Martin v O'Keeffe

• Jurisdiction: Ireland
• Judge: Ms. Justice Pilkington
• Judgment Date: 12 March 2021
• Neutral Citation: [2021] IEHC 855
• Court: High Court
• Docket Number: [Record No. 2018/8404 P]

Between

Conor Martin

Plaintiff

and

Ray O'Keeffe and Etna O'Keeffe

Defendants

[2021] IEHC 855

[Record No. 2018/8404 P]

THE HIGH COURT

JUDGMENT ofMs. Justice Pilkingtondelivered on the 12 ^th day of March 2021

1 . Owing to the effects of the global Covid-19 pandemic, in March 2020 the government increased restrictions on public gatherings with a view to containing the spread of the virus. Arising from these matters, on March 16, the President of the High Court issued a direction adjourning certain High Court proceedings. This case was amongst those adjourned.

2 . Accordingly, whilst this case was heard initially over four days in February 2020, the case was then adjourned to seek a further hearing date as it had exceeded the time allocated for its hearing. It then resumed (hearing one additional witness, a valuer Mr. Younge), in late October 2020.

3 . This proceeding involves an action for specific performance in respect of a contract for the exercise of an option agreement. The plaintiff claims that the contract was entered into on the 25 ^th day of May 2016 in respect of a premises known as ALL THAT AND THOSE the premises known as the Beach Tavern situate at 7/9, Bath Street, Irishtown, in the County of Dublin (‘the Beach Tavern premises’ or ‘the premises’) for the price or consideration of €625,000.

4 . In his evidence the valuer Mr. Younge (of John P. Younge, Auctioneer and Valuation Surveyor) describes the premises as an imposing three storey end of terrace 7-day licensed premises, with part two storey and part single storey rear extensions with extensive return frontage to Barrack Lane with double gate entrance to a back yard, smoking patio with access/egress onto this side lane. In his report dated 26 ^th day of November 2019, Mr. Younge values the premises to be “in the order of €800,000”.

5 . As Mr. Younge readily conceded at the time he gave his evidence, in the present climate determining its value might prove more problematic.

6 . In any event the Plenary Summons issued on 24 September 2018. It was suggested there was some difficulty in effecting service, but in any event both defendants had been served by 22 November 2018 (they are husband and wife).

7 . The next procedural step was a motion brought by the defendants to vacate a lis pendens that had been registered against the property by the plaintiff's solicitor consequent upon the issue of these proceedings.

8 . That application was heard in March 2019 pursuant to a Notice of Motion which was issued on 29 January 2019 whereby the defendants sought an Order pursuant to s.123 of the Land and Conveyancing Law Reform Act 2009 (“the 2009 Act”) seeking the vacation of that lis pendens together with certain other consequential orders and reliefs (‘the lis pendens application’).

9 . On 9 April 2019 I delivered an ex tempore judgment in respect of the lis pendens application in which, in summary, I took the view that as proceedings had just issued, it would be inappropriate at that stage to accede to the relief(s) sought by the defendants. In the circumstances, I considered it important that a strict timetable of pleadings be agreed between the parties and that is what occurred. I also retained seisin of the proceedings.

10 . Within the lis pendens application the first named defendant swore an affidavit on 29 January 2019, the plaintiff to these proceedings on 13 March 2019 and a Mr. Rory Browne on 14 day of March 2019. I will refer to some of these matters subsequently.

11 . The Statement of Claim was delivered on 17 day of April 2019. The following matters are pleaded:

• (a) by an agreement made on 24 ^th August 2015 between the defendants as landlords and Ducas Hospitality Management Limited (“Ducas”) as tenant, the defendants agreed to let the Bath Street premises at a rent of €400 per week;

• (b) certain terms and conditions were attached to that agreement; the specific special condition particularly invoked is Clause 10 whereby the defendants agreed to provide the plaintiff with an option to purchase. This is considered in detail below;

• (c) on 25 day of May 2016, within the first year of the tenancy at a designated location comprising the Alexander Hotel, the plaintiff pleads that he exercised the option (orally) by informing the first named defendant and his agent (Rory Browne) then of Morrisseys Auctioneers and Estate Agents that he was doing so and would be purchasing the premises in his own name;

• (d) it is pleaded that the exercise of the option is evidenced by an e-mail from Rory Browne to the plaintiff on 20 May 2016. It is pleaded that within this email the first named defendant wrongfully sought to make the exercise of the option subject to a number of additional conditions relating to the terms of the tenancy agreement;

• (e) thereafter it is pleaded that the exercise of the option on 25 May 2016 constituted a contract between the defendants and the plaintiff whereby there was an agreement to purchase the premises for the consideration of €625,000;

• (f) the plaintiff pleads that in reliance upon his exercise of the option and with the consent of the defendant he thereafter made an application to Dublin City Council for planning permission to redevelop the premises, which was obtained on 16 January 2017;

• (g) it is pleaded that the defendants ignored efforts by the plaintiff, its servants or agents to complete the Contract of Sale and on or about 15 June 2017 the first named defendant unlawfully took possession of the premises and took steps to exclude the plaintiff from the premises including the changing of locks, alarm codes and such like. Thereafter it is contended that the first named defendant operated the licensed premises, passed himself off as the legal and beneficial owner and it is pleaded that he did so to frustrate the Contract of Sale. It is further pleaded that on 25 January 2017 the first named defendant let it be known that he was prepared to sell the premises to the plaintiff for the sum of €1m.

• (h) the plaintiff pleads that he suffered, as well as the absence of his bargain, certain loss and damage primarily consequential upon the application for planning permission. There is also a particular of loss styled “loss of bargain” opportunity;

• (i) in essence the claim is that the defendants failed, neglected or refused to complete the Contract of Sale and accordingly the claim for specific performance is advanced on that basis.

12 . The defence (delivered 18 April 2019) raises what are styled preliminary objections to the effect that the contract or its terms are not in accordance with s.51 of the 2009 Act, is unenforceable against the defendants, its enforcement against them inequitable, unjust and raises issues of inordinate and inexcusable delay. Within the defence it is pleaded that non-compliance by the plaintiff with the tenancy agreement renders any option to purchase within that lease void and of no legal effect.

13 . The reply delivered on 10 July 2019 is in essence a denial of all matters alleged against the plaintiff.

14 . One noteworthy feature of this case is that no particulars were raised and no discovery sought by either party.

The Documentation

15 . The first document is a Deed of Indenture and Assignment dated 26 July 2004 between Oliver Gleeson of the one part and Ray (otherwise Raymond) O'Keeffe and Etna O'Keeffe of the other part. Nothing turns upon this document. It merely confirms the sale, for the consideration of €1,300,000 for an estate in fee simple (there is the merger of certain leasehold and sub-leasehold interests). Within the same document there was also the assignment of the goodwill together with the publican's license in respect of the licensed premises. The registration in the Registry of Deeds is dated 1 March 2005. Both defendants therefore own the freehold of the premises.

16 . The next document is the Heads of Terms, in respect of the terms of a proposed lease, dated 2 March 2015. It is headed “Strictly without prejudice subject to contract/lease/contract/leased denied.” It is furnished by Mr. Rory Browne of Morrisseys Chartered Surveyors and addressed to Peter Morrissey solicitor in the same building. I understand that they are separate entities though there is some familial relationship between the two (Mr. Browne and Mr. Morrissey).

17 . In any event it sets out that the plaintiff, Ducas Hospitality Management Limited (‘ Ducas’), (described as “your client” and the first named defendant “our client”).

18 . The opening portion of the letter is as follows:

“Dear Peter,

I refer to the above and to instructions received from our client, to issue our Heads of Terms letters in respect of the intended sale of these licensed premises by way of a Lease with Purchase option to your client, Mr. Conor Martin, of Ducas Hospitality Management Limited.”

19 . The Heads of Terms “as agreed” are set out in some detail.

20 . The lease term is stated to be:

“four year term with the tenant agreeing to forego statutory rights of occupation under the Civil Law Amendments Act. [there is no statute of that name in respect of the foregoing of tenancy rights].

The tenant will enjoy the benefit of a purchase option throughout each year of the term of the lease as set out in Section 16 below.”

21 . The rent is stated as follows:

“Year 1 — €400 per week equating to €20,800 exclusive and Year 2–4 — €500 per week equating to €26,00 per annum exclusive.”

22 . There are other terms and conditions including that the tenant provide a Tax Clearance Certificate to the landlord and that the 7-day licence be transferred into the name of the tenant by means of an ad-interim transfer.

23 . Under the heading “Trading” it states:

“Tenants will furnish the landlord with detailed profit and loss account of the business annually, signed off by his accountant and which forms part of his annual returns...