The High Court ordered specific performance of an agreement for a €6 million settlement of secured liabilities and awarded Declan O’Mahony €20,000 in exemplary damages. Mr Justice Haughton also declared invalid a notice terminating an earlier settlement agreement and dismissed a counterclaim against Diamond Developments Limited.
The plaintiffs’ case concerned an agreement they said was made on 20 June 2017 with Promontoria (GEM) DAC. They sought release of outstanding liabilities and security over four development properties. Promontoria denied that a binding agreement had been reached and argued that the plaintiffs were not ready, able and willing to complete.
After the plaintiffs closed their evidence, Promontoria sought dismissal without calling its witnesses. The judge decided the application on the balance of probabilities, treating discovered documents as evidence of their contents under an agreed procedure. He said the absence of defence evidence allowed him to draw appropriate inferences, but that such inferences had to be approached cautiously.
The judge found that Promontoria had authorised its agent, Capita, to communicate approval of a €6 million loan sale, with payment by 31 August 2017. He ruled that the 20 June email set out a binding agreement. A 10 per cent deposit was part of the agreement, but the parties later agreed to reduce it to €60,000. He found that the subsequent change from a loan sale deed to a settlement and release deed changed the conveyancing method, not the substance of the bargain.
Promontoria said the plaintiffs could not show they had funding or had met closing requirements. The judge accepted evidence from Michael O’Flynn and the plaintiffs’ solicitor that funding and routine closing documents could have been put in place. He found that Promontoria’s repudiation, communicated on 23 August, prevented completion and was wrongful.
The order requires specific performance on the basis of the most refined draft settlement deed prepared before the repudiation, subject to further agreed refinement. It substitutes the €60,000 deposit and settlement deed for the original deposit and loan-sale mechanism. The judge said he would hear counsel on the time allowed to finalise the deed, exchange and close.
Promontoria had also terminated the 2014 settlement, alleging the plaintiffs refused to cooperate in sales and had brought proceedings. The judge found the notice invalid: the June agreement suspended cooperation obligations pending completion, and the proceedings did not justify termination.
On exemplary damages, the judge found that Promontoria abandoned the deal after learning of a possible higher-value off-market offer, and criticised its decision not to call witnesses after challenging O’Mahony’s honesty in cross-examination. He awarded €20,000 to O’Mahony to mark the court’s disapproval. The counterclaim against Diamond Developments was dismissed.