Leggett v Crowley Court of Appeal
| Jurisdiction | Ireland |
| Judge | Ms. Justice Costello |
| Judgment Date | 22 January 2020 |
| Neutral Citation | [2020] IECA 3 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Record Number: 2019/213 |
| Date | 22 January 2020 |
[2020] IECA 3
Edwards J.
Costello J.
Noonan J.
Record Number: 2019/213
THE COURT OF APPEAL
CIVIL
Contract – Sale of land – Specific performance – Appellant seeking to appeal against the order for specific performance of a contract for the sale of land – Whether performance of the contract was impossible by virtue of the boundary dispute that existed in relation to the property
Facts: The appellant, Mr Crowley, purchased land known as Newbarn, Kilsallaghan, County Dublin, being the property comprised in Folio 49441F of the Register of Freeholders County Dublin, in 2002 and on 31 October 2002 he was registered as the full owner of the property. He provided the property as security in the form of a first legal charge for two loan facilities advanced to him by Bank of Scotland (Ireland) Ltd (BOSI) in May 2006 and March 2008. On 13 July 2006, BOSI was registered as the owner of the charge on the folio. The appellant defaulted in his obligations under the loan facilities. On 4 October 2012 solicitors for BOSI demanded repayment of the outstanding loans in the sum of €997,482.02. Subsequently, on 11 December 2012 they demanded possession of the property. On 20 December 2012 the appellant’s solicitors, Eamonn Greene & Company (Greenes), advised BOSI that the property was for sale following discussions the appellant had with the bank where he indicated that he would sell the property and use the proceeds of sale to pay down his outstanding indebtedness. The respondent, Mr Leggett, made an offer to purchase the property for the sum of €475,000 to the appellant’s auctioneer. The auctioneer accepted the respondent’s offer on behalf of the appellant. The purchase price was subsequently reduced by agreement to €460,000. A contract for sale was executed by the appellant in the presence of his solicitor on or about 24/25 February 2014, whereby he agreed to sell the property to the respondent for €460,000. The closing date fixed by the contract was 4 March 2014. The appellant failed to complete the sale and the respondent instituted proceedings seeking specific performance of the contract on 20 June 2014. On 10 April 2019, following a written judgment delivered on 27 March 2019, the High Court (O’Connor J) made an order that the appellant specifically perform the contract for the sale of the property and declined to order the payment of damages in lieu of specific performance. The appellant appealed to the Court of Appeal against the decision of the High Court on the grounds that performance of the contract was impossible by virtue of the boundary dispute that existed in relation to the property and/or that specific performance should be refused because of the alleged hardship which the appellant, his partner and his father would suffer if the contract was to be completed. At the hearing of the appeal, counsel for the appellant said that the sole issue in the case was whether damages should be awarded in lieu of specific performance.
Held by Costello J that the fact that there may be a dormant boundary dispute affecting the property for sale did not mean that specific performance of the contract should not be ordered on the grounds of impossibility. Costello J held that the appellant had not established as a matter of fact that the sale, by him, of his family home to the respondent would result in hardship such that a decree of specific performance of the contract should not be ordered. Similarly, Costello J held that no case was established that the appellant’s father would suffer a hardship arising from the sale of the family home such that an award of specific performance of the contract should be refused. Costello J held that the appellant had not established that the trial judge erred in law by making an order for specific performance of the contract of 25 February 2014, rather than awarding damages in lieu of specific performance.
Costello J held that the appeal would be refused and that the order of the High Court would be affirmed.
Appeal dismissed.
This is an appeal against the Order for specific performance of a contract for the sale of land known as Newbarn, Kilsallaghan, County Dublin, being the property comprised in Folio 49441F of the Register of Freeholders County Dublin (“the property”), for €460,000 by O'Connor J. on 10 April 2019 following a written judgment delivered on 27 March 2019, [2019] IEHC 182.
The appellant purchased the property in 2002 and on 31 October 2002 he was registered as the full owner of the property. He constructed a dwelling house on the lands where he resides with his partner and his father. The appellant was a builder and he provided the property as security in the form of a first legal charge for two loan facilities advanced to him by Bank of Scotland (Ireland) Limited (“BOSI”) in May 2006 and March 2008. On 13 July 2006, BOSI was registered as the owner of the charge on the folio.
Along with many others in the last decade, the appellant experienced significant financial difficulties and he defaulted in his obligations under the loan facilities. On 4 October 2012 solicitors for BOSI demanded repayment of the outstanding loans in the sum of €997,482.02. Subsequently, on 11 December 2012 they demanded possession of the property.
On 20 December 2012 the appellant's solicitors, Eamonn Greene & Company (“Greenes”), advised BOSI that the property was for sale following discussions the appellant had with the bank where he indicated that he would sell the property and use the proceeds of sale to pay down his outstanding indebtedness.
The respondent was anxious to purchase a home for his family. He viewed the property on two occasions in October 2013 and made an offer to purchase the property for the sum of €475,000 to the appellant's auctioneer. The auctioneer accepted the respondent's offer on behalf of the appellant. The purchase price was subsequently reduced by agreement to €460,000.
By letter dated 18 February 2014, Bank of Scotland plc (“BOS”) (with whom BOSI had merged in a cross-border merger) informed Greenes that the appellant must provide cleared funds in the sum of €445,887.20 to BOS before it would release the charge on the folio.
A contract for sale was executed by the appellant in the presence of his solicitor on or about 24/25 February 2014, whereby he agreed to sell the property to the respondent for €460,000. Greenes forwarded the executed contract to the respondent's then solicitors on 25 February 2014, together with a copy of the letter of BOS dated 18 February 2014. The closing date fixed by the contract was 4 March 2014.
In replies to requisitions on title, the appellant said that there was no litigation pending or threatened in relation to the property, no other person had any direct or indirect interest in the property and there was no boundary dispute in relation to the property. At the hearing the appellant claimed that there was a dispute regarding the boundary; there was outstanding litigation regarding the boundary dispute and the appellant asserted that his father, with whom he resided, had an interest in the property by reason of financial assistance he received from his father when he purchased the property. He did not clarify whether this interest was a charge securing a loan to the appellant or an equitable interest reflective of the father's contribution to the purchase of the property.
The appellant failed to complete the sale and the respondent instituted proceedings seeking specific performance of the contract on 20 June 2014.
Initially, the appellant maintained that he did not execute the contract for sale. Prior to the conclusion of the trial, that assertion was withdrawn. Secondly, he said that the court should not order specific performance as the contract was illegal and, therefore, unenforceable. He asserted that the appellant and the respondent agreed that the respondent would pay €525,000 for the property, €460,000 of which would be recorded as the purchase price in the contract for sale and the balance of €65,000 would be paid by the respondent directly to the appellant in the form of an “under the table” cash payment, thereby under-declaring the stamp duty payable on the transaction. Thirdly, it was argued that there was a boundary dispute in relation to the property. The appellant asserted that the house was, in fact, partially erected on the lands of an adjoining owner in respect of which there were outstanding proceedings. It was not possible, in the circumstances, to order specific performance of the contract as the court could not extinguish a third party interest in the land. Finally, it was said that the appellant, his partner and his father would each suffer hardship by virtue of losing the home in which they resided. In addition, the appellant's father would suffer hardship because he would not receive compensation for sums he provided to the appellant to assist in the purchase of the lands and in the construction of the house in 2002.
As noted above, the appellant did not maintain his argument that he did not execute the contract for sale. The trial judge rejected the allegation that the respondent had agreed to pay part of the consideration as an “under the...
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