Jackie Greene Construction Ltd v Irish Nationwide Building Society [2019] IESC 2 (24 January 2019)

Jackie Greene Construction Ltd v Irish Nationwide Building Society [2019] IESC 2 (24 January 2019)

The Supreme Court held that the compromise agreement bound Jackie Greene Construction to procure that IBRC received its share of the profit as determined by the expert, regardless of whether the actual profits realised from the development matched the expert's estimation. The agreement contemplated that there could be winners and losers depending on the ultimate outcome, and the expert's determination was intended to be final and binding. However, the High Court erred in granting judgment for the full sum; instead, orders should be made for the release of funds and declaratory relief regarding the balance, reflecting the payment mechanism in the agreement.

Citation
[2019] IESC 2
Parties
Plaintiff/appellant: Jackie Greene Construction Ltd; Defendant/respondent: Irish Bank Resolution Corporation in special liquidation
Jurisdiction
Ireland
Judgment Date
24 January 2019
Procedural Posture
Civil Appeal / Supreme Court Judgment on Appeal From High Court
Outcome
Appeal dismissed in substance; High Court interpretation upheld but form of order to be revised
Legal Topics
Interpretation of Settlement Agreements, Expert Determination, Profit Sharing Arrangements, Enforcement of Contractual Obligations
Contract Law Banking Law Interpretation of Settlement Agreements Expert Determination Profit Sharing Arrangements Enforcement of Contractual Obligations

Case Brief

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Parties

Jackie Greene Construction Ltd

Plaintiff/appellant

Irish Bank Resolution Corporation in special liquidation

Defendant/respondent

Procedural Posture

Civil Appeal / Supreme Court Judgment on Appeal From High Court

Legal Issues

  1. 1 Proper interpretation of a settlement agreement involving expert determination of profit
  2. 2 Whether the parties are bound to the expert's profit determination even if actual profits differ
  3. 3 Entitlement to payment in the event of a shortfall in realised profits compared to expert's determination

Ratio Decidendi

The Supreme Court held that the compromise agreement bound Jackie Greene Construction to procure that IBRC received its share of the profit as determined by the expert, regardless of whether the actual profits realised from the development matched the expert's estimation. The agreement contemplated that there could be winners and losers depending on the ultimate outcome, and the expert's determination was intended to be final and binding. However, the High Court erred in granting judgment for the full sum; instead, orders should be made for the release of funds and declaratory relief regarding the balance, reflecting the payment mechanism in the agreement.

Court Disposition

Appeal dismissed in substance; High Court interpretation upheld but form of order to be revised

Orders

  • Release of monies held by IBRC to be made to IBRC with interest accrued since 4 February 2011
  • Declaratory order that Jackie Greene Construction is obliged to make up the shortfall between released funds and 50% of the profit as determined by the expert