Brothers’ appeal against €1.1m settlement to get fresh hearing

Brothers claim agreement to pay former building partner is void due to illegality


The Supreme Court has directed a fresh hearing of claims a settlement agreement, under which two brothers allegedly agreed to pay some €1.1 million arising from the collapse of a building partnership, is unenforceable due to alleged illegality.

The three-judge court also queried whether a struck-off solicitor was an “appropriate” person to assist Michael and William Butler as a “McKenzie friend” in their appeal.

Mr Justice John MacMenamin raised the matter when allowing the appeal to the extent of directing a new High Court hearing on whether they are liable under the 2008 settlement.

The brothers, who are personal litigants, were assisted during the appeal by a McKenzie friend, Angela Farrell, formerly practising at North Great George’s Street, Dublin, who was struck off the Roll of Solicitors in 2014 for professional misconduct.

Mr Justice MacMenamin said the function of a McKenzie friend is to further the interests of justice, but the procedure in this appeal “regrettably” went “far beyond what would, or should, be permitted in a court of law”.

When the court asked the brothers questions, Ms Farrell interrupted or sought to prompt them, and the court was “consistently troubled” by the brothers’ failure to “address themselves directly” to the issues. This was “entirely unsatisfactory” and repetition of it would “not be permitted”.

While he was not saying the conduct obstructed the administration of justice, the courts were entitled to “draw a line” concerning how litigation is conducted.

2003 agreement

The case arises from a July 2003 agreement entered into by Michael Butler, Old Spa Road, Clonmel, Co Tipperary and William Butler, Ballytarsna, Cashel, when carrying out a housing development at Airmount, Cashel Road, Clonmel.

Crohan O’Shea, Marino Avenue West, Killiney, Co Dublin, and another man, Thomas O’Driscoll, agreed to become partners with them concerning completion of the project, and a company, Bosod Ltd, was formed.

The parties later fell out and the Butlers and their company, Michael and Thomas Butler Ltd, sued Mr O’Shea and Mr O’Driscoll for some €4.5 million on grounds including alleged breach of contract. They alleged Bosod was not put in funds to defray liabilities.

The claims were denied, the defendants counterclaimed for alleged breach of the partnership agreement, and the case was sent for hearing before the High Court in Dundalk in 2008, where the Butlers were legally represented.

The core claim in their Supreme Court appeal was they were pressurised to enter a settlement of the case on February 11th, 2008. Their Supreme Court appeal concerned an alleged binding settlement to pay Mr O’Shea some €1.1 millin by September 2008. Some €446,168 was paid and Mr O’Shea later got judgment against them for the alleged outstanding sum, €653,832.

Mr Justice MacMenamin said the Butlers contended there never was a binding agreement, it was void for illegality, and, as a result of an alleged conspiracy, a forged document or documents were placed on the court files. Their claims of conspiracy by court officials were denied.

Divergences in court orders

The Courts Service also said potential for improper interference with a court file could not be discounted because, in 2008, parties and their solicitors had access on request to the relevant files in their cases. It was alleged on behalf of Mr O’Shea the only logical explanation for divergences in the court orders was that Mr Butler, or someone acting on his behalf, placed a forgery on the court file before that was inspected in 2010.

It was also alleged both brothers had adduced fraudulent documents before the High Court in February 2013. Mr O’Shea also complained none of 28 costs orders obtained against the brothers following many applications had been paid.

Many applications were baseless including one arguing a particular judge could not hear it because she was a woman, he claimed.

Mr Justice MacMenamin said an investigation into the claims against Courts Service officials had established divergences in the court orders made in the case. However, the relevant issue in the appeal was whether the February 2008 settlement included a default clause.

Because of the “stark conflict” of sworn evidence on that issue, he would direct a new High Court trial on whether the settlement contained a default clause under which the Butlers are liable. That would involve the High Court considering whether documents on the court file were altered and he recommended all the parties be “fully legally represented”.