High Court: Brothers who alleged ‘masonic conspiracy’ in denial of default clause found liable to former partner

About this case:

• Citation:
  [2018] IEHC 702
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Peter Kelly

Finding that it was unsatisfactory that two versions of the High Court order had been placed before him, Mr Justice Peter Kelly, President of the High Court was critical of the procedure which led to the “unsatisfactory situation” of there being two versions but said that this did not “alter or affect the contractual obligations undertaken” in the agreement which he was satisfied the men had entered into.

Background

In 2003, Michael Butler and William Butler were carrying out a residential housing development in Clonmel, Co. Tipperary when they encountered cash flow problems. Under the terms of an agreement dated 30 July 2003, Crohan O’Shea and Thomas O’Driscoll agreed to become partners with the Butlers for the purpose of completing the building project, and a limited company was formed – Bosod Limited. Unfortunately, the parties fell out.

In October 2006, the Butlers and their company, Michael and Thomas Butler Ltd, brought proceedings against Mr O’Shea, Mr O’Driscoll, and Bosod ltd, seeking damages in excess of €4,500,000 together with a variety of other reliefs including injunctions restraining Messrs O’Shea and O’Driscoll from applying the proceeds of sale of the properties, other than for the purpose of discharging outstanding sums. They sought direct cash payments into Bosod Limited, and damages for breach of contract.

Notably, when the matter went before Mr Justice Brian McGovern in the High Court on circuit in Dundalk on 11 February 2008, the Butlers were fully represented by junior and senior counsel – who they have since attempted to sue in respect of the matter. At the proceedings in Dundalk, a settlement agreement (the Dundalk agreement) was entered into which stated that Mr O’Shea would transfer his shareholding in Bosod to the Butlers for consideration of €1.1million. In dispute was the inclusion of a default clause – clause 6 – which stated that, in the event of payment not being discharged on or before 11 September 2008, the Butlers would consent to a joint and several judgment against each of them for the sum outstanding.

At a later hearing before Mr Justice McGovern, it was accepted that over €650,000 was still due and owing on foot of the agreement and Mr O’Shea was granted judgment for that amount. Thereafter, Mr O’Shea’s judgment was registered against three folios, a well charging order was granted in 2010, and an order for sale was made.

In the Supreme Court, no longer professionally represented and with the assistance of McKenzie friend Ms Angela Farrell, the Butlers argued that the terms of the Dundalk agreement were altered and placed on the Central Office file with the collusion or connivance of a person or persons unknown, including court officials. The Butlers denied that the agreement they made included clause 6, that orders subsequently made were null and void, and that they were not bound by any settlement.

High Court

The present proceedings before the High Court concerned the Supreme Court’s direction that a new trial be heard on two particular issues:

1. Whether or not the parties entered into the Dundalk agreement, and that it contained the default clause 6;
2. If so, whether the Butlers were, and are, liable on foot of the agreement.

In the High Court, Mr Justice Kelly commented that the Butlers’ McKenzie friend, Ms Farrell, was struck off the roll of solicitors for professional misconduct, and that “far from being of any assistance to the court or the Butlers she was the exact opposite”. Stating that the five-day hearing which led to his judgment was “an extremely difficult one to preside over”, Mr Justice Kelly said he did not believe that Ms Farrell “…furthered the interests of justice and she did no service to the Butlers who in many instances during the hearing, through the mouth of Mr Michael Butler, simply repeated largely irrelevant material dictated to him by Ms Farrell”.

Mr Justice Kelly said that instead of confining themselves to the two issues which were directed to be tried, the Butlers “…attempted to place irrelevant and inadmissible evidence before the court and made allegations of wrongdoing, forgeries and Masonic conspiracies without the slightest evidence in support of them”.

Considering whether the Dundalk agreement was entered into, and whether it contained clause six, Mr Justice Kelly heard from, inter alia, counsel who represented the Butlers in Dundalk – Mr O’Donnell SC.

Mr Michael Butler submitted that he did not meet with his trial Solicitor at any stage during the proceedings in Dundalk on 11th February 2008, and that he did not sign any agreements on that date. Mr Justice Kelly said that Mr O’Donnell’s evidence in this regard was “crystal clear”, that his evidence was supported by contemporaneous material, and that he preferred Mr O’Donnell’s evidence over that of Mr Michael Butler “in every respect”.

Satisfied that the Dundalk agreement entered was entered into and that it contained clause 6, Mr Justice Kelly was highly critical of the “war of litigation” brought by the butlers, which he said was engaged in in an effort to evade their responsibilities to Mr O’Shea

Mr Justice Kelly was also satisfied that the Butlers were liable to Mr O’Shea on foot of the Dundalk agreement, and that the previous orders were properly made against them.

Conspiracy allegations

Mr Justice Kelly said that the Butlers’ belief of conspiracy, fraud and Masonic influence was “fuelled by an unsatisfactory situation” which arose “in relation to the court order which purported to record what went on in Dundalk”.

Mr Justice Kelly said that “two versions of the order” were placed before him, and that “clearly there should only be one order in any one case”.

In light of testimony in relation to this matter, including that of the Principal Refistrar of the High Court, Mr Justice Kelly made a number of conclusions, including that it was likely that the file was interfered with and “the procedure by which High Court files may be inspected in an unsupervised fashion and where they are open to being interfered with is completely unsatisfactory”.

Emphasising that his findings did “not alter or affect the contractual obligations undertaken by the Butlers in settling the case”, Mr Justice Kelly said that it was “essential that the integrity of High Court Central Office files be protected” and proposed to “discuss with the Chief Justice and the President of the Court of Appeal alterations in the system of inspection of High Court files so as to ensure that files are not interfered with and that they accurately record orders of the court”.

• by Seosamh Gráinséir for Irish Legal News