High Court: Summary judgment granted against defendant despite counterclaim for damages



Killian Flood BL
Killian Flood BL

The High Court has granted summary judgment summary judgment against a defendant despite the defendant asserting a counterclaim for damages for breach of contract. The court described the defendant’s claim as “simply too vague” to stay the judgment and ordered that the defendant pay €125,600 including interest to the plaintiff.

The defendant argued that it would be unfair to grant summary judgment against him when he would have been entitled to set off the monies against the damages he could receive in his counterclaim. However, the court disagreed, stating that it was not possible to assess the value of the defendant’s counterclaim.

Background

The plaintiff, Lakeland Agri Limited, had two contracts with the defendant, Mr Aidan Hand. Under the first contract, the defendant bought agricultural products from the plaintiff as a customer. Mr Hand was required to pay for the products within one month of purchasing the goods.

The second contract was for haulage services provided by the defendant to the plaintiff. The defendant owned a number of trucks and had been involved in transporting the plaintiff’s goods for years. It was agreed between the parties that the costs of the defendant’s purchases from the plaintiff would be offset in part by the haulage services. This haulage agreement was terminated by the plaintiff in August 2018.

The plaintiff issued summary proceedings against the defendant alleging that there was €125,676.38 outstanding on the defendant’s account. While the Mr Hand did not dispute that the amount was due to the plaintiff in principle, he argued that the termination of the haulage agreement gave rise to a claim in damages. The defendant said that the agreement was a “serious commercial contract between the parties,” and invoiced up to €220,000 for his services.

The terms of the haulage agreement were heavily disputed by plaintiff, who said that the contract was a casual arrangement which could have ended at any time and which did not impose any obligation to give the haulage work to the defendant. It was also pointed out that the defendant had sent a message to the plaintiff confirming the withdrawal of haulage services in 2018. The defendant claimed this was only supposed to be a temporary suspension of the contract and was dependent on the outcome of a criminal investigation by Gardaí. The defendant claimed that he was told to pay money personally to an individual in the plaintiff’s company if he wanted to keep receiving work. Again, this was denied by the plaintiff.

High Court

Mr Justice Garrett Simons rejected the defendant’s submissions that summary judgment should be stayed in order to allow him to pursue his claim for damages. The court considered the test identified in Moohan v. S. & R. Motors (Donegal) Ltd v. Bradley Construction [2007] IEHC 435, which says that 1) a court must be satisfied that the cross-claim provides a set-off in equity; 2) if there is a prima facie set-off claim established, it will amount to a defence and liberty should be granted to defend the entire proceedings; and 3) if the cross-claim is an independent claim, judgment should be entered against the defendant and the court will have a discretion to stay the proceedings or allow execution of the judgment.

Mr Hand said that his claim amounted to an independent claim for unliquidated damages and argued that the court should stay the proceedings under the third limb of the Moohan test. In considering his discretion to stay the proceedings, Mr Justice Simons referred to Prendergast v. Biddle (unreported, 31 July 1957), which said that a court should take into account the apparent strength of the counterclaim and the defence, the conduct of the parties and the nature of the claim itself.

Applying the case law to the case, Mr Justice Simons concluded that the defendant’s cross-claim was vague and that no attempt had been made by the defendant to quantify the alleged losses which he was seeking to set off against the debt. The court said that the defendant had also failed to address the court on the notice period for terminating the impugned agreement, which was “crucial” to the proceedings. In the absence of this information, it was simply not possible “to even attempt to put a value on the counterclaim.”

The court also pointed out that it appeared the defendant’s proceedings would be delayed to allow the Gardaí to conduct a criminal investigation. The very fact that the defendant envisaged that the determination of his claim would be delayed was further reason to allow the plaintiff to enter and execute judgment now, the court said.

Conclusion

Accordingly, the court refused to stay the proceedings to allow the cross-claim to be litigated and granted summary judgment plus interest to the plaintiff against the defendant.

© Irish Legal News Ltd 2021



Other judgments by Mr Justice Garrett Simons