The Court of Appeal has dismissed an appeal by Altomoravia Holdings Limited and four individual defendants over a failed settlement concerning a proposed lease of The Pod nightclub premises on Harcourt Street, Dublin.
The judgment, delivered by Mr Justice Michael Peart on 12 May 2017, upheld the High Court’s decision to award John Reynolds substantial damages in lieu of specific performance. The Court of Appeal did not order the lease to be completed. It concluded that the trial judge had credible evidence for finding that the defendants, rather than Reynolds, were responsible for the failure to implement the settlement.
The dispute followed a 5 March 2014 High Court settlement of earlier proceedings. Under its terms, Reynolds was to consent to specific performance of an agreement for lease, execute a lease by 26 March, receive €185,000, and withdraw a planning appeal. Completion did not take place by the agreed date. Reynolds began fresh proceedings on 24 April 2014 seeking enforcement of the settlement, but later elected to seek rescission and damages instead.
The parties blamed each other for the delay. The trial judge found that the defendants raised new conditions concerning water damage and other matters that were not included in the settlement, and that the required guarantee from one intended guarantor remained outstanding. The Court of Appeal noted that the guarantor sought legal advice about the guarantee and would not sign a new one without an indemnity from the other guarantors. That indemnity was not provided until early August. The defendants’ solicitor confirmed on 14 August that the documents had been executed, but the funds were still not enclosed. Reynolds’s solicitor maintained that his client would proceed with damages, as stated on 31 July, and returned the documents.
The defendants argued that text messages between Reynolds and the guarantor showed Reynolds had tried to prevent the guarantee being signed. The Court of Appeal acknowledged that one message contained a fabrication: Reynolds admitted he had falsely claimed to have discussed the guarantee with senior counsel. But the court said the messages did not overturn the trial judge’s findings. The guarantor’s own solicitor had advised him about the potential liability, and the guarantor accepted in evidence that Reynolds had neither asked him to sign nor told him not to sign.
The appeal court also rejected the defendants’ argument that an indemnity Reynolds gave the guarantor on 30 July showed an effort to obstruct completion. It considered the document an assurance that could encourage him to sign, rather than evidence of a plan to stop the transaction. The appeal was dismissed.