The Court of Appeal has ruled that Thomas and Catherine Flannery are not personally liable for damages and costs awarded in Margaret Brennan’s house-defect case, because the building agreement was with their company, T and C Developments Limited.
The ruling answered a preliminary question directed by the appeal court in November 2014: whether the two individuals were personally liable for the High Court award made on 15 May 2013. The court did not determine the remaining issues in the appeal in this judgment.
Brennan entered into two agreements in November 1999. She agreed to buy a site from Mr and Mrs Flannery for £5,000. Separately, she entered into a building agreement with T and C Developments, which was to build a house for £80,000. She later sued, contending that the house was defective.
The High Court found the house defective and awarded almost €90,000 against the company and the two Flannerys. The Court of Appeal noted that the order had been made without a written judgment explaining the basis for imposing liability on all three defendants. The trial judge’s oral explanation was a single sentence granting a decree against them all.
Delivering the ex tempore judgment, Mr Justice Kelly said the evidence and documents showed separate land-sale and building agreements. The building agreement was with the company, and the defects arose from the company’s failures. The Flannerys’ contractual connection with Brennan concerned only the land sale.
The court said a company is a separate legal person from its shareholders and directors. It concluded that any remedy for the defective building lay against the company, not the Flannerys personally. Mr Justice Irvine agreed, saying there was no evidence from which the trial judge could have found the individuals liable for the damages. Mr Justice Mahon also agreed.
The court answered the preliminary question in the negative: the Flannerys were not personally liable for the damages and costs awarded on 15 May 2013. The judgment records no further order on the other appeal issues.