The High Court has struck out Thomas Tougher’s claims to ownership of land held by Tougher’s Oil Distributors Ltd and ordered the removal of a lis pendens registered against the properties. It left his claims for damages for breach of contract, negligence and breach of duty in place, expressing no view on their merits.
Mr Justice Cregan delivered the ruling on 15 May 2014, on an application by the company to strike out the proceedings and vacate the lis pendens. The case concerned Mr Tougher’s plenary summons, issued on 7 November 2013, which sought declarations of legal or beneficial ownership over land in 12 folios, orders restricting dealings with the properties, and other relief.
Mr Tougher said he had a binding agreement with the company’s second defendant, John O’Regan. He described terms including a future shareholding and roles with the restructured company, as well as payments. He said he registered the lis pendens because he feared the company’s assets could be stripped and any eventual judgment left unsatisfied. These were his claims; the court did not decide whether the alleged agreement was made or breached.
The company argued that Mr Tougher’s contract claim, even if successful, could not give him a direct proprietary interest in company assets. The judge agreed on that point: a shareholder does not, by virtue of share ownership, own any part of the company’s assets. He found the claims to the land unsustainable and struck out the requests for declarations and orders concerning the folios, identified in the summons as paragraphs A, B and C. He also struck out the words “in addition to or in lieu of specific performance” from the claim for damages.
The judge held that Mr Tougher’s claim for damages for breach of contract, negligence and breach of duty was stateable and not bound to fail. Whether it succeeds can only be decided at trial. The ruling did not determine that claim or make findings on the alleged contract’s merits.
Because the claims relating to the company’s land had been struck out, the judge treated those matters as determined for the purpose of section 123 of the Land and Conveyancing Law Reform Act 2009. He ordered the lis pendens vacated from the lands listed in the plenary summons and the company’s notice of motion.