EDEN (NI) Limited and Mallaghan Engineering Limited v Mills Selig, A Firm
| Jurisdiction | Northern Ireland |
| Judge | Deeny J |
| Judgment Date | 22 August 2016 |
| Neutral Citation | [2016] NIQB 71 |
| Court | Queen's Bench Division (Northern Ireland) |
| Date | 22 August 2016 |
1
Neutral Citation: [2016] NIQB 71 Ref:
DEE9993
Judgment: approved by the Court for handing down
Delivered:
22/08/2016
(subject to editorial corrections)*
IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND
________
QUEEN’S BENCH DIVISION
_______
2012 No. 139129
BETWEEN:
EDEN (NI) LIMITED
AND
MALLAGHAN ENGINEERING LIMITED
Plaintiffs;
-and-
MILLS SELIG, A FIRM
Defendant.
________
DEENY J
Introduction
[1] These proceedings were brought by the plaintiffs against their former
solicitors seeking damages for breach of contract, negligence and breach of fiduciary
duty on the part of the solicitors in and about the conveyance of lands in 2007. This
judgment deals with the factual issues between the parties, the extent of the duty of
a solicitor to disclose information to a client with regard to a previous sale of the
property and the consequences, on the facts, if any breach of duty is established.
[2] The action was heard before me over five days. Mr Mark Orr QC appeared
with Mr Mark McEwen for the plaintiffs. Mr Nicholas Hanna QC appeared with Mr
Bernard Brady for the defendant. I am grateful to counsel for their able and succinct
written and oral arguments. These have been taken into account even if not
expressly referred to in this judgment. I informed the parties that the Defendant
firm, and on one occasion, at least, Mr Bill McCann, had instructed me as counsel
prior to 2004 but both parties requested that I hear and decide the action.
2
The Plaintiff’s Case
[3] The two plaintiff companies are both subsidiaries of Mallaghan Holdings
Limited (Holdings). That is the present corporate form of a business started by the
father of Mr Ronan Mallaghan (Ronan) and Mr Niall Mallaghan, who are Directors
of the second plaintiff. Ronan holds 94% of the shares in Holdings. It has been a
successful business based in Dungannon. It involves the design and manufacturer of
ground support equipment such as catering trucks and stairs for airports – “metal
bashing” as Mr Ronan Mallaghan modestly put it. Prior to 2007 the defendant firm
was instructed to assist in a corporate reconstruction of this business. The first
plaintiff, Eden, was set up, the court was told, with a view to a possible development
of the property around the plaintiff’s factory at Dungannon, in conjunction with
neighbouring lands. It had no assets. The second plaintiff was the operating
company of the aircraft support business and had substantial assets.
[4] It is common case, and within the knowledge of the court, that there was an
enthusiastic and, indeed, heated property market in Northern Ireland in the years
leading up to and including the first half of 2007. The Mallaghans appear to have
been inspired by this rising property market to seek to acquire property for resale.
[5] The Mallaghans met with a Mr Martin McWilliams who represented himself,
they said, as the owner of lands at Seskinore, County Tyrone. These were some 8.4
acres in extent on either side of a road within the development limit of that hamlet.
The land was some subsequently conveyed as Folio No. TY 81111, County Tyrone.
They agreed to buy the same for £5,375,000.
[6] The plaintiffs’ case is that they were “persuaded to purchase” these lands, at
least in part, because when they put the proposal to Mr William (Bill) McCann of
Mills Selig he told them it was a “good deal”. In fact this proved not to be the case
as I will outline and they sue his former firm for their loss and damage.
[7] The second head of claim is based on an omission. In 2007 Mr McCann, in his
capacity as the conveyancing solicitor to the plaintiffs, sent them a report on title.
He had been sent the title documents by letter dated 18 January 2007 from the
vendors’ solicitors, Messrs Tughans. These documents included the last transaction
with regard to the land, namely a transfer from Hugh Francis Grugan and Charles
Columba Grugan to Freughmore Developments Limited (Freughmore). This was on
15 December 2006 and was in the sum of £3,300,000. The plaintiffs contend that they
would never have agreed to purchase the lands for £5,400,000 if their solicitor had
told them of this recent transaction at a much lower figure. It is, in effect, common
case that he did not tell them of the transaction but what is in dispute is whether that
amounted to a breach of his legal duty and, if so, whether it would in fact have
deterred the Mallaghans from proceeding with the purchase of the lands.
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