Black v Grealy

• Jurisdiction: Ireland
• Court: High Court
• Judge: Costello J.
• Judgment Date: 10 November 1977
• Neutral Citation: 1975 WJSC-HC 145
• Docket Number: No. 4004 P/1977
• Date: 10 November 1977

1975 WJSC-HC 145

THE HIGH COURT

No. 4004 P/1977

BLACK v. GREALY

BETWEEN:

NATHANIEL BLACK

Plaintiff

and

CELINE GREALY

Defendant

1 Costello J. - Judgment delivered the 10th day of November 1977 .

2 The plaintiff is a business-man with substantial business interests in Dublin as well as in Northern Ireland. His solicitor in Dublin was Mr. Finnegan, a partner in the firm of Colgan, Finnegan and Co. Prior to the event which have given rise to the present proceedings the plaintiff had a number of transactions which Mr. Finnegan was handling for him and in respect of which he expected substantial sums of money to accrue to him. For a number of reasons he had decided to come to live in Dublin and he was interested in purchasing a house known as Dalkey Manor - an interest of which Mr. Finnegan was well aware. Dalkey Manor is owned by the defendant and she had been for some considerable time anxious to dispose of it. She is a married woman whose husband is a Builder and Property Developer. Although she is the legal owner of the property all the transactions in relation to it were carried out by her husband and it is not in any way controverted that throughout the transaction which I will presently consider he was acting as her agent and that she is bound by what he said and did. Mr. Grealy in fact employed two solicitors to look after his affairs. One of them was Mr. Finnegan to whom I have referred and the other was a Mr. Conlon. Although he instructed Mr. Conlon to deal with the legal aspects of the sale of Dalkey Manor (which is the subject matter of these proceedings) the evidence shows that he kept closely in touch with Mr. Finnegan about the sale and visited him regularly and discussed it with him.

3 Early in the month of October 1976 Mr. Grealy was in touch with Mr. Finnegan about other pressing matters. He urgently needed a sum of £5,000 in connection with a business trip to Libya and he requested Mr. Finnegan's help in raising the money. Mr. Finnegan enquired about the property available to Mr. Grealy as security for a loan and he advised him that if he could enter into a contract to sell Dalkey Manor he, Mr. Finnegan, could probably arrange a loan by way of bridging finance which would make the sum needed available to Mr. Grealy. Both Mr. Finnegan and Mr. Grealy were aware of the plaintiff's interest in Dalkey Manor and it was decided between them that Mr. Finnegan would endeavour to see if he could negotiate a sale of Dalkey Manor to the plaintiff.

4 The plaintiff had an appointment with Mr. Finnegan on the 6th of October, 1976 and he met Mr. Finnegan in his office on that day. What occurred on the 6th of October is crucial to a determination of the issues in this case and I should make it clear at the outset that I have no hesitation in accepting the plaintiff's version of what happened and in rejecting that of the defendant and Mr. Finnegan where their testimony conflicts with the plaintiff's both in respect of the events of 6th October and subsequent events. Whilst the plaintiff was talking to Mr. Finnegan about the plaintiff's affairs Mr. Finnegan was interrupted by a telephone call and he informed the plaintiff that Mr. Grealy was downstairs in the public office. He told the plaintiff that Mr. Grealy was looking for £6,000 in a hurry and that he had written cheques which he couldn't meet. I am quite satisfied that Mr. Finnegan did not disclose to the plaintiff the real reason why Mr. Grealy needed the money urgently (namely, for his trip to Libya). I am also satisfied that the amount he told the plaintiff that was required was £6,000, not £5,000 as had been Mr. Grealy's original requirement. I reject the evidence that Mr. Grealy was accompanied downstairs in Mr. Finnegan's outer office by Mr. Eric Allen (whose role in the affair I will refer to later) and I also reject Mr. Grealy's evidence that the bargain relating to the transaction was struck between him and the plaintiff. I am satisfied that Mr. Finnegan conducted the negotiations for the sale of Dalkey Manor with the plaintiff that, acting on the authority of Mr. Grealy he (not Mr. Grealy) concluded a firm agreement for the sale of Dalkey Manor for the sum of £46,000. It is possible that the plaintiff may have met Mr. Grealy downstairs in the outer office but his meeting was a casual one and the contract itself was concluded in the way I have described. I am also satisfied that it was agreed that the sale would be closed at the beginning of January 1977 . In relation to the sum of £6,000 which Mr. Finnegan told the plaintiff Mr. Grealy needed urgently I am satisfied that Mr. Finnegan stated that he would be able to "organise" the raising of this sum on the plaintiff's behalf; that he did not tell the plaintiff how he would raise the sum; and that he never told him that he would have to pay interest on it. The plaintiff was left under the impression that it would be forthcoming from the property transactions which Mr. Finnegan was handling for him. Evidence was given by Mr. Grealy (without objection) to an arrangement he made with Mr. Allen concerning the payment of interest by Mr. Grealy on the money Mr. Allen was lending. But as this is not relevant to any issue in these proceedings I refrain from making any finding in relation to it.

5 After the plaintiff left, Mr. Finnegan prepared two documents for signature by Mr. Grealy. Although they are both dated the 6th of October I think it is likely they were signed the following day. Mr. Eric Allen an Accountant, who was known to both the plaintiff and the defendant, had been contacted by both Mr. Finnegan and Mr. Grealy, and on the security of the agreement for sale, Mr. Finnegan negotiated a loan from Mr. Allen on behalf of the plaintiff of £6,000 for part of the purchase price. Probably on the 7th October Mr. Allen gave to Mr. Finnegan a cheque for £6,000 to be used by Mr. Finnegan in part payment to Mr. Grealy of the purchase price of £46,000. Thereupon, Mr. Finnegan gave Mr. Grealy a cheque for £5,000. He retained the balance of £1,000 on his behalf. In effect there has been part payment of £6,000 to the defendant, leaving a balance of £40,000 payable under the contract. Mr. Finnegan again acting on the plaintiff's behalf obtained Mr. Grealy's signature on the 7th October to a memorandum dated the 6th of October which stated "I Seamas Grealy agree to sell to Nathaniel Black Dalkey Manor at the price of £40,000" (emphasis added). I accept Mr. Finnegan's evidence that he prepared this document and had it signed so as to bind Mr. Grealy to the oral agreement which had previously been entered into. The second document which he prepared and which was signed by Mr. Grealy on the same day stated "I acknowledge receipt of £5,000 "(emphasis added)" by way of deposit on the sale of Dalkey Manor but on completion of transaction the said sum to be applied in payment for fixtures and fittings and not to go against the contract price". This document was not placed on the plaintiff's file by Mr. Finnegan and was not handed over to the plaintiff when he changed his solicitors and when Mr. Finnegan gave the plaintiff his file, and the plaintiff was not aware of its existence until it was produced out of Mr. Finnegan' pocket in Court whilst he was giving evidence. I am quite satisfied that this document in no way represents what was agreed between the parties in relation to the sale of Dalkey Manor. I reject completely Mr. Grealy's evidence that any agreement was reached concerning the apportionment of the purchase price as to fixtures and fittings and the suggestion that this was done to save stamp duty on the transaction. I reject also the plea in the defence that the transaction was tainted with illegality because of an attempt to diminish the stamp duty payable on the transaction. I will return later to the legal effect of these two documents.

6 On the 8th of October, 1976 Mr. Conlon, acting on behalf of Mr. Grealy sent of formal contract in duplicate to Mr. Finnegan. The last paragraph of the covering letter reads "please note that no binding contract will be deemed to have been entered into until such time as we return one part of the agreement to you duly signed by our client". This paragraph had, in my opinion, no legal effect. The oral agreement between the parties had not been made "subject to contract" - it was, in fact, a completed one. Mr. Grealy had telephoned Mr. Conlon on either the 6th or the 7th of October to give him instructions as Mr. Finnegan had stated he could not act for both parties to the sale. I am satisfied that Mr. Grealy did not inform Mr. Conlon that the agreement was one "subject to contract". Even if he had, such a statement would have been untrue and would have had no legal effect. The paragraph was included as a matter of prudent practice, but in the circumstances of this case it had no legal consequence. It is, however, of significance that Mr. Grealy, when instructing Mr. Conlon informed him that the purchase price was £40,000 (and not £46,000) and that he made no mention to his solicitor of the fact that he had received any advance from the purchaser on the purchase price. I accept Mr. Conlon's evidence that he knew nothing about the payment to Mr. Grealy of £5,000 until some considerable time later.

7 Mr. Finnegan returned the two draft contracts on the 25th of October, 1976 to Mr. Conlon. The plaintiff is a business-man and not a lawyer and it is clear that he left the legal aspects of the transaction completely in Mr. Finnegan's hands. Before signing the documents, however, he noticed that the draft did not reflect the agreement. The closing date in the draft sent by Mr. Conlon was stated to be the 11th of November. This was crossed out by Mr. Finnegan and the words "1st January" inserted instead. He omitted to put in the year but it is accepted that his intention was that the closing date was to be the 1st...