The Supreme Court has reduced exemplary damages awarded against Crofter Properties Ltd in a long-running dispute involving false allegations concerning Sachs Hotel.
The case arose from anonymous telephone calls to an English police force. The false information alleged that Philip Smyth and his brother, Chief Superintendent Paul Smyth, were helping the IRA launder drug money through Sachs Hotel. Earlier findings established that the calls were made by Caroline Devine, a secretary and director of Crofter Properties, on behalf of and for the benefit of the company.
The High Court had awarded Genport Limited, the tenant of Sachs Hotel, IR£50,000 in general damages and IR£250,000 in exemplary damages. It found that the allegations were deliberately made to damage Genport and gain a commercial advantage.
On appeal, the Supreme Court upheld the IR£50,000 general damages award. Ms Justice Denham held that the limited publication of the allegations did not make the award excessive. The information had been given to police officers and was expected to reach Gardaí in Ireland. Parts of it were in fact investigated and found to be without foundation.
The court took a different view of the exemplary damages. While accepting that such damages were justified, it held that IR£250,000 was disproportionate. Relevant factors included the fact that Genport was a company rather than an individual, the limited scale of publication and the absence of direct evidence of actual financial loss.
The exemplary award was reduced to IR£100,000, producing total damages of IR£150,000.
That reduction also changed the interest calculation arising from earlier orders. Genport was entitled to recoup interest on IR£150,000 at 8% per year from April 23, 1996, rather than on IR£300,000.
The Supreme Court did not disturb the High Court's decision refusing Crofter Properties its costs.