The High Court has allowed a UK registered company to amend its statement of claim to extend allegations of fraudulent misrepresentation and deceit to valuers involved in a loan secured on a Cork site used as an illegal landfill.
Mr Justice Richard Humphreys ruled on 16 June 2020 that the proposed amendments could proceed once the grammar and structure of paragraph 40 were corrected. He said the factual basis was sufficient for the purpose of allowing the amendment, while stressing that whether the allegations would be borne out at trial was a separate question. The court was to hear from the parties about the timetable and consequential directions.
The case concerns a site at Weir Island, Barryscourt, Carrigtwohill, Co Cork. Cork County Council brought civil waste management proceedings in 2003 over an illegal dump there. In separate criminal proceedings, Louis J. O’Regan pleaded guilty in 2005 to a waste management offence in his capacity as secretary of a company involved in the civil action and was fined €100,000.
A 2005 High Court judgment directed the respondents in the waste case to commission a site investigation and report. The judgment recorded estimates of 100,000 to 200,000 tonnes of waste at the site. In 2007, two valuers later sued in this case issued a valuation of €1.3 million. The plaintiff says it relied on that valuation in extending loan facilities totalling £900,000 to O’Regan, secured on the site. After he defaulted in 2011, the plaintiff said it discovered the land was effectively worthless and extensively polluted. The judgment records Cork County Council’s estimate of clean-up costs at about €42 million.
The plaintiff’s 2015 proceedings name former solicitors and valuers as defendants. In an earlier procedural decision, Quinn J. struck out a paragraph in the plaintiff’s reply alleging, among other things, a breach of duty not to earn a secret profit or commission, but gave the plaintiff liberty to apply to amend its statement of claim. The current application did not seek to restore that allegation. It sought to extend the fraud and deceit claim, previously directed only at the solicitor defendants, to all defendants, including the valuers.
The valuers opposed the amendment, arguing that the claim lacked adequate evidence. Justice Humphreys said the existing pleading already alleged deliberate misstatement of value and deliberate withholding of information, and found that the amendment met the tests of arguability, explanation and absence of irremediable prejudice. He relied in part on evidence about what the valuers did and knew for the limited purpose of deciding whether the claim could be pleaded. The ruling decides no ultimate liability or fraud finding.