Anne B. Courtney v Therese McCarthy
THE SUPREME COURT
Record No. 70/2007
Contract law - Land law - Equity - Estoppel - Contract rescinded - Extension performance contract - Contract for sale - Contractual interest - Shield not sword -Whether entitled to specific performance - Whether vendor estopped from raising defence
: The vendor instituted proceedings to establish that she had lawfully rescinded an agreement as to the sale of development land. The appellant denied recission and sought specific performance. The purchaser had attempted to avoid paying interest. The purchasers claim for specific performance arose from an alleged estoppel which was alleged to have arisen after the purported recission.
Held by the Supreme Court (Geoghegan J; Finnegan & Kearns JJ) the recission by the vendor appeared to be lawful. An estoppel had arisen. The vendor was bound by the promise made to extend the sale closing. The vendor was precluded from asserting recission as against the purchaser if the purchaser was ready and willing to perform the original contract on the date agreed. The appeal would be allowed and the specific performance relief would be granted. The negligent behaviour of the purchaser and mala fides displayed disallowed any claim for interest or damages by the parties except up to the date or original sale.
Judgment of Mr Justice Finnegan delivered on the 4th day of December 2007
Anne B. Courtney the plaintiff/respondent (hereinafter the "vendor") is the registered owner of the lands comprised in Folio 11394F in the Register of Freeholders, Co. Clare. She offered part of the lands containing 6.6 acres for sale by public auction on the 4th March 2005 and the defendant/appellant (hereinafter called "the purchaser") was the successful bidder and signed a contract in respect of the same. The matter did not proceed smoothly due to default on the part of the purchaser. There was delay in paying the deposit. In correspondence the purchaser sought to vary the conditions of the contract and she was in delay throughout. On the 22nd April 2005 a completion notice in accordance with condition 40 of the general conditions of sale was served and interest was claimed in accordance with condition 25 of the general conditions of sale. The notice to complete expired on the 20th May 2005 and after such expiry without prejudice to the notice to complete the vendor indicated a willingness to complete. However the sale did not complete and by letter dated 30th May 2005 the vendor's solicitors informed the purchaser's solicitors that the plaintiff was rescinding the contract, that the deposit was forfeited and that the lands would be re-sold. On this appeal it is accepted by the purchaser that the contract had been rescinded and the deposit forfeited.
By letter dated the 2nd June 2005 the vendor's solicitors wrote to the purchaser's solicitors as follows:
"Strictly without prejudice to our letter of the 30th May 2005 and the notices therein, we would advise that our client is prepared to complete with your client strictly subject to the following:
1. Completion must take place on or before Friday next 3rd June 2005.
2. Interest will be payable in accordance with the contract for sale.
3. The open space area may be revised as per the map as furnished by John Neilan and Associates under cover of the 6th May 2005 which was previously agreed by our client. Your client's architect will now have to mark up this map as our client had agreed previously to have her architect mark up the map only to be told that your clients had changed their minds as to the revision of the map.
4. The contract for sale provides for the access to Ballybeg Road being granted when required and our client is prepared to grant same now provided that this does not hold up completion. Please furnish draft grant of right of way together with copy map showing the route for same for approval. We would point out that the very reason that the contract for sale provided that this right of way would be granted in due course if required, is that the local authority are likely to specify the route of such access roadway and where it comes out unto Ballybeg Road. We are pointing this out to you and would suggest that you advise your client accordingly.
5. No wayleave will be considered to Jack McCarthy's land until completion has taken place. We have indicated on a number of occasions that our client is agreeable to consider same subject to sight of the proposed route of same, however, same does not form part of the contract for sale and will be considered once completion has taken place. In this regard, we have asked on a number of occasions for a map showing the route of same, but have received nothing. This can be looked into further post-completion.
6. Your client's arrangements with Jack McCarthy and Mr Fitzgibbon are of no concern or interest to our client and no monies will be paid by our client for rights to which he is entitled under the contract for sale. Special condition 12 of the contract for sale will stand.
7. A postal completion is no longer appropriate and completion must take place at this office.
We note from your letters of 26th May 2005 and 1st June 2005 that your client is prepared to complete the contract for sale which, strictly without prejudice, is also what our client wants, however, this letter and the proposals therein are strictly without prejudice to the forfeiture and rescission notice which has already been served on you.
We should be obliged if would take your client's instructions to the above, strictly without prejudice, proposal and revert by return failing which we confirm that we have authority to accept service of proceedings in this matter."
It is sufficient to say that the matters dealt with in paragraphs 3, 4, 5 and 6 represented an attempt to deal with variations to the contract sought by the purchaser. The sale did not complete by the deadline set. The vendor by letter dated 16th June 2005 indicated a willingness to complete on the 17th June 2005 but again completion did not take place.
Before describing what next happened it is necessary to identify the persons involved and their relationship to the transaction. Mr Fitzpatrick is the vendor's auctioneer. Mr Hickey is a partner in the firm of solicitors having carriage of the sale on behalf of the vendor but is also married to the vendor's daughter Anne Courtney junior who is a tax consultant by profession. Mr Fowler is a partner with Mr Hickey in the vendor's solicitors. Mr Gavin is the purchaser's solicitor. Of significance is the circumstance that Mr Hickey and Ms Courtney were on holiday in Kerry from the 28th or 29th June and returned to Dublin on the 11th July to attend an appointment in Crumlin Hospital with their daughter's consultant at 10.30 a.m. Mr Gavin was abroad until the 7th July and returned to his office on the morning of 8th July.
Mr Fitzpatrick, the auctioneer, gave evidence that throughout the course of the transaction the purchaser and Ms Courtney were in contact with him. On the 4th July 2005 he received a telephone call from Ms Courtney. She instructed him to contact the vendor with a view to closing the sale on Monday the 11th July without prejudice to "what was going on between the respective solicitors" and instructed him not to enter into correspondence. He made contact with the purchaser immediately and conveyed to her Ms Courtney's instructions to him. Ms Courtney gave evidence of the phone conversation with Mr Fitzpatrick but on her account she had asked him to arrange for a meeting for roughly 2 o'clock on the 11th July so that the parties could talk. She heard nothing back from Mr Fitzpatrick and on returning to Dublin on the 11th July she did not know
whether or not anything was to happen that day.
There was thus a conflict on the evidence as to whether the meeting was to close the sale or to talk and see if the sale could be progressed. Mr Fitzpatrick kept a note of his telephone conversation with Ms Courtney in the following terms:
"Phone call from A. C. Tell purchaser to arrange to close sale Monday next 2 p.m. in accord with contract. No correspondence. Informed Therese McCarthy."
The learned trial judge's finding on the evidence is set out by her as follows:
"There is a conflict as to what was the purpose of the meeting which was to take place at 2 p.m. on 11th July 2005. Ms Courtney's evidence was that she did not say it was to "close" the sale; it was to talk, to see if the matter could be progressed. Mr Hickey's evidence was that the meeting was to be a face to face meeting in his office to see if something could be done. Mr Fitzpatrick's evidence was that Ms Courtney asked him to contact the defendant with a view to closing the sale on Monday 11th July 2005. I am satisfied that Mr Fitzpatrick's note properly reflects what he was instructed to do, save that it does not record that he was told that the meeting was to be in the offices of the plaintiffs solicitors in Dublin. The purpose of the meeting was to close the sale. Of course, there was always a possibility that at the meeting it would not be possible to achieve consensus on some matter and that the sale would not be completed. However that possibility, in my view, does not justify the nuanced account of the offer to be conveyed by Mr Fitzpatrick given by Ms Courtney and Mr Hickey. Mr Fitzpatrick...
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