Irish Life Assurance Plc v Olema Consultants
| Jurisdiction | Ireland |
| Court | High Court |
| Judge | Mr. Justice Richard Humphreys |
| Judgment Date | 28 July 2020 |
| Neutral Citation | [2020] IEHC 498 |
| Docket Number | [2016 No. 544 S] |
| Date | 28 July 2020 |
[2020] IEHC 498
Richard Humphreys
[2016 No. 544 S]
THE HIGH COURT
Summary judgment – Contract for sale – Interest – Plaintiff seeking summary judgment – Whether the 10% interest rate was penal
Facts: The plaintiff, Irish Life Assurance plc, by contract dated 27th August, 2015, agreed to sell to the defendant, Olema Consultants, the property at 72-74 Harcourt Street, Dublin 2, for €18.15 million, less a deposit of €1.815 million. The contract provided a closing date of six weeks, with an interest rate of 10% in default. On 29th September, 2015, the Property Registration Authority furnished an amended digital map of the property to the plaintiff. This was sent by email to the defendant on 2nd October, 2015. The defendant then sought a declaration of identity to ascertain that the property was within the boundaries of the amended file plan. By letter of 8th October, 2015, the plaintiff replied relying on special condition 6, to the effect that the purchaser shall be deemed to have satisfied itself as to the identity and location of the property from the title furnished. The defendant’s interpretation of that special condition was that this related to the file plan as available on the date of signature of the contract (hence furnishing amended title documents at a later date meant that the defendant was entitled to raise issues as to the identity and location of the property). A completion notice was served on 14th October, 2015 and the transaction was completed on 11th November, 2015. General condition 25(a) of the contract for sale provided that interest was payable on completion effected late “by reason of any default on the part of the Purchaser”. On 24th November, 2015 the plaintiff issued a letter of demand for €121,729.32 interest. It issued a further demand for the same amount under s. 570 of the Companies Act 2014 on 11th January, 2016. The plaintiff then decided that it had under-calculated the interest and issued a letter demanding €152,161.56 on 9th March, 2016. The summary summons issued on 24th March, 2016 and a motion for summary judgment was filed on 17th May, 2019. The defendant essentially advanced three defences: firstly, that it was not in default because the last-minute change in the file plan was due to an act of the Property Registration Authority rather than its own default; secondly, that the 10% interest rate was penal; and thirdly, an issue in relation to the computation of interest.
Held by Humphreys J that there was a reasonable likelihood that the defence arising from the doctrine of penal clauses would be held to be available to the defendant. Humphreys J held that there was a fair and reasonable prospect of contending that the 10% interest rate in this case was unenforceable as a penalty clause. Humphreys J held that the court is not obliged to limit the defences available to a defendant if adjourning the matter to a plenary hearing. That is an option which he did not propose to take under the circumstances, primarily because the issues were likely to be clarified one way or another when getting the more full evidence that would be available at a plenary hearing in a way that would amount to a more satisfactory resolution than would be arrived at if he were to attempt to determine such issues for all time on the very limited materials he had.
Humphreys J held that he would remit the action to a plenary hearing, on the basis of all defences that the defendant may wish to raise, and would direct the plaintiff to deliver a statement of claim within six weeks.
Action remitted to plenary hearing.
By contract dated 27th August, 2015, the plaintiff agreed to sell to the defendant the property at 72-74 Harcourt Street, Dublin 2, now the Iveagh Garden Hotel, for €18.15 million, less a deposit of €1.815 million. The contract provided a closing date of six weeks, with an interest rate of 10% in default. The document schedule setting out documents of title referenced the folio and file plan DN99062F.
On 29th September, 2015, a matter of days before the closing date, the Property Registration Authority furnished an amended digital map of the property to the plaintiff. This was sent by email to the defendant on 2nd October, 2015.
The defendant then sought a declaration of identity to ascertain that the property was within the boundaries of the amended file plan. By letter of 8th October, 2015, the plaintiff replied relying on special condition 6, to the effect that the purchaser shall be deemed to have satisfied itself as to the identity and location of the property from the title furnished. The defendant's interpretation of that special condition is that that related to the file plan as available on the date of signature of the contract (hence furnishing amended title documents at a later date meant that the defendant was entitled to raise issues as to the identity and location of the property).
A completion notice was served on 14th October, 2015 and the transaction was completed on 11th November, 2015.
General condition 25(a) of the contract for sale provides that interest is payable on completion effected late “by reason of any default on the part of the Purchaser.”
On 24th November, 2015 the plaintiff issued a letter of demand for €121,729.32 interest. It issued a further demand for the same amount under s. 570 of the Companies Act 2014 on 11th January, 2016. The plaintiff then decided that it had under-calculated the interest and issued a letter demanding €152,161.56 on 9th March, 2016.
The summary summons issued on 24th March, 2016 and a motion for summary judgment was filed on 17th May, 2019. I am now dealing with that motion and have received helpful submissions from Mr. Steven B. Byrne B.L. for the plaintiff and Mr. Angus Buttanshaw B.L. for the defendant.
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