The High Court has allowed a group of property companies to amend parts of their claims as a linked trial began, while limiting a proposed secret profit allegation and dismissing the group’s original fraud claim against First Active.
In a judgment delivered on 20 May 2008, Mr Justice Clarke considered amendments sought by the Cunningham Group after the case opening. The court was deciding what claims could proceed to evidence; it did not determine the underlying disputes about the property sales or the revised fraud allegation.
The group had sought amendments concerning sales at Finglas and Bailey Point. The court allowed the Finglas amendment for damages or an account, but refused wording that would seek rescission of the completed sale because the purchaser was not a party and had not had an opportunity to be heard. It also permitted an amendment alleging that Bailey Point was sold at an undervalue, subject to removal of any link to the disputed secret profit allegation and filing an amended statement of claim.
The proposed secret profit amendment concerned a possible profit share on the sale of the partly completed Bailey Point development to Bernard Duffy. The judge said the claim against receiver Ray Jackson and Duffy was unsustainable on the available documents and refused to allow it against them. He allowed a narrower claim against First Active only: that the bank may have intended to receive, for its own benefit as lender, proceeds from a profit share on the back site. The judge said that limited allegation was not bound to fail at this stage. He excluded from the case an allegation that an undocumented arrangement was ultimately made, finding it had no supporting evidence.
The court also found that the fraud case presented at the opening differed from the existing pleading. The pleaded case alleged that First Active had no intention of lending further money. The case opened instead alleged that the bank represented it would fund completion of Bailey Point and Malahide while retaining discretion to refuse later advances. The court dismissed the original fraud claim, which the group was no longer pursuing and which the judge found unsupported by the available evidence.
The judge allowed the group to plead the revised fraud claim, with some reluctance, because he could not conclude it was bound to fail before evidence was heard. The ruling was not a finding that First Active committed fraud. The amendment was conditional on a revised statement of claim specifying alleged consequences and relief. First Active was also to have an opportunity to file additional or revised witness statements and submissions. The judge reserved consideration of whether the revised claim had a case to answer until the group’s evidence had been heard.