The High Court declined Donatex Limited and Bernard McNamara’s application to try the alleged lack of statutory power of the Dublin Docklands Development Authority (DDDA) as a first module in their proceedings over the Irish Glass Bottle site.
In a judgment delivered on 15 April 2011, Mr Justice Clarke said the proposed division risked prejudice and was unlikely to save time and expense. He left open a narrower possibility: trying liability and the principles governing any entitlement to damages first, with the calculation of damages later. He made no order for that alternative and said he would hear counsel further if either party wished to seek it.
The plaintiffs’ proceedings allege misrepresentation and breach of warranty of authority in connection with a shareholders’ agreement relating to Beebay, a company established for the parties’ proposed acquisition of the site. The judgment describes two possible routes to liability: alleged oral assurances about the DDDA’s ability to facilitate a LUAS line and development permissions, which the DDDA denies making; and the plaintiffs’ contention that the authority lacked power to enter the agreement. The DDDA disputes that contention and said one basis for it had not been pleaded. For the application, the judge assumed that basis was properly pleaded.
The plaintiffs proposed that the first module decide whether the DDDA had capacity to enter the development arrangements and whether a lack of capacity could support their claims for damages and an indemnity. Their issue paper also raised factual questions about advice, representations and reliance. The judge noted that the proposed module would determine relevant factual disputes as well as legal questions.
The DDDA argued that deciding whether the plaintiffs relied on the agreement’s warranty could require evidence about the alleged oral assurances too. If that evidence were explored broadly, the judge said, little time would be saved by separating the issues. If explored narrowly, the DDDA faced a real risk of prejudice because evidence about the assurances could bear on the warranty issue.
The judge also considered the practical consequences if the plaintiffs won the first module and an appeal followed: the oral-representation claim might be delayed, including evidence dependent on conflicting witness recollections. If they lost, that alternative claim would still have to be tried. The court would also have to decide whether to assess damages before any appeal or wait, with difficulties either way.
The judgment therefore rejects the proposed modular trial. It does not decide whether the DDDA had power to enter the agreements or determine the underlying claims. The court’s only further indication was that questions solely about calculating damages might potentially be left over, subject to further submissions.