Keating and Others v Bank of Ireland and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Barrington
• Judgment Date: 01 January 1983
• Neutral Citation: 1982 WJSC-HC 3024
• Docket Number: No. 8823P/1981
• Court: High Court
• Date: 01 January 1983

1982 WJSC-HC 3024

THE HIGH COURT

No. 8823P/1981

KEATING & ORS. v. BANK OF IRELAND, BRENTLAND & ORS.

BETWEEN:

VALENTINE KEATING, ARTHUR MOLLOY AND GEORGE ROE

Plaintiffs

and

THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND AND REGINALD A.C. BRENTLAND AND HEATHER R. KING

Defendants

1 JUDGMENT of Mr. Justice Barrington delivered the 30th day of July 1982

2 The issue to be decided in this case raises a net point on the interpretation of Condition No. 21 of the 1978 edition of the General Conditions of Sale of the Incorporated Law Society of Ireland.

3 The Plaintiffs are the purchasers named and the Defendants are the vendors named in a contract incorporating the general conditions referred to dated the 30th April 1981.

4 The contract was a contract for the sale of certain land by the Defendants to the Plaintiffs. The purchase price was £306,000. A deposit of £76,500 was paid. The sale was to have been closed on the 28th May 1981 on which date the balance of the purchase money amounting to £229,500 was to be paid and interest at the rate of 20% per annum was to be payable in the event of default.

5 The Plaintiffs claim they entered into the said sale on the faith of certain representations made to them by the Defendants or their agents. These representations they claim were false and misleading and they allege fraud against the Defendants. They also claim that the representations, even if innocent, entitle them to relief under Condition No. 21 of the contract.

6 In their statement of claim the Plaintiffs claim damages for misrepresentation and also specific performance of the contract with £100,000 abatement of the purchase price to compensate for error omission or mis-statement in the representations and negotiations leading up to the sale.

7 The Defendants deny all allegations of misrepresentation, whether fraudulent or innocent, in the negotiations leading up to the sale and counterclaim for specific performance of the original agreement in accordance with its terms together with interest on the balance of the purchase money at the rate of 20% from the 20th May 1981.

8 The parties have agreed to go to arbitration on the question of whether Condition No. 21 applies in the circumstances of the present case and if so on what amount of compensation, if any, the Plaintiffs are entitled to.

9 The issue before me raises the question of whether the closing of the sale must await the outcome of the arbitration or whether the vendors can force a closing of the sale against the purchasers' will prior to the outcome of the arbitration.

10 The case put forward on behalf of the vendors is that, both parties having in their pleadings sought specific performance of the contract, the contract should now be closed and that the question of whether there was any misrepresentation on the part of the vendors and if so, whether the purchasers are entitled to any compensation in respect of it, should be decided later.

11 The purchasers agree that they have sought specific performance of the contract but they say they have sought it with an abatement - which they measure at some £100,000 - in the amount of the purchase price. They say they cannot be forced to close until they know what the balance of the purchase price will be. They say that they cannot be forced to part with their money on the basis that they will get it back if successful in the arbitration proceedings.

12 On the 2nd October 1981 the vendors' solicitors wrote to the purchasers' solicitors a letter in which they suggested that the sale should be closed and that any disputed amounts claimed for compensation or for interest should be placed in joint deposit to await the outcome of the arbitration proceedings.

13 The Plaintiffs object to the suggestion of placing moneys on joint deposit because they say this would involve them, the Plaintiffs, in parting with the possession of very large sums of money which would be tied up pending the outcome of the arbitration proceedings. They say that, prior to closing the sale, they are entitled to know the amount of the claimed abatement in the purchase price and what the balance of the purchase money actually payable is.

14 In these circumstances it is necessary for the Court to decide what the formal rights of the parties are under Condition No. 21 in the events which have happened.

15 The issues which I have to decide are raised by three questions scheduled to the Order of Miss Justice Carroll in these proceedings dated the 9th November 1981. The questions are as follows:-

16 (a) Whether, if the Plaintiffs in this action are successful in making a claim for compensation under Condition No. 21 of the agreement dated the 30th day of April 1981 between the Plaintiffs and the Defendants in this action, they are entitled to receive a sum which may be awarded by way of compensation by way of an abatement of the purchase price under the said agreement.

17 (b) Whether the vendors are entitled to insist upon the closing of the sale before determination of the dispute as to whether the said Plaintiffs are entitled to...