Doran v Delaney

• Jurisdiction: Ireland
• Judge: Mr. Justice Geoghegan
• Judgment Date: 25 November 1998
• Neutral Citation: [1998] IEHC 166
• Court: High Court
• Date: 25 November 1998

[1998] IEHC 166

THE HIGH COURT

No. 10614p/1991

DORAN v. DELANEY

BETWEEN

TERENCE DORAN & MAUREEN DORAN

PLAINTIFFS

AND

MICHAEL J. DELANEY PRACTISING UNDER THE STYLE AND TITLE OF MICHAEL J. DELANEY & COMPANY AND MARTIN GREENE AND ELIZABETH GREENE AND JOSEPH F. MAGUIRE AND DELLA POWER PRACTISING UNDER THE STYLE AND TITLE OF JOSEPH MAGUIRE & COMPANY

DEFENDANTS

Citations:

FORD V WHITE & CO 1964 2 AER 755

MCGREGOR ON DAMAGES 16ED PARAS 817 & 216

LIESBOSCH DREDGER (OWNERS) V EDISON SS (OWNERS) 1933 AC 449

MOHAMMED ISSA EL SHEIKH AHMAD V ALI 1947 AC 414

MONARCH STEAMSHIP CO LTD V KARLSHAMNS OLJEFABRIKER 1949 AC 196

DODD PROPERTIES (KENT) V CANTERBURY CITY COUNCIL 1980 1 WLR 433

PERRY V SIDNEY PHILLIPS & SON 1982 3 AER 702

QUINN V QUALITY HOMES LTD 1976–1977 ILRM 314

RIORDANS TRAVEL V ACRES 1979 ILRM 1

ROCHE V PEILOW UNREP CARROLL 8.7.1986 1986/8/1643

Synopsis

Damages

Assessment of damages; sale of land; defective title in portion of the property sold; misrepresentation; purchasers induced to enter into a contract for sale of land by map which misstated extent of lands; inaccurate replies to requisitions on title; whether vendors liable to the plaintiffs; whether distinction between measure of damages for breach of contract and measure of damages for tort should be applied; whether impecuniosity of plaintiff must be considered in relation to real losses Held: General and special damages awarded (High Court: Geoghegan J 25/11/1998) - [1999] 1 IR 303 - [1999] 1 ILRM 225

Doran v Delaney

Loss was not too remote if it could have been reasonably within the contemplation of the parties at the time of entering into the contract (in the case of breach of contract) or at the time of making the misrepresentation or committing the breach of duty (in the case of tort). The plaintiffs had acted perfectly reasonably after the debacle had occurred and the losses flowing from their having to salvage the situation as best they could due to their inability to raise alternative funds to put them back in the position which they would have been but for the breaches of duty and misrepresentations were all reasonably foreseeable losses. There was no legal justification for differentiating between the solicitors for the vendors and the other defendants in the measure of the financial loss recoverable by the plaintiffs. Total special damages of £192,198.56 would be awarded to the plaintiffs. In addition the High awarded of £10,000 in general damages against all of the defendants.

1 Judgment of Mr. Justice Geoghegan delivered the 25th day of November, 1998.

2 This is an action for damages arising out of a purchase by the Plaintiffs of a site for a dwellinghouse in circumstances where the Plaintiffs were unable to build due to a defective title in portion of the property sold. The First named Defendant, Michael J. Delaney, was the Solicitor for the Plaintiffs on the purchase. The Second and Third named Defendants, Martin Greene and Elizabeth Greene, were the vendors and the Fourth and Fifth named Defendants; Joseph F. Maguire and Delia Power, were the Solicitors for the vendors.

3 The action came on for hearing before Hamilton P. (as he then was) on the 7th and 8th October, 1993. The hearing was further resumed on the 5th October, 1994. It was decided at the hearing that only liability would be determined and that in the event of liability on the part of one or more of the Defendants being found, the damages would be assessed on a later date. In a judgment of Hamilton C.J. (as he had then become) on the 12th September, 1995 he found the First named Defendant to be in breach of a duty of care owed to the Plaintiffs and he also found the vendors, Martin Greene and Elizabeth Greene, to be liable for breach of duty of care to the Plaintiffs including negligent misrepresentation. The Chief Justice absolved the Fourth and Fifth named Defendants, i.e., the Solicitors for the vendors, from all liability and dismissed the action as against them.

4 The Plaintiffs appealed to the Supreme Court against the finding of no liability on the part of the Fourth and Fifth named Defendants and the appeal was allowed. The High Court judgment is reported in 1996 1 I.L.R.M. 490 and the judgments in the Supreme Court of Keane J. and Barron J. (Barrington J. concurring) are to be found in 1998 2 I.L.R.M. 1.

5 The background facts are as follows. The Second and Third named Defendants who are the vendors had themselves started to build a house on the site in question pursuant to a planning permission which they had obtained from Wicklow County Council. They fell into dispute with an adjoining owner, a Mrs. McKimm, who alleged encroachment. Building work ceased and it was decided to apply for planning permission for a smaller house on the site and sell on the land with the benefit of that permission. The map accompanying the planning application wrongly included an area of ground measuring 54 square metres which was in the possession of Mrs. McKimm. This small piece of ground was vital for providing access to the builders in order to build a house. None of this dispute was communicated to the Plaintiffs on their purchase from the vendors and in fact the Plaintiffs were shown a map by Southern Estates Limited, the selling agents acting on behalf of the vendors, and were told that the maps represented the correct boundaries. The Plaintiffs were never told about Mrs. McKimm's claim. On advice, however, the Plaintiffs did request that the boundary be staked out but they were told by their own Solicitor that this was unnecessary and that the matter could be dealt with by inserting a clause in the contract requiring the production of an ordnance survey map which would delineate the property. However any such clause in the contract was itself objected to by the vendors on the grounds that the entire of the property comprised in the folio was being sold. The First named Defendant agreed to the deletion of the special condition without telling the Plaintiffs. A contract was entered into on the 12th September, 1990 for the sale of the property for the sum of £25,000.

6 In response to a requisition on title which asked whether there was any dispute with adjoining owners in relation to party walls or fences, the Fourth and ??? named Defendants replied "vendor says no". In response to a further requisition as to whether there was any litigation pending or threatened in relation to the property or whether any adverse claim had been made in respect of it, the Fourth and Fifth named Defendants replied "vendor says none". The Fifth named Defendant had apparently known of the dispute with Mrs. McKimm but had been informed that it had been settled but she had made no enquiries as to the terms of the settlement.

7 The sale was completed on the 9th October, 1990 and the Plaintiffs commenced building operations on the 12th October, 1990 having engaged Ballymore Homes as builders. The Solicitors for Mrs. McKimm wrote to the builders informing them that they had encroached upon her land and demanded that they should desist from doing so. The small triangular area of land which Mrs. McKimm was claiming was vital to the building operations as the vehicles were unable to achieve access without it. There was an alternative route but that was via a private right of way and no permission from the owners was forthcoming. After exhaustive and unsuccessful attempts to resolve the boundary problem with Mrs. McKimm, the Plaintiffs were forced to resell the property for a sum of £20,000. At this stage they owed the builders over £18,000.

8 The Plaintiffs have claimed from all the Defendants the sum of £232,623.22 plus general damages.

9 The sum claimed for special damages comprises effectively eight-items. These are:-

10 1. Loss of family home.

11 2. Expenses incurred incidental to land purchase and sale.

12 3. The amount owing to Ballymore Homes Limited, the builder.

13 4. Loss of earnings by the Plaintiffs due to time spent resolving the difficulties.

14 5. Loss of tax relief on the mortgage payments in that by reason of what happened the Plaintiffs have been living in rented accommodation.

15 6. Reinstatement expenses if a family home of equivalent value is now purchased.

16 7. Medical expenses.

17 8. Miscellaneous expenses such as travel, telephones etc.

18 The claim for loss of earnings has been properly abandoned at the hearing as being too remote.

19 In order properly to assess the damages it is necessary to consider first what the precise basis of liability of each Defendant is. In doing so I will adopt the order followed by the Chief Justice in his judgment in the High Court and deal first with the liability of the vendors, the Greenes.

20 The Chief Justice found the vendors to be liable to the Plaintiffs on a number of different grounds. These can be summarised as follows:-

21 1. Having regard to the fact that the planning map was being shown to the Plaintiffs as representing the boundary of the property sold and having regard to the then knowledge of the vendors as to Mrs. McKimm's claim, the vendors owed a duty to the Plaintiffs to inform them of Mrs. McKimm's claim to ownership of portion of the property being sold and that in failing to do so they were in breach of that duty.

22 2. The vendors made a negligent and therefore actionable misrepresentation to the Plaintiffs in indicating to the Plaintiffs in their replies to the requisitions on title that there was no dispute with regard to the boundaries and that there was no litigation pending or threatening in relation to the property or any part thereof and that no adverse claim thereto had been made by any person.

23 3. The vendors had negligently represented to the Plaintiffs that the property shown on the map produced to them by Southern Estates Limited represented the property in sale and that it included the...