Judgment: 2015-11-30 · Court archive

High Court finds FÁS liable over lease assurances for training centre premises

The court found that FÁS negligently misled pension scheme trustees into buying and refurbishing a Dublin industrial unit, and set out a damages award while excluding interest for a period of delay.

High Court · [2015] IEHC 777

Who, what, where, when and why

Who
  • Billy Hayes (Plaintiff)
  • FÁS
What

The court found that FÁS negligently misled pension scheme trustees into buying and refurbishing a Dublin industrial unit, and set out a damages award while excluding interest for a period of delay.

Where

Places mentioned in the report

  • Shanowen Road, Santry
  • Swords
  • Dublin
  • Santry
When

Judgment:

Why

Reasons reported in the judgment

The High Court found FÁS liable for negligent misstatement after assurances about a proposed lease led trustees of a retirement benefit scheme to buy a Dublin industrial unit for Ballark Community Training Centre. The court proposed damages of €894,564, less interest attributable to the period from 1 July 2010 until the proceedings were issued.

The High Court found FÁS liable for negligent misstatement after assurances about a proposed lease led trustees of a retirement benefit scheme to buy a Dublin industrial unit for Ballark Community Training Centre. The court proposed damages of €894,564, less interest attributable to the period from 1 July 2010 until the proceedings were issued.

The dispute concerned Unit 31, Airways Industrial Estate, on Swords Road. Ballark needed new premises after its landlord declined to renew its lease at Shanowen Road, Santry. FÁS funded and supervised Ballark, which had no independent source of funding.

Billy Hayes, one of the scheme’s beneficiaries and a director of a building company, proposed buying the unit with scheme funds and leasing it to Ballark. The court found that he required a commitment from FÁS before proceeding. In September 2007, a FÁS manager wrote to Ballark that FÁS would commit to an increased rent for 20 years if Hayes bought and refurbished the unit. A second version, intended for Hayes, omitted the stated maximum annual rent of €100,000.

The court accepted Hayes’s evidence that he relied on the letter and later assurances, including a handwritten note in March 2008 stating, “Either way we will proceed with development.” The purchase was completed in August 2008 for €760,000. FÁS later advised Ballark not to enter a lease while its budget allocation remained unconfirmed, then said in June 2009 it could not fund the relocation.

FÁS argued that the letters supported continued negotiations rather than an unconditional commitment, and that the lease terms were not settled when Hayes agreed to buy. The court rejected that account, finding the September letter was a clear, uncaveated commitment and that FÁS knew it would be passed to Hayes and relied upon. It held that FÁS owed him a duty of care, breached that duty, and caused loss.

The court dismissed the case against Ballark, finding it had relied on FÁS’s assurances and had not been negligent or in breach of duty. It did not proceed to decide the alternative legitimate-expectation claim, observing that promissory estoppel might have been a more appropriate private-law remedy.

For damages, the court proposed €760,000 for the purchase price plus €78,360 in purchase costs, less the unit’s agreed April 2015 value of €145,000: €693,360. It also proposed interest on the €838,360 expended, but disallowed interest from 1 July 2010 until the proceedings were issued, because the plaintiffs had not acted sooner after FÁS clearly withdrew its support. The judgment states the proposed award as €894,564 less that excluded interest. The supplied judgment ends with this damages determination; it does not include a separate final order.

Read the original court judgment

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