The High Court has ruled that most claims against Michael Ryan over alleged defects at the Riverwalk apartment development are bound to fail, but left open a residual negligence claim that may be considered at trial.
In a judgment delivered on 20 October 2017, Ms Justice Baker was hearing Mr Ryan’s application to strike out the proceedings against him. The application was not a trial of the alleged building defects. The judge said she could not resolve factual disputes on affidavit, and ordered that part of the claim be struck out, with counsel to be heard on how that should be done.
Fiona O’Donnell, the original purchaser and owner of apartment No. 1, is one of 26 apartment owners who brought proceedings after complaints of water ingress. The claims include alleged defects in balcony outlets and membranes, window and door seals, external drainage and walls. The proceedings primarily seek recovery of sums paid by insurers under the Premier Guarantee scheme, and also include alleged fire safety and acoustic defects.
Mr Ryan had owned the lands on which the development was built. Under a 2004 licence, he allowed developer Saltan Properties Ltd to enter and build. The apartments were sold by long leases, with Mr Ryan holding the legal reversion and common-area title pending transfer to the management company. The judge found that, under this arrangement, his interest was nominal and that he was not the developer in the true sense.
The court struck out the claims against Mr Ryan based on contract, breach of the quiet-enjoyment covenant, non-derogation from grant, trust and negligence arising from ownership or a beneficial right to possession. The judge found that the sale and building agreements were between Ms O’Donnell and Saltan, and that the lease placed common-area maintenance duties on Saltan and the management company. She also rejected Mr Ryan’s argument that he was entitled to indemnity under the Guarantee and could not therefore face the insurers’ recovery action.
However, Ms Justice Baker said evidence about alleged acts by Mr Ryan—including permissions for works in common areas and a roof inspection—raised a factual dispute about whether he exercised some degree of control. Mr Ryan disputed aspects of that account and said he had handed over possession and control. The judge said the alleged acts might leave open a claim in negligence based on control he assumed, whether as a director and shareholder of Saltan or otherwise. She did not decide whether that residual claim would succeed.