Hannon and Others v BQ Investments
| Jurisdiction | Ireland |
| Judge | Miss Justice Laffoy |
| Judgment Date | 24 April 2009 |
| Neutral Citation | [2009] IEHC 191 |
| Court | High Court |
| Date | 24 April 2009 |
[2009] IEHC 191
THE HIGH COURT
BETWEEN
AND
ANALOG DEVICES BV & ORS v ZURICH INSURANCE CO & ANOR 2005 1 IR 274 2005 2 ILRM 131 2005/2/242 2005 IESC 12
INVESTORS COMPENSATION SCHEME LTD v WEST BROMWICH BUILDING SOCIETY (NO 1) 1998 1 WLR 896 1998 1 AER 98
DELANY EQUITY & THE LAW OF TRUSTS IN IRELAND 4ED 2007 636
CONTRACT
Terms
Sale of land - Conditions of sale - Special conditions - Interpretation - Contractual obligations - Dispute in relation to meaning of special condition - Whether defendant in breach of contract - Construction of special condition - Interpretation of special condition - Whether words should be given natural and ordinary meaning - Whether words in special condition clear - Whether defendant's contractual obligation suspended until pre-condition fulfilled - Whether any contractual liability on defendant - Necessary implication of condition - Whether meaning urged by the defendant would involve re-writing parties' bargain - Whether any breach of contract - Appropriate remedy - Analog Devices BV v Zurich Insurance Company [2005] IESC 12, [2005] 1 IR 274 and ICS v West Bromwich BS [1998] 1 WLR 896 considered - Damages in lieu of specific performance awarded (2004/7031P - Laffoy J - 24/4/2009) [2009] IEHC 191
Hannon v BQ Investments
Facts: the plaintiff sold development land to the defendant for the construction of student accommodation. It reserved to itself in the agreement for sale, by special condition, a right of way over the land sold. It sought an order for specific performance of the special condition and/or damages in lieu. It contended that the special condition required the defendant to construct a metalled road on the right of way for the benefit of the plaintiff forthwith. It contended that the defendant breached the agreement in failing to construct the road forthwith. The defendant contended that the duty crystallised only when the plaintiff had constructed football pitches and a clubhouse on the dominant tenement, which had not yet occurred.
Held by Ms Justice Laffoy in refusing to grant an order of specific performance and adjourning the proceedings for the purpose of determining the appropriate alternative relief that, to the extent that the special condition imposed an obligation on the defendant to construct a road, giving the words their ordinary and natural meaning, they did not provide that the defendant’s contractual liability to construct the road had not yet crystallised as there was no clubhouse on the dominant tenement. The words “for the use of the football pitches and the clubhouse” in the special condition were expressly connected with the reservation of the right of way in favour of the plaintiffs, not with the construction of the road. However, as the relief of specific performance was discretionary and as it would, in view of likely developments of the dominant tenement, be unnecessary, the more appropriate remedy would be damages.
Analog Devices v Zurich Insurance Co [2005] 1 IR 274 applied.
Reporter: P.C
Judgment of Miss Justice Laffoy delivered on the 24th day of April 2009 .
The plaintiffs sue in their capacity as trustees of Thomond Football Club (the Club). In that capacity they entered into an agreement for sale, which bears the date 22 nd December, 1998 (the Agreement for Sale), and was made between them, as vendors, and Paul O'Brien, a solicitor acting in trust, as purchaser, which has turned out to be a very contentious transaction. The Agreement for Sale related to part of the lands comprised in Folio 24105F of the Register of Freeholders, County Limerick, as depicted on the map annexed thereto and outlined in red and marked with the letter "B", which was stated to measure in area circa 8.76 acres (the sold lands). The purchase price was £330,000. Under the special conditions it was provided that the sale was subject to the purchaser obtaining acceptable planning permission within "the relevant period", as defined. There were special conditions in relation to the proposed development, what constituted an acceptable planning permission and the definition of "the relevant period". Nothing much turns on those special conditions, because an acceptable planning permission was granted by An Bord Pleanála on 17 th October, 2000 for the development of the sold lands as a student housing development of 238 apartments.
Under the heading "Exceptions and Reservations" in the special conditions it was provided that there would be granted to the plaintiffs a right of way to access the remaining part of their lands comprised on Folio 24105F (the retained lands) by the purchaser, and that the right of way would be marked on the Land Registry map for approval by the plaintiffs and that the purchaser would assent to same. There followed four special conditions, special conditions 8, 9, 10 and 11. In special condition 8 the purchaser agreed to provide "two suitable rugby playing pitches, levelled, top soiled and ready for seeding" on the retained lands, the suitability of the pitches to be agreed with an independent engineer. Special condition 9 provided that the purchaser would re-locate the existing flood lighting and ESB sub-station to the site of one of the new playing pitches to be decided upon by the plaintiffs.
The dispute which is the subject of these proceedings arises out of special condition 10, which provided as follows:
"There will be reserved in favour of the [plaintiffs] for the use of the football pitches and the clubhouse a right of way over the roadway having a width of six metres with a footpath on both sides and appropriate public lighting with the location of the said right of way to be decided upon by the Purchaser who will consult with the [plaintiffs] on the Planning Application with regard to the location of the said right of way."
No issue arises in these proceedings on special condition 11, under which a wayleave to connect into the services to be installed by the purchaser on the sold lands was to be granted by the purchaser to the plaintiffs.
The date of 22 nd December, 1998, which appeared on the Agreement for Sale, was inserted by Mr. O'Brien when, having executed it in trust, he returned it to D.J. O'Malley & Co., the plaintiffs' solicitors. The Agreement for Sale as executed by the plaintiffs was returned by D. J. O'Malley & Co., to the purchaser's solicitors on 25 th March, 1999. Accordingly, 25 th March, 1999 was the operative date of the Agreement for Sale. In the interim period between the execution of the Agreement for Sale by Mr. O'Brien and its execution by the plaintiffs, there was correspondence between the solicitors for the parties in relation to a number of issues, one of which related to the location of the right of way. What emerges from a letter of 28 th January, 1999 from the purchaser's solicitors to the plaintiffs' solicitors is that the purchaser could not identify the exact location of the right of way at that stage. However, a special condition in the terms of special condition 10 was suggested by the purchaser's solicitor. It may be, and the evidence is not clear on this point, that special condition 10 was inserted in consequence of that letter. In any event, nothing turns on when it was inserted, because it is common case that both sides were bound by special condition 10. The dispute between the parties relates to what it means.
The purchaser's planning permission having issued on 17 th October, 2000, the sale was due to be closed within four weeks of that date. However, a difficulty arose in that the purchaser needed additional land to provide an attenuation pond. That difficulty was ultimately resolved when the plaintiffs agreed to make available to the purchaser an additional two acres of land subject to the payment of an additional sum at a price pro-rata to the price in the Agreement for Sale. As I understand the position, the additional land, was separately transferred by the plaintiffs to the defendant subsequent to the completion of the sale of the sold lands.
That sale was completed on 21 st December, 2000. By a transfer of that date (the Transfer), the plaintiffs, in consideration of £330,000, transferred the lands described in the first schedule, being part of the lands comprised in Folio 24105F outlined in red on the map annexed thereto (which, for present purposes, I am assuming equated to the sold lands, although the area differs somewhat from the area referred to in the Agreement for Sale) to BQ Investments Limited in fee simple. I am also assuming that BQ Investments Limited subsequently became an unlimited company and corresponds to the defendant. There was excepted and reserved out of the transfer of the sold lands unto the plaintiffs the "Excepted Easements" as defined, which included the following:
"A right of way over the roads and footpaths now laid or at any time within the Perpetuity Period laid on in or under the Sold Land going to and from the Retained Lands or any part therof along the way coloured pink on the Plan."
I note that it was stated in a letter of 21 st November, 2000 from the purchaser's solicitors to the plaintiffs' solicitors that special conditions 10 and 11 had been dealt with in the third schedule to the draft deed of transfer which accompanied the letter. The third schedule to the executed transfer is a verbatim transposition of that draft.
After the closing of the sale, the plaintiffs were allowed to remain in possession of the sold land. As I understand it, the intention was that they would remain in possession until the defendant fulfilled its obligations under special conditions 8 and 9 of the...
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