Anthony Sheedy v Alistair Jackson

• Jurisdiction: Ireland
• Judge: Mr. Justice Murray
• Judgment Date: 22 June 2020
• Neutral Citation: [2020] IECA 167
• Docket Number: Record No. 2019/281 CA
• Court: Court of Appeal (Ireland)
• Date: 22 June 2020

BETWEEN:

ANTHONY SHEEDY

APPELLANT

- AND -

ALASTAIR JACKSON

RESPONDENT

[2020] IECA 167

Costello J.

Power J.

Murray J.

Record No. 2019/281 CA

THE COURT OF APPEAL

CIVIL

Contract – Specific performance – Notice to rescind – Applicant seeking specific performance of contract – Whether the defendant had reasonable grounds to issue a notice to rescind

Facts: The defendant, Mr Jackson, on 7 August 2015, acting by his duly appointed receiver Mr Stapleton, entered into a contract for the sale of a property known as Whitfield Manor, Whitfield Court, Kilmeadan, County Waterford together with adjoining lands of approximately 230 acres (the property) to the plaintiff, Mr Sheedy. The contract was in the form of the Law Society of Ireland General Conditions of Sale (2009 Edition), with special conditions. The contract price was €1,375,000. The closing date provided for in the contract was to be thirty days after the date thereof. Almost exactly two years after the closing date thus fixed, the defendant served a notice purporting to enable the rescission of the contract. He thereafter acted on foot of this, confirming the rescission of the contract on 18 September 2017, and returning the deposit on 4 October 2017. The plaintiff sought specific performance of that contract, thereby challenging the legal and factual basis for this rescission. By order of 17 May 2019 Quinn J dismissed the plaintiff’s claim, the reasons for that determination being delivered in a reserved judgment of 12 April 2019 ([2019] IEHC 313). The plaintiff appealed to the Court of Appeal. The issues presented by the grounds of appeal fell into three broad categories. As presented in the plaintiff’s written submissions there were two: (a) the defendant’s capacity to perform the contract by serving a notice to rescind having regard to the appointment of a second Receiver and (b) whether the defendant had reasonable grounds to issue a notice to rescind. To these, the defendant added a third, (c), whether on the evidence the plaintiff had established that he was ready, willing and able to complete the contract and/or whether the plaintiff was precluded by general equitable principles from obtaining the relief sought by him.

Held by Murray J that the attempt to amend the statement of claim so as to plead that the Receiver could only act jointly with the second Receiver was correctly rejected. Murray J held that the point was, in any event, without merit. Murray J noted that the parties had agreed to the deletion from the contract of an obligation to deliver vacant possession. Murray J held that it follows that the defendant was entitled to serve the third rescission notice if only for the purposes of requiring the plaintiff to withdraw his demand that vacant possession be delivered. Murray J noted that the plaintiff had identified no other basis on which it could be held that the trial Judge erred in determining that the defendant acted reasonably in so doing. Murray J held that the issues raised by the defendant as to the plaintiff’s ability to complete the sale and whether his conduct was such as to preclude him from obtaining discretionary relief, did not accordingly arise.

Murray J proposed an order dismissing the appellant’s appeal. It was the preliminary view of the Court that it should order that costs follow the event and leave in place the order as to costs made by the High Court Judge.

Appeal dismissed.

JUDGMENT of Mr. Justice Murray delivered on the 22 ^nd day of June 2020

Background

1 These proceedings concern a property known as Whitfield Manor, Whitfield Court, Kilmeadan, County Waterford together with adjoining lands of approximately 230 acres (‘the property’). On 7 August 2015 the defendant (acting by his duly appointed receiver Mr. Peter Stapleton) entered into a contract for its sale to the plaintiff. The contract was in the form of the Law Society of Ireland General Conditions of Sale (2009 Edition), with special conditions. The contract price was €1,375.000. The closing date provided for in the contract was to be thirty days after the date thereof. Almost exactly two years after the closing date thus fixed, the defendant served a notice purporting to enable the rescission of the contract. He thereafter acted on foot of this, confirming the rescission of the contract on 18 September 2017, and returning the deposit on 4 October 2017. In these proceedings the plaintiff seeks specific performance of that contract, thereby challenging the legal and factual basis for this rescission. By order of 17 May 2019 Quinn J. dismissed the plaintiff's claim, the reasons for that determination being delivered in a reserved judgment of 12 April 2019 ( [2019] IEHC 313).

2 The sale arose in a context where the defendant had, in March 2005, mortgaged the property to Irish Nationwide Building Society (‘INBS’), the underlying loan and security being thereafter acquired by National Asset Loan Management Limited (‘NALM’). On 6 February 2012 the National Asset Managment Agency appointed Peter Stapleton of Lisney as statutory receiver of the property pursuant to s.147 of the National Assets Management Agency Act 2010. In June 2014 Promontoria Eagle Limited (‘PEL’) acquired the loan and security from NALM. It also appointed Mr. Stapelton as receiver by deed of appointment dated 21 May 2015. On 11 January 2017, PEL appointed Ken Fennell as receiver of that part of the assets originally mortgaged by the plaintiff comprising unregistered land (the property being composed of one parcel of unregistered land and two folios of registered land). The appointment of Mr. Stapleton was not discharged. Throughout this judgment I shall refer to Mr. Stapleton as ‘the Receiver’ and to Mr. Fennell as ‘the second Receiver’.

3 At the time of the negotiations leading to the execution of the contract concerns were expressed in a letter from the plaintiff's solicitors of July 8 2015 in relation to the quality of the maps furnished with the contract of sale and in respect of two areas of the estate being sold which were in occupation by two different third parties. The plaintiff's solicitors also noted that maps of another part of the property referred to a right of way which appeared to have been blocked off by another party. In response, the Receiver's solicitors by letter dated 30 July 2015 declined to undertake any obligations with regard thereto. They quoted the provisions of the draft contract circulated which required the plaintiff to satisfy himself in relation to all matters pertaining to the identity of the property, including its boundaries and confirmed that the vendor gave no warranty and made no representations as to the coincidence of the actual boundaries in the vicinity of the property and the boundaries of the property shown on the title furnished, or as to encroachments made by third parties on the subject property.

4 From the date of signing of the contract, the parties' representatives engaged in a significant volume of correspondence directed to inter alia the mapping and identification of the property and encroachments thereon, and including the raising of objections and requisitions on title (3 September 2015). replies thereto (3 and 7 September 2015), a completion notice (12 November 2015), three notices requiring the withdrawal of objections and requisitions (13 November 2016, 13 June 2017 and 7 September 2017) and two meetings (held on 20 December 2016 and 23 February 2017).

5 The notice delivered by the defendant's solicitors to the plaintiff's solicitors dated 7 September 2017 purported to treat the contract for sale as rescinded after the expiry of five working days from the date of that letter unless the plaintiff withdrew certain requisitions and objections. That notice was served pursuant to General Condition 18 of the contract of sale. I will refer to it throughout as the third rescission notice (the two earlier such notices having been withdrawn by the defendant). Essentially, the notice required the plaintiff to withdraw his insistence on the defendant giving vacant possession, removing encroachments and defining the boundaries of the property. As I have noted, on 4 October 2017 and acting on foot of that notice and on the basis that the requisitions in question had not been withdrawn, the defendant's solicitors returned the deposit paid in respect of the contract. On 20 October 2017, these proceedings (the summons in which was issued on 31 July 2017) were served on the solicitors for the defendant.

6 The contention underlying the plaintiff's claim for specific performance as opened to the High Court – that the third General Condition 18 notice was unreasonable – was based on four principal grounds. First, it was said that the plaintiff had not made objections and requisitions on title justifying service of such a notice. Second, it was contended that the plaintiff enjoyed a contractual requirement for vacant possession which he had not waived. Third, it was said that the defendant had been unable to give vacant possession in respect of approximately 50 acres encroached upon by third parties. Fourth, it was contended that the defendant had agreed to address the appellant's objections to completion and had failed to do so, thereby disentitling him from serving the third rescission notice.

7 The trial proceeded over six days in October and November 2018. On the fifth day of the hearing the plaintiff applied to introduce a new feature into his claim arising from the appointment of the second Receiver. The contention sought to be advanced in an amended pleading the subject of an application on that day was three fold – (a) that the appointment of Mr. Fennell was a repudiatory breach of contract, (b) that the third General Condition 18 notice had no effect as Mr. Fennell was not a party to it and (c) that the appointment of Mr. Fennell was a frustrating event which had the effect of ...