The High Court has ruled that Mount Kennett Investment Company and Greenband Investments may pursue a claim for damages over delay in completing a property sale contract, finding that the claim had been deferred at an earlier trial rather than abandoned or rejected.
In a judgment delivered on 1 June 2010, Mr Justice Clarke held that allowing the claim to proceed would not amount to an abuse of process. The ruling resolves a preliminary issue only: the damages claim is to be determined on its merits at a later trial.
The dispute follows an earlier order for specific performance in Mount Kennett’s favour. The order required the defendants, described in the judgment as the “Owners”, to complete the sale by 31 March 2008. They did not comply. Mount Kennett later obtained permission to re-enter the proceedings to seek an assessment of damages, and Greenband was joined because it alleged consequential losses.
The damages claim included losses said to arise from delay in completing the original contract, as well as losses said to result from failure to comply with the specific-performance order. The second defendant, Anthony J. Fitzpatrick, supported by the other defendants, argued that the delay claim could no longer be pursued because it had been before the earlier trial judge but was not included in that judge’s order.
Clarke heard evidence from lawyers who had appeared at the earlier trial before Smyth J. He concluded that Smyth J. had accepted a proposal to split the trial: the entitlement to specific performance would be decided first, with all questions of damages, including delay damages, postponed. The written order did not record that deferral. Clarke said Mount Kennett should have ensured that it did, but found the omission did not make it abusive to pursue a claim the earlier judge intended to leave for a later hearing.
The court therefore found no abuse of process that would bar the claim and directed that the damages issue proceed. It did not determine whether Mount Kennett or Greenband is entitled to damages, how much any damages might be, or the merits of the delay claim. It also found it unnecessary to decide whether the defendants’ procedural conduct or the absence of a pleaded defence affected the issue.