The Supreme Court has upheld the interpretation of a settlement requiring Jackie Greene Construction Ltd to ensure that Irish Bank Resolution Corporation (IBRC), in special liquidation, received its 50% share of development profits as determined by an expert. It ruled, however, that the High Court’s order for judgment for the full sum against the construction company was not the appropriate form of order.
The appeal concerned a settlement reached in November 2011 after a dispute over loan-funded residential and commercial development at College Drive, Terenure. The company had alleged that IBRC removed €6,279,354.06 from a designated account without notice or consent while the development was incomplete. Those were allegations in the underlying dispute, not findings made in this appeal.
Under the settlement, the parties appointed an expert to determine the development’s profit or loss. The expert assessed the profit at €17,655,857, giving each party a 50% share of €8,827,928.50. The agreement provided for payment first from funds held under the parties’ undertakings and then, if needed, from net proceeds of remaining unit sales. It said that distribution would continue until the expert’s profit figure was met or the proceeds from all units were exhausted, whichever came first, but did not state expressly what would happen if proceeds ran out first.
The High Court had held that the company owed IBRC €8,827,928.50, with credit for sums already received and for half the net proceeds from unsold units. It stayed execution and registration of the judgment pending sale of those units. One unit remained unsold when the Supreme Court heard the appeal.
The company argued that the settlement preserved an equal sharing of whatever profit was actually realised, and that neither party could claim further payment once the remaining sale proceeds were exhausted. IBRC argued that the expert’s determination was final and binding, and that the agreement did not make the expert’s share conditional on actual proceeds being sufficient.
Chief Justice Clarke said the expert’s assessment necessarily involved estimates for unsold units, so the final figure might differ from profits ultimately realised. The expert process would have little purpose if the parties could recalculate their entitlements after all sales. Reading the settlement as a whole, including the provision linking release of encumbrances and personal guarantees to full payment of IBRC’s profit share, the Court concluded that the agreement bound the company to procure payment of the expert-determined share, even if that meant a departure from the original 50:50 split of actual profits.
The Court nevertheless said the High Court should not have entered judgment for the full sum. The settlement specified a method of payment, and accrued interest on IBRC’s funds had to be credited. Clarke proposed orders for release of the money held by IBRC and a declaration requiring the company to make up any shortfall, whether by releasing funds it held or otherwise. He proposed hearing counsel further on the precise form of the orders. The judgment therefore did not set out the final form of those orders.