposed on either Mr. Quinn or Midland Design Services Limited, which I understand is now in liquidation. I should also observe that I could not see any reason for calling into question Mr. Quinn’s professional qualifications.
I now want to turn to the question of the extent of the liability on foot of the guarantee of Homebond to the plaintiff. It has always been accepted that Homebond has a liability to the plaintiff in respect of the problem with damp penetration. From the letter of the 2ih September, 2002, it was indicated by Homebond that they were prepared to carry out remedial works to remedy the water penetration/dampness defect in the dwelling by (i) installing adequate drainage at the front of the dwelling to collect surface run off, connect new drainage and existing water gully traps (if required) to the storm water drainage system (ii) identify walls where DPC and floor DPM do not overlap, remove timber skirtings and hack off plaster, paint proprietary waterproof product and block work, refix, (replace of necessary) timber skirtings or if that was not feasible to cut out sections of the concrete floor adjacent to walls where the DPC and floor DPM do not overlap and so on. It was confirmed that if ceramic floor tiles or timber floors have to be removed to facilitate the works that reinstatement would form part of the works. It was pointed out that alternative accommodation was not covered under the terms of the guarantee, but, if necessary, there was an offer to make a contribution as a gesture of good will. That was not acceptable to the plaintiff and she issued proceedings in February 2003.
Subsequently in June 2006, a further letter was written to the plaintiff on behalf of Homebond describing works that they were prepared to carry out. It was stated in that letter that those works represented clarification and confirmation of the works proposed in the letter of the 2ih September, 2002.
In the course of the hearing before me, evidence was adduced on behalf of Homebond as to the extent of works that could be carried out in relation to the remedying of the defects identified and two detailed bills of quantities were put before the court in relation to the scope of works identified by Homebond. Those were produced by Mr. Rothwell, a quantity surveyor. The first option proposed by Mr. Rothwell involved a total expenditure of €19,984.61 and involved opening up and carrying out repairs to a limited portion of the house. The second option provided for a more extensive opening up and repair of the problem caused by the failure of the DPM to meet the DPC and that option involved a total expenditure of €50,952.99.
Much evidence was given in the course of the case in relation to the extent of the damage caused by the problem in respect of the damp proof course and DPC and in relation to remedying the problem of damp in the house. Having considered all of the evidence, and in particular that of Mr. Taaffe, Mr. Colm McKiernan who gave evidence on behalf of Homebond, as to damp meter readings in relation to the house and the evidence of Mr. Quigley, together with the evidence of Mr. Cooney on behalf of the plaintiff, I am satisfied that in order to eradicate this problem, what requires to be done is the works specified in the latter option described by Mr. Rothwell, in other words, the works totalling a sum of €50,000 approximately.
I note that the financial limit of the Homebond guarantee is stated to be €38,000, but as I mentioned previously, it was clear from the evidence of Mr. Taaffe and Mr. Crotty that Homebond does from to time to time carry out works to remedy major defects which cost more than the limit provided for in Homebond guarantee. It is clear that the guarantee envisages that in certain circumstances, the company Homebond, may make good any major defects in a property and may be entitled to enter on to the property for the purpose of carrying out such works. I have no doubt that it would be appropriate in the circumstances of this case for the works described in the second option to be carried out in order to remedy the major defect present in the plaintiffs house. In circumstances where it is clear that Homebond from time to time will carry out works to a greater extent than that provided for in the guarantee it seems to me that this is one of the rare cases where that should be done and accordingly I am directing that the works be carried out in accordance with option (b). I recognise that the relationship between the plaintiff and Homebond, at this stage is such that it is not realistic or feasible to expect that Homebond could at this stage have its contractors carry out the work in respect of this property. For that reason I think it would be appropriate to have Homebond discharge the sum provided for in the second option to the plaintiff for the purpose of having the works carried out.
I have the utmost sympathy for the plaintiff in the circumstances in which she has found herself but the fault for this rests not with Homebond but with the builder of the house. Homebond’s liability is derived solely from the terms of its guarantee. Accordingly, I propose to give judgment to the plaintiff in the sum of €50,952.99 against Homebond.
I will hear further from the plaintiff in relation to whether or not she wishes to pursue the question of providing evidence to the court in relation to the liability of Thomas Flannery, Catherine Flannery and T. & C. Developments Limited.