O'Connor v Coady
| Jurisdiction | Ireland |
| Judge | Justice Carroll |
| Judgment Date | 12 November 2003 |
| Neutral Citation | [2003] IEHC 77 |
| Docket Number | RECORD NO. 556 SP 2002 |
| Court | High Court |
| Date | 12 November 2003 |
[2003] IEHC 77
THE HIGH COURT
AND
Land law — Property — Conveyancing — Vendor and purchaser — Contract — Condition precedent —Planning permission — Practice and procedure — Time limits — Failure to obtain planning permission —Service of completion notice — Whether vendor entitled to rescind contract.
Facts: The plaintiff had entered into a contract of sale with the defendant regarding the sale of lands. As part of the contract it was stipulated that the purchaser was to obtain planning permission for the lands within a certain time limit. In addition a deposit of £45,000 was also paid. Difficulties arose with regard to the obtaining of planning permission and the vendor returned the deposit and attempted to treat the contract as at an end. The purchaser however called upon the vendor to complete the sale. A number of issues arose for the court, principally if the vendor was correct in treating the contract as having been rescinded.
Held by Carroll J in determining the following issues. The condition to obtain planning permission was a condition subsequent and not a condition precedent. It was not disputed that the grant of planning permission was for the benefit of the purchaser and could have been waived by him. Time was not made of the essence in the contract and in order to have brought finality to the contract the vendor should have served a completion notice under the general conditions of sale. If the time fixed by the notice then elapsed the vendor could treat the contract as at an end. The plaintiff vendor had therefore invalidly rescinded the contract of sale.
The plaintiff, (referred to as the vendor) and the defendant, (referred to as the purchaser), entered into a contract for the sale of land following negotiations on 31st May, 2001 for £450,000. A deposit of £45,000 was paid.
Clause 3 provided:
"The contract herein is subject to the purchaser, his servants or agents obtaining final grant of planning permission for the residential development applied for by him, his servants or agents, on the property at sale herein and after conclusion of all appeals (if any) within four months of the date hereof."
Clause 6 provided:
"The closing date herein shall be seven days after the issue of the final grant of planning permission referred to in special condition 4 above." (actually 3).
Planning permission was not obtained within four months of the date of the contract. The planning permission applied for concerned other lands as well as the lands in question.
The vendor's solicitor wrote to the purchaser's solicitor on 23rd August, 2001, nothing that they had not heard in relation to the planning permission and asking them to revert to advise the status thereof and as to when their client expected to be in a position to complete the transaction.
On 3rd September, 2002 the defendant's solicitor wrote to say planning permission issued in June. However, an appeal was lodged and the hearing would be in September or October. He said his clients were confident that the appeal would not cause difficulty and to enable completion he asked them to reply to requisitions on title sent on 26th June, 2001 and confirm that the draft title deed was approved.
The purchaser's solicitor replied on 12th September, 2002, saying they were surprised at the contents and said:
"As you are aware, under the terms of the contract, this contract has lapsed and is at an end."
Without prejudice they offered to renegotiate terms for the sale of the property. They said they returned the deposit in the sum of €57,138.21 (equal to £45,000). In fact a cheque was not enclosed but was forwarded latter.
The defendant's solicitor replied on 18th September, 2002, calling on the purchaser to confirm that she would proceed with the sale. They said that they expected a favourable decision of An Bord Pleanála to issue on 3rd October, 2002 and expected to complete the purchase as soon as possible thereafter. By a letter dated 4th September, 2002 the vendor's solicitor refused to accept the return of the deposit. The purchaser's solicitor wrote on 11th October, 2002 confirming that the decision of An Bord Pleanála was received on 8th October, 2002 and that the purchaser now wished to complete. On 21st October, 2002 in pursuance of Clause 40 of the General Conditions of sale, the purchaser's solicitor called on the vendor to complete the sale within 28 days of the date thereof.
There are affidavits dealing with communications between the solicitors for the parties and also between an associate of the purchaser and the vendor's husband. There is a conflict of evidence which cannot be resolved on affidavit.
However I am satisfied that these communications do not impinge on the legal issues to be decided in this matter.
The vendor submitted firstly that the condition about planning permission was a condition precedent, in which case no contract came into existence.
However, case law supports the view that a condition providing that the contract is subject to planning permission is a condition subsequent. (SeeHealy v. Healy Kenny J., Unreported, 3rdDecember, 1973; International Securities Ltd. v. Portmarnock Estates Ltd. Hamilton J., Unreported, 9th April, 1975;Wylies Irish Conveyancing 2nd Ed., para. 7.16). Accordingly I hold that the condition was a condition subsequent and not a condition precedent.
It is not disputed that the planning permission referred to in the contract is the final planning permission given by An Bord Pleanála. Also, it is not disputed that the clause relating the planning permission was for the benefit of the purchaser and could have been waived by him.
The vendor submitted secondly that since the planning permission was not obtained within four months from the date of contract, the vendor was entitled to return the deposit and treat the contract at an end. While the word “lapse” was used in correspondence, Mr. O'Dwyer for the vendor did not seek to argue that an automatic lapse occurred on 1st October, 2001. He said that some unequivocal act showing the vendor treated the contract at an end was permitted prior to 3rd October, 2002 because the planning permission did not issue until that date. He relied on the case ofSepia Ltd. and Opal Ltd. v. M & P Hanlon Ltd. and Seaborn Ltd., [1979] I.L.R.M. 11. He said no written variation of the terms of the contract had been agreed.
The purchaser on the other hand, says the closing date was not expressed to be of the essence therefore the vendor would have to serve a...
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