Duffy v Ridley Properties Ltd

 
FREE EXCERPT

THE SUPREME COURT

Kearns J.

Macken J.

Finnegan J.

Neutral Citiation Number: [2008] IESC 23

040/2006 and 53/2006

BETWEEN
DONAL DUFFY
PLAINTIFF/RESPONDENT
and
RIDLEY PROPERTIES LIMITED
FIRST NAMED DEFENDANT/APPELLANT
and
EDWARD STOKES
SECOND NAMED DEFENDANT
Abstract:

Sale of land - Contract - Specific performance - Damages in lieu of specific performance - Assessment of damages - Damages for loss of bargain - Method of assessing valuation - Adjournment of case for further consideration - O. 36, r. 38 of the Rules of the Superior Courts

Facts: The first defendant vendor agreed to sell and the plaintiff agreed to purchase lands in Longford. The vendor issued a completion notice requiring completion of the purchase but the purchase was not completed in accordance with that notice. The purchaser contended that the completion notice was invalid and issued proceedings seeking specific performance of the agreement and damages in lieu of or in addition to specific performance. The vendor in its appeal contended inter alia that the trial judge erred in law in determining that the purchaser was entitled to an award of damages in lieu of specific performance. The vendor also contended that the trial judge erred in allowing the purchaser to adduce evidence of loss of bargain after the issues had been determined and in the assessment of damages.

Held by the Supreme Court (Finnegan J.; Kearns and Macken JJ concurring) in dismissing the appeal and affirming the order of the High Court, except for an adjustment to the award of damages, that the court had power to award damages where it refused to order specific performance. The trial judge was entitled under O. 36, r. 38 of the Rules of the Superior Courts to adjourn the case for further consideration. In assessing damages, the trial judge correctly had regard to the value of the lands at the date of judgment. The vendor was entitled to deduct from the damages costs, expenses and stamp duty which the purchaser would have paid had the transaction been completed.

Reporter: R.W.

1

Judgment of Mr Justice Finnegan delivered on the 30th day of April 2008

2

By an Agreement for Sale dated the 7th May 2003 made between Ridley Properties Limited ("the Vendor") of the one part and the respondent ("the Purchaser") of the other part the Vendor agreed to sell and the Purchaser agreed to purchase lands (hereinafter "the lands") being part of the lands comprised in Folio 12382 of the Register County Longford therein described as follows:

3

"ALL THAT AND THOSE part of the property of the townland of Edgesworthtown in the Barony of Ardagh and County of Longford being part of the property described in Folio 12382 of the Register of the County of Longford comprising 2.05 acres or thereabouts statute measure being the property shown shaded green on the attached map hereto held by the Vendor in fee simple. "

4

The Agreement for Sale was in the Law Society of Ireland form of General Conditions of Sale 2001 edition. The following Special Conditions are relevant:

5

"Special Condition 6

6

The Vendor shall grant a right of way to the Purchaser on completion over the access road at present being constructed by the Vendor. The grant of said right of way shall be incorporated into the transfer to the Purchaser. The access road shall be completed to the satisfaction of the Purchaser's architect prior to completion.

7

Special Condition 7

8

The Vendor shall arrange for a wall to be constructed on the area marked red on the map attached hereto prior to completion and the

9

construction of the said wall, the dimensions and materials used shall be agreed with the Purchaser's architect before the commencement of the said works. "

10

The map attached to the Agreement for Sale was a photocopy of the Land Registry map marked as indicated. It contained the following legend:

11

"Area shaded green 2.05 acres excl. public road".

12

The legend was signed Mary O'Hara B.E. M.I.E.I., Mary O'Hara and Co. Limited, Civil Engineering Consultants, Market Street, Ballaghaderreen. The purchase price was EUR520,000 with a deposit of EUR52,000. The closing date was two weeks from the date of the Agreement for Sale. The interest rate specified was 12% per annum.

13

On the 2nd September 2003 the Vendor issued a completion notice requiring completion of the purchase within a period of 28 days after service of the notice and making time of the essence. In circumstances which I will detail hereafter the purchase was not completed in accordance with that notice. The Vendor issued the present proceedings on the 25th November 2003 seeking specific performance of the Agreement for Sale and damages in lieu of or in addition to specific performance. In February 2004 the Purchaser became aware that an Agreement for Sale had been entered into in respect of the same or substantially the same lands between the Vendor and the second named defendant. That Agreement for Sale was dated the 10th November 2003. The second defendant completed that purchase on the morning of the 28th November 2003.

14

Progress of the Transaction between the Vendor and the Purchaser

15

Kilrane O'Callaghan & Company Solicitors acted for the Vendor and Collins Crowley & Company Solicitors for the Purchaser. Prior to returning the executed Agreement for Sale Collins Crowley & Company obtained confirmation that the wall mentioned in Special Condition 7 would be constructed by Mr Kane (the Purchaser of an adjoining plot) and that the right of way provided for in Special Condition 6 would be coloured and identified clearly on a map. Both Special Conditions were the subject of discussion between the parties after which it was agreed that the Purchaser would be free to connect to the access road when completed and that the wall was to be between two and three metres in height. On the 15th May 2003 the Purchaser's solicitors raised requisitions on title and submitted a draft transfer for approval. The Vendor's solicitors replied to the requisitions

16

on title on the 16th May 2003 and promised to forward a map showing the right of way duly marked in the coming days and this was done on the 21st May 2003. However the map furnished also contained a legend signed by Mary O'Hara which referred to the area to be transferred as 2.2 acres rather than 2.05 acres as provided for in the Agreement for Sale. By letter dated 3rd June 2003 the Purchaser's solicitors queried this. By letter dated 4th June 2003 the Vendor's solicitors explained that the measurement in the Agreement for Sale excluded the public roadway whereas the second map provided included one half the roadway adjoining the lands agreed to be sold. The Purchaser's solicitors submitted the map to an architect for approval and a digital survey was carried out by him. His conclusion was that the area as marked on the second map excluding the roadway comprised 1.95 acres and including one half the roadway 2.031 acres: there was also a difference in the boundaries along the western side of the lands agreed to be sold between the two maps. The Vendor's solicitors responded by letter dated 15th August 2003 in the following terms:

17

"The map attached to the contract entered into between our respective clients was for identification purposes only. The discrepancy arises from the fact that the map furnished with the contracts was a copy map only which resulted in the dimensions of the map being distorted.

18

The map furnished with a letter of 21st May is also a copy of the original map file plan which may explain the discrepancies. In any event, a digital survey of any property will reveal discrepancies as between the boundaries and the file plan and those on the ground.

19

Notwithstanding the above our client is prepared to accommodate your client insofar as the corner points of ‘plot C’ is concerned and amend the corner points accordingly. "

20

There was delay in replying to the letter of 15th August 2003 as the solicitor dealing with the matter in the Purchaser's solicitors' office was on holiday and on the 2nd September 2003 the notice to complete was served. On the 3rd September 2003 the Purchaser's solicitors did reply in the following terms:

21

"We refer to your letter of 15th August last in response to our letter of 4th July 2003 and confirm that we have forwarded a copy of the same to our clients architects

22

Messrs J.P. McHugh & Company and requested a further report from them as a matter of urgency.

23

Our client has, however, requested us to point out to you that Special Condition No. 7 of the contract for sale has not yet been complied with. We understand that the wall has been completed but does not comply with the condition as the dimensions and materials used in the wall were never agreed directly with the Purchaser and his architect J.P. McHugh & Company. The wall itself is not plastered. It is of varying heights ranging from metre to 1. 75 metres. There are also pillars constructed protruding on to the proposed site. The wall should be 3 metres high in order to conceal the rear of the adjoining premises.”

24

The Vendor's solicitors replied by letter dated 5th September 2005 in the following terms:

25

"We refer to yours of the 3rd September. The issue of the wall cannot hold up closing of this sale as this is the first time we have heard from your client in...

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