Crean v Drinan

• Jurisdiction: Ireland
• Judge: Mr. Justice Harrington
• Judgment Date: 01 January 1983
• Neutral Citation: 1982 WJSC-HC 1865
• Docket Number: No. 3680P/1978
• Court: High Court
• Date: 01 January 1983

1982 WJSC-HC 1865

THE HIGH COURT

No. 3680P/1978

CREAN v. DRINAN

BETWEEN:-

DANIEL CREAN

Plaintiff

-and-

DAVID DRINAN

Defendant

1 Judgment of Mr. Justice Harringtondelivered the 22nd day of May 1982.

2 In this case the Plaintiff claims rescission of a contract in writing made on the 23rd day of April 1979 and the return of a deposit of£9,000 paid by the Plaintiff.

3 During the course of the proceedings the Defendant unfortunately died and, immediately prior to the hearing, I, on consent, reconstituted the Suit by appointing as Defendant the Legal Personal Representative of the late Defendant. I did this on condition that both parties would file amended Pleadings.

4 The Defendant had filed a counterclaim claiming that the Plaintiff had wrongfully repudiated the contract, seeking a declaration that the Plaintiff's deposit had been validly forfeited and other relief.

5 As the parties agreed that the Plaintiff's claim turned on a notpoint of law they also agreed that I should defer further consideration of the Defendant's counterclaim until the Plaintiff's claim had beendecided.

The Facts

6 The contract was for the sale of a public house as a going concern. The agreed closing date was the 4th of May 1979 and there seems little doubt that the Plaintiff was anxious to have the male closed as quickly as possible. But the contract was in the standard form of the Incorporated Law Society and it is clear from the wording of Clauses 4 and 28 that, so far as the closing date was concerned, time was not of the essence of the contract.

7 The Plaintiff's Solicitor, Mr, Tobin, had seen the title prior to executing the contract and had discovered what he believed to be a defect in it. There was with the title deeds a Deed of Rectification which had attempted to put right this defect but Mr. Tobin believed that the Deed of Rectification had been ineffective and that there was still at least the possibility that a leasehold interest in the property was outstanding in two ladies named Catherine Morley and Nora Moynihan. He accordingly insisted on the following Special Condition in the contract appears as Special Condition No. 2 and reads as follows:-

" The contract is subject to the vendor obtaining an assignment of any interest in the property for sale that may be vested in Catherine Morley and Nora Moynihan the surviving sisters of Sheila O'Shea in a form acceptable is the purchaser's Solicitors on or before the closing date and the vendor's Solicitors shall undertake to have the said assignment duly exeuted as expediously (sic) as possible. In the event of the said Deed not being executed then the purchaser shall be refunded his deposit but without interest costs or compensation of anykind."

8 Mr. Tobin drafted and, ultimately, had engrossed, an assignment of the property which contemplated that the said Nora Moynihan and the said Catherine Morley should join in the conveyance to get in any outstandinginterest.

9 This engrossment was sent to the vendor's Solicitors prior to closing date and it must be assumed therefore that it represented a means of getting in the outstanding interests "in a form acceptable to the purchaser's Solicitors" so far as Special Condition No. 2 wasconcerned.

10 The closing date fixed by the contract was the 4th of May 1979. The sale was not closed on that day. On the 8th of May 1979 Mr. Tobin,who was under constant pressure from his client to have the transaction completed, wrote to the vendor's Solicitors Messrs Messrs Ronan Daly Hayes & Co.a letter in the fellowing terms:-!

"We are in recept of yours dated the 2nd instant, herein withenclosures."

11 The following replies would appear to be unsatisfactory:

12 a G: 65 a map must be furnished in view of the recent extension of the premises.

13 b H: 62 planning permission for the conversion of the residential portion of the property to flats must be furnished.

14 c H: 63 if these documents are not in the possession of the vendor a satisfactory explanation in regard to their whereabouts must be obtained and furnished.

15 d H: 65 again this is an essential document. Subject compliance With above and with outstanding Raquuisition on Title, She matter would appear to be in order. Please let us know when the Deed of Assignment has been completed and when you are in a position to comply with Requisitions on Title.

16 Please note that our client is most anxious to close and ispressing us strongly in the matter

17 Yours faithfully."

18 This letter, though dated the 8th of May 1979 and posted in the ordinary course of post, did not apparently reach Messrs Ronan Daly Hayes and Company until the 15th of May 1979.

19 When Mr. Tobin wrote the letter of the 8th of May 1979 his understanding was that the Deed of Assignment had not yet been executed by Nora Moynihan or by Catherine Morley. But that letter was written by him without specific reference to his client and pursuant to his general instructions to have the sale closed as soon as possible.

20 On the 15th of May 1979 Mr. Tobin spoke with the vendor's Solicitor and inquired if the Assignment had yet been executed by the two sisters Catherine Morley and Nora Moynihan. He was informed that one of the sisters had executed the Assignment but that the other one was, unfortunately, on holidays in Lourdes but that the vendor's Solicitors would continue their efforts to have the assignment executed by the remaining sister as soon as possible. Mr. Tobin then took his client's specific instructions on this point and the purchaser decided not to proceed with the sale as the vendor had been unable to have the assignment executed by the specified closing date.

21 On the 15th of May 1979 Mr. Tobin accordingly wrote to Messrs, Ronan Daly Hayes and Company a letter in the following terms:-

"Further here in, we are instructed by our client to advise you that he is not proceeding with this sale in view of your client's inability to complete the sale, in accordance with the contract, on the specified closing date.

As you are aware time is of the essence of this contract as it involves the sale of the business. Furthermore it ia a condition precedent that the Assignment of the interests vested in Catherine Morley and Nora Moynihan be furnished prior to closing. Our client informs us that because of your client's neglect the business has sufferedconsiderably.

Accordingly, therefore, our client is discharged from the contract for sale and we request the immediate return of the deposit held by you as Stakeholder in accordance with the special conditions of the contract for sale.

Yours faithfully."

22 The sister who had not executed the contract returned from her holidays in Lourdes on the 18th of May. The vendor's Solicitors met her on her return on the 18th and brought her to their offices where sheexecuted the Assignment. In fact neither sister made any difficulty whatsoever about executing the Assignment.

The Law

23 In these circumstances the question arises as to what the respective rights of the parties in law are.

24 Mr. Sutton, on behalf of the Plaintiff, submits that the meaning of Special Condition No. 2 is quite clear. The term "blosing date" used in Condition No. 2 means the 4th of May 1979.

25 Special Condition No. 2 provides that "the contract is subject" to the vendor obtaining an assignment of any interest in the property for sale that may be vested in Catherine Morley and Nora Moynihan in a form acceptable to the purchaser's Solicitors on or before the 4th of May 1979. It also provides that this Deed is to be executed as expeditiously as possible. In the context this clearly means as expeditiously as possible before the 4th of May 1979. It also provides what is to happen if the Deed is not executed - the purchaser is to be refunded his deposit without interest costs or compensation of anykind.

26 Mr, Sutton relies principally upon the decision in AberfoylePlantations Limited .v. Cheng 1959 3 All England Reports at Page910.

27 In that case, which was a decision of the Privy Council, the Courtdraw a distinction between the flexibility which courts of...