The Supreme Court allowed Michael Keohane’s appeal against the dismissal of his proceedings against solicitors Duncan Grehan and Partners, ruling that the claim had not been shown to be bound to fail. The Court set aside the High Court order against the firm. It did not decide the truth of Keohane’s allegations or the merits of the claim at trial.
The dispute arose from a September 2000 agreement for the sale of Keohane’s shares in Lawayo Limited. Keohane alleged that he had instructed the solicitors to arrange a sale to John Hynes personally, but that the written contract named Studley Investments Limited as purchaser. He claimed the firm failed to explain that distinction and drafted terms that did not adequately protect him. He also alleged a conflict because the firm acted for both sides.
The contract reportedly left more than IR£650,000 unpaid. Keohane claimed Hynes was liable for the euro equivalent, with interest, and brought claims against the solicitors in negligence, contract and misrepresentation. The judgment records that Studley later became insolvent and was dissolved; it does not determine liability for the unpaid balance.
The High Court dismissed the proceedings after concluding there was no evidence Keohane had believed he was contracting with Hynes personally. On appeal, the Supreme Court said the High Court had assessed disputed evidence and credibility in a way that went beyond the narrow role of a court hearing an application to strike out a case as bound to fail. At that stage, the court must allow a claim to continue if there is a credible basis on which the plaintiff might establish the necessary facts at trial.
The solicitors’ counsel accepted for purposes of the appeal that Keohane could establish alleged breaches of duty or contract, but argued that he could not show resulting loss. The Supreme Court was not persuaded that the claim necessarily failed on that basis. It said the case was not clearly a “no transaction” case: evidence at trial might support Keohane’s contention that a properly advised sale could have been made to Hynes personally on better terms. The Court left those questions for trial and did not decide whether loss could ultimately be proved.
The Court also recorded that a separate application to introduce a recording of a conversation involving Keohane’s wife was unnecessary to decide, because the appeal succeeded on the evidence already before the High Court. The judgment noted that the High Court had also struck out the claim against Hynes, although he had not applied for that order. The judge said he would be minded to allow that part of the appeal too, subject to clarifying its status with counsel; no final order on that aspect is stated in this judgment.