O'Connor v Coady

JurisdictionIreland
CourtSupreme Court
JudgeMr. Justice Geoghegan,Mr Justice McCracken
Judgment Date21 October 2004
Neutral Citation[2004] IESC 54
Date21 October 2004
Docket Number[SC

[2004] IESC 54

THE SUPREME COURT

McGuinness J.

Geoghegan J.

McCracken J.

414/03
MARY O'CONNOR v. PATRICK COADY
IN THE MATTER OF THE VENDOR AND PURCHASER ACT, 1874
BETWEEN/
MARY O'CONNOR
Plaintiff/Appellant

and

PATRICK COADY
Defendant/Respondent

Citations:

VENDOR & PURCHASER ACT 1874

SEPIA LTD & OPAL LTD V M & P HANLON LTD & SEABORN LTD 1979 ILRM 11

SMITH V BUTLER 1900 1 QB 694

ABERFOYLE PLANTATION V CHENG 1960 AC 115

MALONEY V ELF INVESTMENTS LTD 1979 ILRM 253

MCKILLOP & ANOR V MCMULLAN 1979 NI 85

PERRI V COOLANGATTA INVESTMENTS PROPERTY LTD 1982 149 CLR 537

HEALY V HEALY UNREP KENNY 3.12.1973

MAYNARD V GOODE 1926 37 CLR 540

O'MULLANE V RIORDAN 1978 ILRM 73

HUNT V WILSON 1987 2 NZLR 261

GANGE V SULLIVAN 1966 116 CLR 441

INCORPORATED LAW SOCIETY OF IRELAND GENERAL CONDITIONS OF SALE 1995 CLAUSE 40

SANDWELL PARK COLLIERY CO, RE 1929 1 CH 277

Synopsis:

- [2004] 3 IR 271 - [2005] 1 ILRM 256

Facts: Sale agreed subject to planning permission being obtained within 4 months, closing date to be within 7 days of grant. More than 15 months had elapsed when purchaser wrote to vendor, seeking replies to requisitions on title. Vendor replied by letter headed "subject to contract/contract denied".

Purchaser issued proceedings seeking specific performance upon which vendor issued a special summons seeking High Court's opinion as to whether she was entitled to rescind contract following purchaser's failure to comply with special condition on planning permission. The High Court held that as she had failed to serve a completion notice she was not entitled to rescind the con tract. She appealed this decision to the Supreme Court.

Held by the Supreme Court in allowing the appeal that as the planning permission condition had not been completed with and as a completion notice cannot be served until after the closing date which was to within 7 days of the final grant of planning permission no completion notice could validly have been served and the appellant's letter headed 'subject to contract / contract denied had the effect of validity rescinding the contract.

Reporter: F.McE.

1

JUDGMENT of Mr. Justice Geoghegandelivered the 21st day of October 2004

2

The background to this appeal is that the appellant sold certain property to the respondent subject to the obtaining of planning permission within four months and with no specific closing date but with the provision that the sale was to be closed within seven days of the granting of the permission. The planning permission was not granted until more than a year after the date of the contract. When the four month period had expired without the permission being granted, neither party initially gave any notice to the other indicating that he or she was treating thecontract as at an end. At a time, however, when it appeared that planning permission was shortly going to issue the respondent became active and through his solicitor made suggestions as to how the sale would proceed. This letter was responded to by the solicitors for the appellant in a letter headed "subject to contract/contractdenied". They expressed surprise at the contents and asserted that the contract had lapsed after the four months period. The same solicitors suggested that there was, therefore, no longer any contract but that their client would be willing to renegotiate a new contract at a new price. The respondent displayed indignation at this response on the alleged basis that all the indications had been that the appellant was treating the contract as still alive and indeed the deposit had never been returned. The respondent, accordingly, launched specific performance proceedings in the Circuit Court. The appellant thereupon instituted these proceedings in the High Court under the Vendor and Purchaser Act, 1874. The special endorsement of claim on the Special Summons sought clarification from the court on three questions (the third of which is not now regarded as relevant). That special endorsement of claim subsequently became amended by the addition of further questions. In its original form the two relevant questions were as follows:

3

1. Was the plaintiff entitled to rescind the contract dated the31 st May following the failure of the defendant to comply with the specialcondition on obtaining planning permission by the 30 thSeptember, 2001?

4

2. Did the plaintiff in fact validly rescind said contract of the31 st May, 2001?

5

For reasons which I will be developing further in this judgment, I believe that those were the relevant questions and that it is somewhat unfortunate that unnecessary confusion was introduced into the case by the additional questions in the amended special endorsement of claim. Those additional questions were as follows:

6

2 "3. Was the plaintiff under the said contract entitled to regard the said contract as being at an end when the provisions in relation to the obtaining of planning permission within the time limit prescribed were not complied with, in that the said planning permission did not issue?

7

4. Was it incumbent upon the plaintiff, being the vendor under the said contract, to notify the defendant, being the purchaser, that the said contract was at an end?

8

5. The said contract being conditional upon the said issue of planning permission did the plaintiff, being the vendor under the same, either expressly or by implication do any act or thing as would have indicated to the purchaser that they were waiving the requirement of compliance with the said condition or otherwise indicating that she was treating the said contract as unconditional?

9

6. Was the defendant, being the purchaser under a conditional contract entitled to assume in the absence of the said condition being fulfilled as therein provided that the plaintiff being the vendor, had waived the said condition orthat the contract had otherwise become unconditional or otherwiseenforceable."

10

The case came for hearing before Carroll J. and she delivered a reserved judgment on the 12 th November, 2003. The effect of the answers which she gave to the questions was that the respondent succeeded in his contention that there was still a subsistingcontract.

11

It would seem to me that the reasoning of Carroll J. was based on the arguments and agreed parameters of the case put before her by counsel which were more or less repeated at the hearing of the appeal before this court. For instance, the learned trial judge states in her judgment that the vendor submitted firstly that the condition about planning permission was a condition precedent, "in which case no contract came into existence". It would seem to me that to quite an extent, even before this court, counsel on both sides accepted that there was a relevant issue as to whether the condition was a "condition precedent" or a "conditionsubsequent". For reasons which I will elaborate on, I do not consider that that distinction is either particularly relevant or particularly helpful.

12

Of the many cases included in the book of authorities the one which the learned trial judge found most relevant was Sepia Limited v. M. and P. Hanlon Limited [1979] I.L.R.M. 11, a decision of Costello J.I would respectfully differ from the learned trial judge in the degree of relevance that she attached to that case which would seem to me to be quite different in a number of respects. In the Sepiacase there had been a contract of sale subject to the granting of planning permission. There was no time limit on the condition as to planning permission but there was a specified closing date in connection with which it had been made clear that time was of the essence and in the context that the planning permission had to be obtained before the closing date. A second contract was then entered into relating to separate property and containing no condition as to planning permission but amending also the first contract the end result of which was that there was a common closing date in respect of which for the reasons given by Costello J. time was not of the essence. Since there was only a non-essential closing date and no express time limit on the planning condition, clearly the only relevant date could be a date created by a notice making time of the essence. Costello J., however, pointed out at p. 24 of the report that in the case of the first contract if the purchaser did not waive the special condition relating to planning permission that contract "would come to an end at the expiration of the notice (the condition relating to planning permission not having been complied with)" and the learned judge cites Smith v. Butler [1900] 1 Q.B. 694; and Aberfoyle Plantation Limited v. Cheng [1960] A.C. 115(a case relied on by the appellant on this appeal). Ifanything, that sentence, in my opinion, is more helpful to the appellant than to the respondent but I do not think that Costello J's words should be interpreted as his having expressed any view as to whether in the case of a conditional contract, if the condition fails there is a self-executing termination of the contract or on the other hand if one of the parties has to indicate that he or she is treating it as at an end. It will emerge later in this judgment that I favour the latter view and in so doing, I am satisfied that I am in no way differing from any views expressed by Costello J. I do not think that he addressed that question at all as it did not arise.

13

Returning to the case at hand, the position, as I see it, is that although a helpful book of authorities has been furnished to the court none of the cases are directly in point to the precise questions that arise here. It is important, however, to note that whatever answers may be arrived at by this court to the questions raised in the summons it does not necessarily follow that they can be transported to some other future case in which a planning permission condition or some similar...

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