[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	High Court of Ireland Decisions
You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Crofter Properties Ltd. v. Genport Ltd. [2002] IEHC 94 (10 September 2002) URL: http://www.bailii.org/ie/cases/IEHC/2002/94.html Cite as: [2002] IEHC 94

[New search] [Printable RTF version] [Help]

THE HIGH COURT

1996 No. 25P

BETWEEN

CROFTER PROPERTIES LIMITED

PLAINTIFF

AND

GENPORT LIMITED

DEFENDANT

JUDGMENT of Mr. Justice McCracken delivered the 10^th day of September, 2002.

Background

1.      The facts of this case were set out in detail in my judgment of 23^rd April 2002 and do not need to be repeated here. It is sufficient to say that the Supreme Court have held that telephone calls made by Caroline Devine were made by her as found in the Supreme Court judgment of Murray J. at p. 7 “in her capacity as a person with an important position in the affairs of the company for the purpose of furthering its interests and in such a manner as to engage the responsibility of the respondents for her actions.” The case has been remitted to me to assess damages, determine the defendants right to set of and its right to relief against forfeiture.

General Damages

2.      There is no express evidence of actual loss suffered by the defendant as a result of the allegations in the telephone calls made by Caroline Devine. However, there is certainly general evidence that the morale of the staff in Sachs Hotel was affected, and also general evidence that members of the Garda Siochana were frequent customers of the hotel and may have been affected. It must be remembered that the defendant is a company, and a company of itself is not capable of having feelings which can be injured by false allegations. However, a company does have a reputation, and that reputation can be injured, and I believe I am certainly entitled to infer in the circumstances of this case that there probably was some injury to the reputation of the company, and some loss of efficiency of its staff by reason of these allegations. However, I fully accept the arguments on behalf of the plaintiff that this is not a comparable situation too, for example, De Rossa -v- Independent Newspapers (1999) 4 IR 432, where similar very serious allegations of criminal offences and indeed of acts against the State were made in a Sunday newspaper. The publication in this case was to members of the South Eastern Regional Crime Squad in the United Kingdom, but with the clear intention, and knowledge, that the allegations would be repeated by that authority to the Garda authorities in this country, and I think with the equally clear intention that they would be acted on by the Garda authorities. At the end of p. 5 of his judgment in the Supreme Court Murray J. said:-

“Having regard to all the parties named in the allegations which were made to the police by Ms. Devine in my view, one could only conclude that the allegations contained in those phone calls were motivated by this relationship and calculated to damage not only Genport directly by making express references to that company but also indirectly by making damaging allegations against Princeton and its directors.”

3.      At p. 6 he made the further finding:-

“Having regard to all the facts and circumstances I am fully satisfied that the only proper inference to be drawn from the actions of Ms. Devine is that as a person deeply involved in a responsible position for the affairs of the respondent company and in the furtherance of its interests sought to damage the appellants in the hope that this would somehow assist the respondents in their objective of regaining possession of the hotel which it has leased to the appellants.”

4.      On these findings there is a clear indication that it was the plaintiffs intention to damage the defendant, and it should be noted that the principles in the plaintiff, namely Hugh Tunney and Caroline Devine, had both been involved in the hotel trade, and would have known the type of allegations which would damage a hotel business such as that operated by the defendant. I think therefore that the defendant is entitled to some substantial general damages, based on the likelihood of loss of various kinds including loss of reputation. In this judgment I intend to refer to damages in the old currency, and I will assess general damages in favour of the defendant in the sum of £50,000.

Exemplary or Punitive Damages

5.      It is quite clear that these calls were made maliciously and, as the Supreme Court held in the passage quoted above that these telephone calls were made maliciously and with the intention of causing damage. The behaviour of Ms. Devine, and in the light of the Supreme Court judgment, of the plaintiff was quite beyond the bounds of normal civilised behaviour and far outside any accepted commercial relationships. It was calculated to damage the defendant unlawfully and through unlawful means to gain a benefit for the plaintiff. I also think that the proper inference to be drawn from the fact that the allegations were made to police authorities in the United Kingdom rather than in this jurisdiction was that giving false and misleading information to a police authority is of course a criminal offence. I have no doubt that Ms. Devine and possibly the plaintiff committed a criminal offence in the United Kingdom, but that offence of course is not punishable in our jurisdiction. However, I would like to make it clear that I am not in anyway holding that the plaintiff or Ms. Devine committed no criminal offence in this jurisdiction, they may well have done so, but that is not the subject matter of these proceedings.

6.      The leading case on exemplary damages is the Supreme Court decision in McIntyre -v- Lewis (1991) 1 IR 121. In that case McCarthy J. said at p. 138:-

“Exemplary or punitive damages are intended to reflect disapproval – they are particularly appropriate for assessment by a jury. The damages reflect the standing of both the abused and the abuser but one should look, in particular, to the standing of those responsible for the malicious prosecution. Such an action may be brought against an ordinary member of the public, but here it is against two individuals charged with the guarding of the peace and the protection of the public. It seems clear that from the very beginning they conspired together to concoct a malicious prosecution and conceal their own assault; they conspired to pervert the course of justice. In my opinion, the damages appropriate to a case of this kind must reflect the proper indignation of the public at this conduct, whatever windfall it may prove for the plaintiff in the result.”

7.      In the present case the plaintiff did concoct or attempt to concoct a malicious prosecution against the defendant and did attempt to pervert the course of justice. Furthermore, it did so for the purpose of its own commercial advantage, and in an attempt to prevent or restrict the defendants rights under the landlord and tenants legislation.

8.      In the same case, O’Flaherty J. took a more conservative approach. He adopted the three considerations which Lord Devlin in Rookes -v- Barnard (1964) AC 1129 said should be borne in mind when awarding exemplary damages. He set those out briefly in summary at p. 140 as:-

1. The plaintiff cannot recover exemplary damages unless he is the victim of the punishable behaviour. The anomaly inherent in exemplary damages would become an absurdity if a plaintiff totally unaffected by some oppressive conduct which the jury wished to punish obtained a windfall in consequence.

2. The power to award exemplary damages constitutes a weapon that, while it can be used in defence of liberty, can also be used against liberty. The judge was pointing to the need for restraint in the amount of damages that should be awarded.

3. The means of the parties, irrelevant in the assessment of compensation, are material in the assessment of exemplary damages. Everything which aggravates or mitigates the defendants conduct is relevant.”

9.      He then commented further on:-

“The award of exemplary damages is anomalous and where such damages are awarded – which should be very rarely in my judgment - the judge or jury must keep them on a tight rein. If the compensatory amount awarded includes aggravated damages then I believe if any award is made by way of exemplary damages it should properly be a fraction rather than a multiple of the amount awarded by way of compensatory damage (including aggravated damages).”

10.      In some cases, the relevant damages have been called “punitive damages”, and in other cases “exemplary damages”. Whichever be the proper phrase, I think it is quite clear that the intention of such damages is either to punish or make an example of the guilty party. I have to say that I would prefer the view of McCarthy J. that if the conduct of the guilty party is such as requires them to be punished or made an example of, then the damages should be awarded on that basis and without regard to the possibility of a windfall to the innocent party.

11.      A further factor which must be taken into consideration in assessing exemplary damages is that Caroline Devine, who made these telephone calls, gave what was clearly false evidence under oath, and in my view committed perjury. I think her position is made even more reprehensible by the fact that she chose, when giving her false evidence, to try to paint herself as a person of strong religious beliefs, notwithstanding the fact that she was clearly prepared to lie under oath.

12.      It has been urged on me by counsel for the defendant that in effect I should assess exemplary damages at a figure which means there is no further liability on the defendant in respect of arrears of rent. I do not think this is a proper basis on which to assess exemplary damages, although I do accept that I am entitled to have some regard to the financial position of the parties. I think I also must have some regard to the guidelines laid down by the Supreme Court in regard to general damages for defamation, as I think it would be wrong that the court would award a higher figure in exemplary damages than it could ever award for general damages. However, this is an extremely bad case and is one in which there must be some very substantial penalty imposed on the plaintiff. I will propose to assess exemplary damages of £250,000.

Set Off

13.      There is no doubt that the sum which I am awarding, amounting to £300,000, may be set off against all sums owing by the defendant to the plaintiff in respect of rent. Two questions remain outstanding. Firstly, it is submitted on behalf of the defendant that costs should also be awarded to the defendant and that these costs should also be set off against the sum owing. I cannot accept this argument. Set off is a defence, and therefore the right to it must exist at the time of the issue of proceedings. In any event, costs if they be awarded to the defendant, will still remain unliquidated until such time as they are taxed, which would mean that the plaintiff would not be entitled to recover moneys undoubtedly due to it until after taxation of costs, which might be some very considerable period for appeals to the court. Accordingly, the only sums which can be set off are those in the judgment.

14.      However, there is a further point which arises, namely that I have granted a stay over the years on a judgment for the agreed sum due to the plaintiff of £588,605.41 subject to the defendant paying interest on that sum. As I am now finding that the correct sum due is £288,605.41, the defendant has been paying interest on £300,000 from 23^rd April 1996 to date. As that £300,000 was not due, the interest payments should only have been calculated on the balance of £288,605.41, and the defendant should be given credit for the overpayment of interest. The amount due by the defendant to the plaintiff will, therefore, be the sum of £288,605.41 less the overpayment of interest.

15.      The defendant also claims that the interest rate which I awarded, which was Courts Act interest, far exceeds deposit interest rates offered during the period 1996 to 2002, and therefore there should be a further allowance in respect of the excessive interest. I do not accept this argument, firstly as the rate chosen was the Courts Act rate, and therefore the rate at which a judge may award interest on arrears, and secondly because I do not think that interest in a situation such as this does equate to deposit interest rates. This could only be so if the plaintiff had surplus funds and therefore would have placed them on deposit with the bank, but it may well be that the plaintiff had to borrow money because of the failure of the defendant to pay interest, and interest rates on loans over this period would probably have equated to something in the region of 8%.

Relief against forfeiture

16.      There is no doubt that the defendant failed to pay rent when it fell due, and therefore breached the terms of the lease, thus entitling the plaintiff to forfeit the lease. However, the plaintiff is entitled to claim relief against forfeiture and has done so. It is again urged on me that this relief should be granted unconditionally, in other words that it should not be dependant on the defendant paying the arrears of rent due. I know of no case in which this has ever been done, nor has any been cited to me. The general principle of relief against forfeiture is that the court will relieve a tenant from having its lease forfeited if, and only if, the tenant remedies the breach of covenant which led to the forfeiture. In the case of relief against forfeiture for non payment of rent, the only way in which that can be done is by the payment of the rent. Furthermore, in the present case, while I have held that in the circumstances of this cause of action the plaintiffs behaviour was totally reprehensible, nevertheless throughout the history of the relationship between the parties as landlord and tenant, both parties have behaved unreasonably and unprofessionally.

17.      In the circumstances which gave rise to the failure to pay the rent, I think that it was understandable, even if not legally excusable. I will grant relief against forfeiture conditional of the defendant paying to the plaintiff the balance due in these proceedings within 28 days of the perfection of the order. I will make it clear that this payment must include all moneys due by the defendant to the plaintiff up to the date of payment.

18.      There will therefore be judgment for the plaintiff in a sum calculated in accordance with my judgment, being all sums now owing for arrears of rent and insurance premia at this date, being the euro equivalent of:-

A. The sum of £588,605.41 less payments of interest from 23^rd April 1996 to date on the sum of £300,000.

B. All, if any, current arrears of rent and/or insurance premia. Less a set off in the sum of £300,000.

19.      I will assume that the parties will be able to calculate these figures properly, but if there are any problems there will be liberty to apply.

20.      There will be judgment for the defendant in the counter claim in the sums of £50,000 general damages and £250,000 exemplary damages and there will further be a declaration of relief against forfeiture in favour of the defendant conditional on the payment of all sums due to the plaintiff within 28 days of the perfection of this judgment.