The Court of Appeal allowed an appeal by John Lally against a High Court damages award to Michael Begley over two marina berths, ruling that the trial judge had granted relief on a claim that was never pleaded or argued. The court invited further submissions on whether the collateral contract issue should be remitted to the High Court; it did not decide that question in this judgment.
The appeal concerned a €59,289.26 award made by Baker J. in April 2018 against Damesfield Limited and Lally. Begley had purchased two berths, numbers 56 and 57, at Jolly Mariner Marina Village in Athlone. Rocks obstructed access, leaving the berths unusable. Begley knew of the rocks before completing the purchase, but testified that he relied on assurances that the access problem would be resolved.
The High Court rejected Begley’s pleaded claims concerning implied contractual terms, access rights, nuisance and quiet enjoyment. It nevertheless found that assurances about resolving the rocks formed a collateral contract and awarded damages for its breach.
In the appeal, Lally challenged the evidence supporting that finding and argued that the collateral contract claim had not been pleaded. The Court of Appeal held that the trial judge had evidence capable of supporting the finding: Begley’s testimony was supported by later management company meeting records and other evidence, and was not contradicted by Lally or Damesfield. The appeal court said that evidence could be sufficiently cogent to establish a collateral contract.
But the court found that the claim had not been included in the pleadings, no application had been made to amend them, and the issue had not been squarely addressed in legal submissions at the end of the trial. A claim for breach of a collateral contract was separate from the pleaded claims about the leases and had to be particularised. The appeal court said Lally had been denied a fair opportunity to address the claim and its legal basis before the trial judge.
The court therefore allowed the appeal on procedural fairness grounds. It did not finally determine whether the collateral contract issue should be sent back to the High Court. The parties were directed to make further submissions on remittal and costs: Lally was to file within three weeks, followed by Begley within three weeks of receiving Lally’s submissions.