O'Connor v First National Building Society

JurisdictionIreland
JudgeMr. Justice Lynch
Judgment Date01 January 1991
Neutral Citation1990 WJSC-HC 2067
Docket NumberNo. 6350p/1989
CourtHigh Court
Date01 January 1991
O'CONNOR v. FIRST NATIONAL BUILDING SOCIETY

BETWEEN

ROBERT O'CONNOR AND ANN O'CONNOR
PLAINTIFFS

AND

FIRST NATIONAL BUILDING SOCIETY AND KENNETH B. HENDERSONFINTAN P. CLANCY AND HELEN J. CULLEN SOLICITORS PRACTISING UNDER THESTYLE OF MARGETSON AND GREENE
DEFENDANTS

1990 WJSC-HC 2067

No. 6350p/1989

THE HIGH COURT

Synopsis:

NEGLIGENCE

Solicitor

Advice - Absence - Purchaser - Dwelling - Structural defects - Failure to advise client that independent report on condition of house should be obtained - (1989/6350 P - Lynch J. - 3/7/90)

|O'Connor v. First National Building Society|

PROFESSIONS

Solicitors

Advice - Absence - Duty - Breach - Purchaser of house - Failure to advise purchaser to obtain independent report on condition of house - (1989/6350 P - Lynch J. - 3/7/90)

|O'Connor v. First National Building Society|

REAL PROPERTY

Incumbrance

Creation - Loan - Contract - Terms - Exclusion of liability - Purchaser of house failed to procure independent report on its condition - Building society advanced part of price on strength of its own valuation - Structural defects in house - Purchaser bound by exemption clause (1989/6350 P - Lynch J. - 3/7/90) - [1991] ILRM 208

|O'Connor v. First National Building Society|

SALE OF LAND

Purchaser

Loan - Necessity - Lender - Property - Survey - Misrepresentation - Condition of dwelling - Structural defects - Purchaser's failure to procure surveyor's report - Purchaser's solicitor - Negligence - Building society — Proposed loan - Liability excluded by contract - (1989/6350 P - Lynch J. - 3/7/90)

|O'Connor v. First National Building Society|

Citations:

BUILDING SOCIETIES ACT 1976 S77

BUILDING SOCIETIES ACT 1976 S78

BUILDING SOCIETIES ACT 1976 S79

WARD V MCMASTER 1988 IR 337 1989 ILRM 400

HEDLEY BYRNE & CO LTD V HELLER & PARTNERS LTD 1963 2 AER 575

ANNS & ORS V LONDON BOROUGH OF MERTON 1977 2 AER 492

CURRAN V NORTHERN IRELAND HOUSING EXECUTIVE 1985 8 NIJB 47

HARRIS & SMYTH V WYRE FOREST DISTRICT COUNCIL 1989 2 AER 514

SUNDERLAND V MCGREAVEY & ORS 1987 IR 372

BUCKLAND V MCAVISY 1968 112 SOL J 841

JACKSON & POWELL PROFESSIONAL NEGLIGENCE 1987 ED

HARRIS & SMYTH V WYRE FOREST DISTRICT COUNCIL 1988 1 AER 691

1

Judgment of Mr. Justice Lynchdelivered the 3rd day of July 1990.

2

This is a claim for damages arising out of the purchase of a house No. 81 Mangerton Road, Drimnagh in the City of Dublin by the Plaintiffs which they allege proved defective. The price paid for the house was£21,500 of whichthe first named Defendants advanced £15,000. The second named Defendants acted as Solicitors for the Plaintiffs in the purchase of the house. The Plaintiffs blame both Defendants for allegedly dissuading them from getting the house inspected by an independent qualified person which they allege would have revealed the defects of which they complain and would have resulted in the Plaintiffs not buying the house at all or perhaps buying it at a very much reduced price.

THE FACTS
3

The first named Plaintiff Mr. O'Connor had been first a bus conductor and then a bus driver with C.I.E. Sometime in the first half of the 1980's Mr. O'Connor had had to retire from his employment with C.I.E. owing to ill-health and from that time he had been living on a Social Welfare pension which was permanent together with a permanent pension arising under a Policy of Insurance with the Norwich Union Insurance Company Limited. Mr. O'Connor is aged 40 years; Mrs. O'Connor is aged 37 yrs. They have four children being two boys and two girls.

4

About 1976 the Plaintiffs purchased a house in Ivy Terrace which is off Cork Street in the City of Dublin. The Plaintiffs for the purposes of purchasing Ivy Terrace and indeed on the occasion of their purchase of their first house had obtained a loan from the first Defendants. Ivy Terrace when purchased was in very poor repair and the Plaintiffs improved the house and put it in to good repair and inparticular improved it decoratively. As the children were getting older the Plaintiffs found that the house in Ivy Terrace which had only two bedrooms had become too small for their needs. They began to look around for alternative accommodation and in particular a house which would have three bedrooms.

5

Before making any real effort to find and purchase such a house however Mr. O'Connor made enquiry from the first Defendants as to whether they would still be willing to lend him money for such a purchase having regard to the change in his circumstances from the time when he had bought the house in Ivy Terrace when he had secure employment with C.I.E. Accordingly he went to the first Defendants in January 1988 to enquire whether they would be willing to lend him £15,000 to enable him to purchase a suitable house. After enquiry by the first Defendants as to the permanance of his Social Welfare pension and his insurance pension and on being satisfied of their permanance the first Defendants approved the Plaintiffs for a loan of £15,000 provided of course that the house to be purchased would be adequate security for that amount.

6

During the time when the Plaintiffs had been living in the house in Ivy Terrace they had purchased the fee simple of that house and had in doing so come accross the second Defendants and in particular Mr. Cobbe who was employed by the second Defendants and who were acting on behalf of the owner of the fee simple. Accordingly when they came topurchase a three bedroomed house the Plaintiffs consulted Mr. Cobbe and his advice was that they should make sure that they would have a sale of their own house arranged first before they would buy an alternative. Mr. O'Connor then saw a notice in the garden of No. 81 Mangerton Road Drimnagh in the City of Dublin indicating that that premises was for sale and that the Auctioneers or Estate Agents having carraige of sale were Messrs. Gleeson Maher Estates.

7

The Plaintiffs enquired from Messrs. Gleeson Maher Estates about the house and they saw over the house both inside and outside and noted that it was in a very bad state of decorative repair though the house seemed otherwise to be sound. They agreed to buy the house for £21,500 on Wednesday the 23rd of March 1988 and on Friday the 25th of March 1988 they paid to Messrs. Gleeson Maher Estates a booking fee of£1,000. In the meantime Mr. O'Connor had gone in to the firstDefendants" Office in Dublin where he had met Mr. Casey the Defendants representative on Thursday the 24th of March 1988 and had obtained from him the loan application form required by the first Defendants as well as some other forms.

8

The Plaintiffs filled in the loan application form in their own home leaving a few paragraphs blank for which they would require the assistance of the first Defendants to fill in the details. On Friday the 25th of March 1988 the Plaintiffs returned to the first Defendants and completed the filling in of the loan application form with the assistance of Mr. Casey. During the course of this interview with Mr. Casey the Plaintiffs and in particular Mrs. O'Connor asked him whether they should get an independent inspection of thehouse or not. Mr. Casey indicated that such an inspection might cost£100 or £200 or even as much as £700 but that a vendor would never allow an inspection of such detail as to cost £700 and he further pointed out that the first Defendants would be having their own valuation or survey or inspection of the premises and if that showed up anything structurally serious or any rot of a serious nature the first Defendants would not advance a loan and could not advance a loan on the security of the house. The Plaintiffs paid to the first Defendants on that occasion a sum of £29.80 in respect of the cost to be incurred by the first Defendants in having the premises valued or surveyed or inspected. The form which the Plaintiffs had completed partially in their own home specifically provided that:

"(8) No responsibility can be accepted by the Society for the condition of the property."

9

This paragraph occurs immediately above the signatures of both Plaintiffs and I am satisfied that both Plaintiffs were aware in a general way of that paragraph and the other provisions above theirsignature.

10

Subsequently the Plaintiffs went to see Mr. Cobbe of the second Defendants. They say that this was on the same date as they completed the filling of the loan application form namely Friday the 25th of March 1988 but they also say that it was after the receipt of a letter from Messrs. Gleeson Maher Estates confirming the sale to them subject to contract. That letter from Messrs. Gleeson Maher Estates tothe Plaintiffs personally is dated the 28th of March 1988 whereas Messrs. Gleeson Maher Estates had written to the second Defendants by letter dated the 25th of March 1988. It follows therefore that the Plaintiffs in fact went in...

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