Darlington Properties Ltd v Meath County Council

JurisdictionIreland
JudgeMr. Justice Kelly
Judgment Date08 March 2011
Neutral Citation[2011] IEHC 70
Docket Number[No. 2720 P/2010]
CourtHigh Court
Date08 March 2011

[2011] IEHC 70

THE HIGH COURT

[No. 2720 P/2010]
[No. 92 COM/2010]
Darlington Properties Ltd v Meath County Council
COMMERCIAL

BETWEEN

DARLINGTON PROPERTIES LIMITED
PLAINTIFF

AND

MEATH COUNTY COUNCIL
DEFENDANT

BYRNE v HELLER & PARTNERS 1964 AC 465

DORAN v DELANEY 1998 2 IR 61

DONNELLAN v DUNGOYNE 1995 ILRM 388

MCANARNEY v HANRAHAN 1993 3 IR 492

GRAN GELATO LTD v RICHCLIFF (GROUP) LTD 1992 CH 560

ESSO PETROLEUM CO LTD v MARDON 1976 1 QB 801

SEDDON v NORTH EASTERN SALT 1905 1 CH 326

SALE OF GOODS AND SUPPLY OF SERVICES ACT 1990 S44

GOLDEN STRAIT CORPORATION v NIPPON 2007 2 AC 353

DUFFY v RIDLEY PROPERTIES LTD 2008 4 IR 282

NAUGHTON v O'CALLAGHAN 1990 3 AER 191

CONTRACT

Sale of land

Misrepresentation - Duty of care - Negligence - Rescission - Assessment of damages - Development site - Construction of distributor road included in development plan objective - Grant of planning permission to third party for different purpose - Whether plaintiff induced to enter into sale - Whether duty of care owed to plaintiff - Whether representations were negligent - Whether plaintiff suffered loss - Whether damages should be assessed as of date of breach - Whether grant to third party post dated sale of lands - Whether plaintiff carried out reasonable planning inquiries - Whether plaintiff delayed in discovering true position concerning distributor road - Whether plaintiff would have bought land without distributor road - Whether rescission available in cases of contracts induced by negligent misrepresentation - Hedley Byrne v Heller [1964] AC 465 followed; Doran v Delaney [1998] 2 IR 61; Donnellan v Dungoyne [1995] 1 ILRM 388; McAnarney v Hanrahan [1993] 3 IR 492; Gran Gelato Ltd v Richcliff (Group) Ltd [1992] Ch 560; Esso Petroleum Company Ltd v Mardon [1976] QB 801; Seddon v North Eastern Salt [1905] 1 Ch 326; Golden Strait Corporation v Nippon [2007] UKHL 12, [2007] 2 AC 353; Duffy v Ridley Properties Ltd [2007] IESC 23, [2008] 4 IR 282; Naughton v O'Callaghan [1990] 3 All ER 191 considered - Judgment awarded (2010/2720P - Kelly J - 8/3/2011) [2011] IEHC 70

Darlington Properties Ltd v Meath County Council

Facts The local authority had sold a piece of land by tender. Darlington (the plaintiff) submitted its tender in the sum of €4,510,000, which was the highest tender and was accepted by the local authority. Darlington sought to develop the lands but an issue arose regarding access to a distributor road. The distributor road provided a crucial link to the local Town Centre which the plaintiff considered important for the retail element of the site to be feasible. Ultimately it became apparent after the plaintiff had bought the lands that the site would not have access to the distributor road and this greatly devalued the site and the plaintiff sought damages as compensation. It became apparent that the local authority had granted planning permission to a neighbouring development in such a way as to make the building of the distributor road impossible. The plaintiff had sought to mitigate the situation by applying for planning permission for a revised development. The revised development had a lesser % of commercial development owing to the changed access but this proposal was refused planning permission.

Held by Kelly J in awarding damages to the plaintiff. The local authority accepted that the map which formed part of the tender documents demonstrated an indicative alignment for the distributor road across the lands in sale. The distributor road was of major importance for Darlington but it also figured prominently in the thinking of the local authority and they were fully alive as to the necessity to provide it. It transpired that that the planning permission which had rendered the building of the distributor road an impossibility had been granted prior to the local authority offering the lands for sale. The plaintiff had been induced to enter into the contract as a result of negligent misrepresentations (regarding the distributor road) made to it by the local authority. A duty of care situation arose between the local authority and the plaintiff which had been breached. The correct remedy in the situation was to award damages based on the purchase money paid for the land (€4.51m) less its current value (€450,000). The measure of damages was therefore €4,060,000. This is a case which, if it had been dealt with honourably by the local authority, might not have resulted in litigation at all. Instead the indefensible was sought to be defended giving rise to a large judgment and the costs of a three day trial all to be borne by the public purse. Much of that could have been avoided. The conduct of the local authority throughout was not impressive.

Reporter: R.F.

Mr. Justice Kelly
1

This case arises out of bungling and ineptitude of a high order on the part of the defendant (the County Council). Such shortcomings resulted in legal wrongs being done to the plaintiff (Darlington) for which it is entitled to redress. This is the tale.

2

In 2006, the County Council owned a piece of land in Ashbourne, Co. Meath. It decided to sell it. It commissioned John Ryan, Auctioneer, to advertise the sale of the land by tender. He produced a brochure in respect of the land which contained a number of maps.

3

The brochure pointed out that the land was a development site of 0.662 hectares. The land was zoned C1 in the 2001 Meath County Development Plan which meant that it could be used"to provide for and facilitate mixed residential and business uses in existing mixed use central business area".

4

The site was an L-shaped one which was said to have an"immense development potential in a proven selling area". It was described as being "situated between Dunnes Stores and the Credit Union, adjacent to the Ashbourne New Town Center (sic) retail and residential development". The land was stated to be located "only c. 12 miles from Dublin City Center (sic) on the N2 Dublin Derry road. M50 - Ashbourne bypass opening fully in June 2006".

5

Of particular significance was the statement contained in the brochure that the land consisted of a"zoned site with frontage onto three roads".

6

Two of those roads were in existence at that time. One of them was known as Killegland Road. The frontage onto that road was about 55m in length. However, the Killegland Road was a cul-de-sac and so had little to offer in terms of development. The second road frontage was onto Frederick Street and was only 15m in length. There was no third road (the distributor road) then in existence. The distributor road was yet to be built. On the final page of the brochure it was made clear that the distributor road was to be built within the confines of the site which was being offered for sale. The last sketch map in the brochure demonstrated the approximate route of the distributor road. It was to provide frontage onto the site and to connect to the main street of the Ashbourne Town Centre.

7

Tenders had to be submitted by 5pm on Thursday, 6th April, 2006. Darlington was one of four tenderers.

8

The County Council accepts that the tender documents represented the distributor road as an objective of its County Development Plan 2001. They also accept that the map which formed part of the tender documents demonstrated an indicative alignment for the distributor road across the lands in sale.

9

The distributor road was represented in the tender documents as providing a link with the new Town Centre in Ashbourne. Its exact location and route was to be determined by future planning applications to develop the land in sale.

10

Accompanying the tender documents was a letter dated 22nd February, 2006, from the County Council which stated that the distributor road was an objective of the current plan and would provide access to the Town Centre.

11

The tender documents included a draft contract which provided at Condition No. 5 as follows:-

"The purchaser acknowledges that it is an objective of the current Meath County Council Development Plan that the distributor road referred to in the letter from the vendor dated 22nd February, 2006, listed at No. 3 of the document schedule be provided in respect of the property in sale."

12

On 23rd March, 2006, Darlington's then solicitors wrote to the County Council solicitors and, inter alia, asked the following question:-

"Is it intended that the owner of the site will have to pay the full cost of constructing the distributor road or will there by (sic) contributions made to it via levies or some other way from Meath County Council?"

13

The answer to this query was unequivocal. It stated that the County Council would not be making any contribution financial or otherwise to the building of the distributor road.

14

From the above, it is clear that the County Council's then current development plan, its sales brochure and the pre-contract correspondence provided for the building of the distributor road within the curtilege of the site in sale. That road was to link up with the Ashbourne Town Centre development. The distributor road was not merely an objective of the then current development plan but was, pursuant to condition No. 5 of the draft contract, to be built by the purchaser of the lands with no contribution forthcoming from the County Council.

15

As will appear later, the distributor road was of major importance for Darlington but it also figured prominently in the thinking of the planners in Meath County Council.

16

On 27th January, 2006, Ms. Joanna Kelly, an Executive Planner sent an email to Mr. Alan Rodgers, Area Administrator in connection with the land. This was prior to it being offered for a sale. In the course of her email she said "there is also an indicative road to the south of the site which willhave to be provided so as to ensure...

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3 cases
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