Hand v Greaney

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 15 December 2004
• Neutral Citation: [2004] IEHC 391
• Docket Number: [2004]IEHC 391
• Court: High Court
• Date: 15 December 2004

[2004] IEHC 391

THE HIGH COURT

[2004]IEHC 391

[2004 No. 153 S/P]

HAND v. GREANEY

IN THE MATTER OF THE VENDOR AND PURCHASER ACT, 1874 AND IN THE MATTER OF SECTION 7 THEREOF AND IN THE MATTER OF THE RULES OF THE SUPERIOR COURTS AND RULE 7 THEREOF AND IN THE MATTER OF AN AGREEMENT MADE 22 ND DAY OF SEPTEMBER, 2003

BETWEEN MARTIN HAND OF THE FIRST PART AND WILLIAM GREANEY OF THE SECOND PART

BETWEEN

MARTIN HAND

PLANITIFF

AND

WILLIAM GREANEY

DEFENDANT

Citations:

O'CONNOR V COADY UNREP CARROLL 12.11.2003 2003/43/10305

O'CONNOR V COADY UNREP SUPREME 21.10.2004

ABERFOYLE PLANTATION V CHENG 1960 AC 115

MALONEY V ELF INVESTMENTS LTD 1979 ILRM 253

CREAN V DRINAN 1983 ILRM 82

Synopsis:

CONTRACT

Sale of land

Conditions of sale - Special conditions - Impossibility of performance - Planning permission refused - Conditional contracts - Whether waiver of special condition possible - Whether purchaser aware contract was being treated at an end — O'Connor v Coady [2004] 3 I.R. 271 applied - Real Property Vendors and Purchasers Act 1874 (37 & 38 Vict, c 78) - Held that contract ended by notice from vendor

(2004/153SP - Clarke J - 15/12/2004) [2004] IEHC 391

Hand v Greaney

The plaintiff had entered into a contract of sale with the defendant regarding the sale of lands. As part of the contract it was stipulated that the purchaser was to obtain planning permission for the lands. The local authority granted planning permission but this was refused by An Bord Pleanála on appeal. Thereafter the vendor (the plaintiff) returned the deposit together with interest accrued and rescinded the contract for sale. The vendor maintained that planning permission was a fundamental term, this condition could not now be complied with and the contract stood discharged by operation of the doctrine of frustration. On the other hand the purchaser maintained that it had the right to waive the planning clause and could elect to go ahead with the contract without the benefit of planning permission.

Held by Clarke J in determining the following issues. The contract was stated to be conditional upon the obtaining of a grant of planning permission on foot of a specified planning register reference number. When An Bord Pleanála refused permission on this particular application the condition regarding planning permission became incapable of being fulfilled. As from the date of refusal by An Bord Pleanála the vendor was entitled to treat the contract as at least voidable and had then issued the purchaser with notification to that effect. There was nothing of the facts of the case upon which it could be said that the vendor had treated the contract as still in being. On foot of the notification to the purchaser, the contract of sale had come to an end.

Reporter: R.F.

JUDGMENT of

Mr. Justice Clarke

1 delivered the 15th day of December, 2004.

2 In these proceedings the plaintiff seeks a determination by the court of a series of questions relating to the current status of a contract for the sale of lands dated 22^nd September 2001 between the plaintiff of the one part and the defendant (in trust) of the other part. The plaintiff sold in his capacity as personal representative of the estate of the late Ann Kearney. In the relevant contract it was agreed that certain lands in County Offaly were to be sold by the plaintiff in his capacity as such personal representative to the defendant for a sum of €2,850,000. The agreement was subject, inter alia, to certain clauses and conditions relating to planning permission the interpretation and application of which form the basis of the dispute between the parties which the court is now required to resolve.

3 It is appropriate, therefore, to set out in full the relevant clauses which are contained in the special conditions to that contract.

"7. This sale is strictly subject and conditional, to the vendor obtaining a Grant of full Planning Permission for 93 detached two storey dwelling houses, from Offaly County Council on foot of planning permission planning register reference number PL2/02/470, which said application for such planning permission has been applied for to date via a joint application between Golden Vale Marts Limited and Bridie Lee. Upon the said grant of planning permission issuing from Offaly County Council pertaining to the lands the subject matter of this sale, this sale shall be completed 14 days thereafter and/or 14 days subsequent to the issue of the original grant of probate of the estate of the late Annie Kearney deceased whichever is the latest. Once the said grant of planning permission has issued it is then the responsibility of the purchaser to comply with any/all conditions attached thereto, insofar as it relates to that portion of the lands the subject matter of this sale, and duly comprised in part of Folio 8649 of the Register of County Kings AND also in conjunction with the owners of the neighbouring lands duly owned by Golden Vale Marts Limited in relation to (a) the common entrance, (b) the roundabout and (c) the common services pertaining to this entire development on foot on the entire grant of planning permission planning register reference number PL2/02/470. In that respect the vendor herein must enter into an agreement with the owner/developer of the adjoining neighbouring lands duly owned at present by Golden Vale Mart Limited in relation to the main access road (i.e. the common entrance) roundabout and common/work services affecting the boundaries of each of the respective properties."

They are as follows:-

19. The purchaser shall not be obliged to close until:-

4 (a) the final grant of permission has issued from the local authority and An Bord Pleanála satisfactorily in all respects to the purchaser in his absolute discretion and particularly as regards compliance with the section schedule to planning permission reference PL2/02/470 being requirements of the local authority and approval required to be lodged before any development can commence and any other matter.

5 (b) the vendor shall make all necessary arrangements as per the amendments to condition 7 herein to agree with Golden Vale Marts Limited arrangements satisfactory to the purchaser in his absolute discretion in relation to the services to be constructed for the joint benefit of Golden Vale Marts Limited and the vendor. The purchaser shall be advised of these arrangements as they progress and shall be notified of the arrangements prior to any final agreement being concluded between the vendor and Golden Vale Marts Limited regarding the provision of the services necessary to the development of the lands in sale and adjoining lands of Golden Vale Marts Limited. 21. In the event that conditions 19(a) or 19(b) above are not met to the satisfaction of the purchaser then and in that case the deposit will be returned immediately with interest accruing to the purchaser. If the purchaser confirms that conditions 19(a) and 19(b) are met to his satisfaction then the sale will close not later than 21 days following on the grant of satisfactory permission and conclusion of an agreement with Golden Vale Marts Limited and the issuing of a grant of probate to the estate of Annie Kearney, deceased, whichever event is the later."

6 The only other material provision to be found in the special conditions is clause 6 which provides that the sale is subject to a grant of probate pertaining to the estate of the late Annie Kearney deceased being extracted as soon as possible.

7 As appears from the determination of An Bord Pleanála proved in evidence a notification of a decision to grant planning permission by the local authority for a development subject to 33 conditions was issued by the planning authority per order dated 17^th July, 2003.

8 Thereafter a third party appeal was brought to the planning board as a result of which the Board decided to refuse permission for reasons which are not material to the issues which I have to decide. The factual situation which gives rise to these proceedings emerged in the course of correspondence which passed between the parties subsequent to that refusal of An Bord Pleanála which was made on 17^thDecember, 2003.

9 On 16^th January, 2004 the vendor's solicitors wrote to the purchaser's solicitors referring to the then recent decision of An Bord Pleanála to refuse planning permission and went on to state as follows:-

"And with particular reference to special conditions 7, and 19(a) of the contract of sale I now presume that special condition 21 of the said contract for sale will now be invoked".

10 The purchaser's solicitors sent a holding reply on 19^thJanuary with a more detailed holding reply on 21^st which concluded as follows:-

"Should our client elect to proceed you might indicate to us what the likely closing date would be. Obviously he has to consider the position carefully not only from a planning point of view but also from a bankable point of view".

11 By letter of 4^th February, 2004 the vendor's solicitors returned the deposit together with interest accrued thereon and gave as the reason for so doing "the fact that on 17^thDecember, 2003 last An Bord Pleanála refused planning permission for this development; because of this our client is now invoking special condition 21 of the contract for sale by returning to your client the entire deposit along with all interest thereon, thus...