Mary Egan and Paul Barron v Noel Thomas Richard Heatley

• Jurisdiction: Ireland
• Judge: Mr. Justice Murray
• Judgment Date: 14 December 2020
• Neutral Citation: [2020] IECA 354
• Court: Court of Appeal (Ireland)
• Docket Number: Court of Appeal Record No. 2019/343

Between:

Mary Egan and Paul Barron

Plaintiffs/Respondents

and

Noel Thomas Richard Heatley

Defendants/Appellants

[2020] IECA 354

Haughton J.

Murray J.

Collins J.

Court of Appeal Record No. 2019/343

High Court Record No. 2017/7745P

THE COURT OF APPEAL

CIVIL

Contract – Specific performance – Damages – Respondents seeking specific performance, or damages in lieu of specific performance, of a contract for the sale and purchase of a serviced site – Whether the appellant was induced to make the contract by a misrepresentation of fact

Facts: The judgment and order of the High Court (Allen J) the subject of this appeal to the Court of Appeal resulted in an award of €77,435.77 to the first plaintiff/respondent, Ms Egan, by way of damages in lieu of specific performance of a contract for the sale of land. The defendant/appellant, Mr Heatley, the vendor under the contract, contended that the trial Judge erred: (i) in deciding that statements allegedly made by the second plaintiff/respondent, Mr Barron (the admitted agent of the first), before and at the time of the execution of the agreement that insurance existed covering the activity of contractors on the property from 3 November to 15 December 2016, and that that insurance would be produced before completion, did not afford a basis for rescinding the contract; (ii) in deciding that the defendant lost any entitlement he might otherwise have had to rescind the contract by purporting to forfeit the deposit; (iii) in exercising his discretion to grant the first plaintiff relief by way of damages in lieu of specific performance notwithstanding the misrepresentation and/or reliance on concocted documents in support of the claim; and (iv) in the manner in which damages in lieu were determined.

Held by Murray J that the plaintiffs had failed to obtain relief consequent upon their contract with the defendant, and the defendant had failed to establish that he was entitled to rescind the contract for misrepresentation or to damages for such misrepresentation. Murray J held that the defendant also failed in the High Court in his action for assault, but the plaintiffs were found by the trial Judge to have misled the defendant in respect of the availability of Mr Rodgers’ insurance, and they were found to have behaved improperly in the advancing of a claim grounded on fabricated documents.

Murray J held that it was his provisional view that the costs of the High Court proceedings should be left as directed by the trial Judge; although that order was made by him in a context in which he awarded damages in lieu to the first plaintiff, it properly reflected the fact that that plaintiff succeeded in her claim that there was a binding and enforceable contract between the parties, and that the defendant both failed to justify his failure to complete that contract, failed to obtain damages for misrepresentation and failed in his action for assault. The Court noted that in awarding the first plaintiff only two thirds of the costs of two days and excluding the costs of complying with discovery, the trial Judge reflected his concerns in relation to the use of concocted documentation. Insofar as the costs of the appeal were concerned, Murray J held that neither party was entirely successful each succeeding and each failing on one of the two issues in the case – the misrepresentation claim and the claim for damages. It was Murray J’s provisional view that no order should be made in respect of the costs of the appeal.

Appeal allowed.

NO REDACTION NEEDED

JUDGMENT of Mr. Justice Murray delivered on the 14th day of December 2020

Background

1 . The judgment and order of Allen J. the subject of this appeal resulted in an award of €77,435.77 to the first named plaintiff by way of damages in lieu of specific performance of a contract for the sale of land. The defendant, the vendor under the contract, contends that the trial Judge erred:

• (i) In deciding that statements allegedly made by the second named plaintiff (the admitted agent of the first) before and at the time of the execution of the agreement that insurance existed covering the activity of contractors on the property from November 3 to December 15 2016, and that that insurance would be produced before completion, did not afford a basis for rescinding the contract;

• (ii) In deciding that the defendant lost any entitlement he might otherwise have had to rescind the contract by purporting to forfeit the deposit;

• (iii) In exercising his discretion to grant the first named plaintiff relief by way of damages in lieu of specific performance notwithstanding the misrepresentation and/or reliance on concocted documents in support of the claim;

• (iv) In the manner in which damages in lieu were determined.

2 . The property in question formed part of a larger parcel of land owned by the defendant at The Woodlands, Burkeen Hall in Wicklow Town on which he proposed to construct thirty-five homes. The work was to be done by Wicklow Cosy Homes Limited, a company controlled by the defendant and a business partner. He also decided to sell six sites at the development to purchasers wishing to design and construct their own homes. In 2015 the plaintiffs (then living at a property owned by them at Rose Hill Close, in Wicklow Town) were introduced to the defendant by the latter's solicitor, Fachtna Whittle. The parties verbally agreed a purchase price of €85,000 for Site Four, The Woodlands. In August 2016, with the consent of the defendant, the plaintiffs proceeded to seek planning permission for the construction of a four bedroomed house on the property. The permission issued that October. They engaged a Mr. Ciaran Rodgers to construct the house, the arrangement being that he would procure a pre-framed timber building from a Northern Irish company, QTF Limited. At the end of October 2016 the plaintiffs sold their home at Rose Hill Close and moved into rented accommodation in the area. According to the defendant, it was not possible to immediately convey the site at Burkeen Hall to the plaintiffs due to difficulties surrounding the formation of a management company, which was required to assume control of common areas in the development. Nonetheless, the plaintiffs were anxious to proceed with the works and sought the defendant's permission to enter on to the property for that purpose.

3 . That was the context in which the plaintiffs and Mr. Rodgers were permitted on to the site before a contract for the sale of the land had been executed, and in which work began on November 4. This followed a meeting on November 2 attended by the plaintiffs, the defendant and Mr. Whittle at which (it was common case) Mr. Barron said that Mr. Rodgers had insurance. The insurance to which he referred, Mr. Barron said in evidence, was with AXA in Northern Ireland and comprised a builder's policy with £5 million public liability cover. Mr. Barron (who is an architect) gave evidence at one point that he had seen evidence of Mr. Rodgers' insurance in the context of other projects in which both had been involved, later saying that Mr. Rogers told him that the policy had been renewed in October 2016. According to Mr. Barron, Mr. Heatley said at the meeting that he wanted cover of over €6.4 million, although this was not accepted by the trial Judge. Mr. Barron said that he asked Mr. Rodgers after the meeting to arrange insurance at that level, and that he said that he would see if he could do so.

4 . It was Mr. Barron's evidence that this was all that was said at this meeting about Mr. Rodger's insurance. The defendant, on the other hand, said that it was agreed that Mr. Rodgers would furnish a copy of his insurance immediately and that the defendant was to be indemnified thereunder, but this was not accepted by Mr. Barron. The defendant's version was corroborated by a note of the meeting taken by Mr. Whittle, and by Mr. Whittle's evidence to the Court. Mr. Barron, Mr. Whittle said, agreed at this meeting to drop a copy of the insurance in to him. Mr. Whittle's contemporaneous note read as follows:

‘ Insurance – Ciaran Rogers is the builder for Mary Egan. He is to furnish a copy of his insurance to us immediately and Noel Heatley is to be indemnified [in handwriting] copy to be dropped in to me’.

5 . Mr. Rodgers' insurance was of immense concern to the defendant who was worried that, in the event of an accident on the site, he could face claims by the workmen employed by Mr. Rodgers. Over the following five weeks the defendant's evidence was that he repeatedly asked Mr. Rodgers to produce his insurance, but he did not do so. The defendant's evidence was that in response to these requests he was ‘ fobbed off’. On December 8 — by which time foundations had been laid and substructure constructed for the house — the defendant ordered Mr. Rodgers and Mr. Barron off the site. By then Mr. Rodgers had still not provided evidence of the requested insurance. That tipping point was reached when some of Mr. Rodgers' workmen were observed arriving on the site without personal protective equipment.

6 . Mr. Rodgers' removal from the property on December 8 resulted in an altercation that evening between the defendant and Mr. Barron in the course of which the defendant alleged he was assaulted. A claim to that effect brought by way of counterclaim in this case was dismissed by the trial Judge. That part of his decision has not been appealed.

7 . As the trial Judge put it in the course of his judgment, all of this resulted in an impasse. Mr. Rodgers had been working on the site for over four weeks and the plaintiffs by then had a substructure on land for which they had no contract. The defendant had a substructure on one of his sites. Unless a way forward could be found, the plaintiffs would not be able to build their house and the defendant would be unable to sell his site.

8 . To that end, a second meeting...