Monica Kiely (nee Phelan) v Ronald Delaney and Patricia

JurisdictionIreland
JudgeMr. Justice John MacMenamin
Judgment Date14 March 2008
Neutral Citation[2008] IEHC 69
CourtHigh Court
Docket Number[No. 586 S.P./2005]
Date14 March 2008

[2008] IEHC 69

THE HIGH COURT

[No. 586 S.P./2005]
Kiely (Née Phelan) v Delaney
IN THE MATTER OF SECTION 9 OF THE VENDOR AND PURCHASER
ACT, 1874 (AS AMENDED)

BETWEEN

MONICA KIELY (NÉE PHELAN)
PLAINTIFF

AND

RONALD DELANEY AND PATRICIA DELANEY
DEFENDANTS

VENDOR & PURCHASER ACT 1874 S9

LAW SOCIETY GENERAL CONDITIONS OF SALE 1991 CONDITION 18

LAW SOCIETY GENERAL CONDITIONS OF SALE 1991 CONDITION 33

WYLIE IRISH CONVEYANCING LAW 2ED 1996 PARAS 15.27 - 15.35

SELKIRK v ROMAR INVESTMENTS LTD 1963 1 WLR 1415

SMITH v WALLACE 1895 1 CH 385

LYONS v THOMAS 1986 IR 666 1986/3/1134

WILLIAMS & ANOR v KENNEDY UNREP SUPREME 19.7.1993 1998/34/13323

GARDOM v LEE & ORS 1865 3 H & C 651

BAINES v TWEDDLE 1959 CH 679

MERRETT v SCHUSTER 1920 2 CH 240

JACKSON & HADEN'S CONTRACT, IN RE 1906 1 CH 412

KENNEDY v WRENNE 1981 1 ILRM 81

LAW SOCIETY GENERAL CONDITIONS OF SALE 1991 CONDITION 33(a)

LAW SOCIETY GENERAL CONDITIONS OF SALE 1991 CONDITION 33(b)

TERRY & WHITE'S CONTRACT, RE 1886 32 CH 14

ASHBURNER v SEWELL 1891 3 CH 405

MAWSON v FLETCHER LR 6 CH APP 91

CONTRACT LAW

Rescission

Contract for sale of land - Rescission clause - Delay - Delay in invoking rescission clause - Issue as to right of way - Arbitration - Purchaser misled into concluding that meaningful arbitration to take place - Avoidance of arbitration process - Whether power to rescind lost - Whether right of rescission exercised in reasonable manner - Whether right of rescission invoked without reasonable cause - Whether vendor acted arbitrarily or capriciously - Whether vendor recklessly entered into contract - Whether imprudence sufficient to constitute bar to rescission - Williams v Kennedy (Unrep, SC, 19/7/1993), Selkirk v Romar Investments Ltd [1963] 1 WLR 1415, Smith v Wallace (1895) 1 Ch 385, Lyons v Murphy [1986] IR 666 and Gardom v Lee (1865) 6 H&C 651 followed; Baines v Tweddle (1959) Ch 679, Merrett v Schuster (1920) Ch 240, In re Jackson and Haydens Contract (1906) Ch 412 and Kennedy v Wrenn [1981] ILRM 81 mentioned - Relief refused (2005/586SP - MacMenamin J - 14/3/2008) [2008] IEHC 69

Kiely v Delaney

: The plaintiff agreed to sell land to the defendants. An issue arose as to a right of way. The Folio stated that the land benefited from a right of way. The right of way provided acces to a main road. The defendant signed the agreement on the basis of the existence of the right of way. Subsequently, evidence suggested that the right of way did not exist and the defendant sought compensation. Arbitration between the parties was entered to resolve the matter but the attitude of the plaintiff to arbitration was impugned as uncooperative. The plaintiff sought to rescind the agreement and raised contractual conditions of the agreement.

Held by MacMenamin J. that the plaintiff engaged in extensive efforts to avoid the arbitration taking place. Her delay led to the defendants acting to their detriment. On the basis of her conduct, the plaintiff lost the right to rescind. A high degree of imprudence existed on the part her agents to induce bids at the auction, sufficient to be a bar for recission. The relief sought would be refused. The sale had not been rescinded by the plaintiff in accordance with the contract.

Reporter: E.F.

Mr. Justice John MacMenamin
1

By agreement in writing following an action dated 28th May, 2002, made between the plaintiff ('Ms. Kiely') as vendor and a Mr. James Gallagher in trust for the defendants (' the Delaneys') as purchasers, Ms. Kiely agreed to sell, and the Delaneys agreed to purchase, all that and those lands at Bettydoyle, Ballyboughal, in the County of Dublin, being land comprised from Folio number DN 3399 of the Register of Freeholders. The agreed purchase price of the lands in question was €€88,000. It was a term of the agreement that the sale would be completed by 25th June, 2002.

2

The said land was acquired by Ms. Kiely from her predecessor in title Desmond Byrne, now deceased, on the 26th of September, 2000. She had previously

2

rented the land from Desmond Byrne. It was stated in the Folio that the land benefited from an appurtenant right of way leading from a nearby road to the boundary of the lands.

3

Until the Delaney's solicitors, Messrs McGowans raised requisitions on title regarding this right of way, Ms. Kiely states that she believed that the land comprised in the folio benefited from the right of way. Ms. Kiely says she accessed the land thereby from the time she went into possession of the land as a tenant, and continued to do so up to the date of sale by auction. It appears from correspondence that Ms. Kiely was permitted to tarmacadam or gravel the path along the right of way.

4

The importance of this right of way is shown by the fact that it permitted access to the land in question from a main road. It is clearly of considerable importance as an amenity to the land.

5

It is asserted in affidavit sworn on behalf of the plaintiff that Mr Gallagher, a friend of the Delaneys who acted on their behalf at the auction, was informed by Thomas Potterton, Auctioneer, that the land could be accessed by the right of way. After the auction, Mr Gallagher says he specifically discussed the question of access both with the auctioneer and Mr Laurence Tierney, Ms. Kiely' solicitor. There is an apparent conflict of evidence as to whether he was shown both the folio and the file plan. This issue is dealt with later in this judgment. On the basis that access was by right of way as described on the folio, Mr Gallagher signed the sale agreement on behalf of the Delaneys.

6

As matters transpired, Ms. Kiely' predecessor, Desmond Byrne, on 21st May, 1998, had sold a plot of land which was then comprised in the same folio as the subject lands of the sale. Critically, this included a narrow strip of land which intervened between the boundary of the subject lands, and the right of way. While not creating a land lock, it unfortunately affected access. That plot of land now comprises Folio 123918F County Dublin. The registered owners thereof are Sean and Bernadette Boylan who are not parties to these proceedings.

7

In the 1998 sale to the Boylans, Desmond Byrne did not expressly except or reserve a grant of right of way for all purposes over the strip of land in that Instrument of Transfer. The original Folio, DN 3399 was not amended to reflect the transfer. It continued to describe the lands as previously comprised in the Folio, and so described at the auction, as benefiting from the appurtenant right of way.

8

While the contract was signed after auction on 28th May, 2002, it was only on 5th July of that year that Mr Tierney, the vendor' solicitor, wrote enclosing the file plan, which he had "now belatedly received". This was five weeks after the auction. In the course of that letter, Mr Tierney described the right of way as depicted in yellow. But at that point he did not mention the essential problem. On 8th of July, 2002, Messrs. McGowans, the Delaneys' solicitor replied, pointing out that the right of way did not extend to the subject lands. On 12th July, McGowans sent a draft declaration as to user of the right of way for completion by Ms. Kiely as vendor. On 15th August, 2002, McGowans wrote to say that the declaration which had by then come to hand referred only to the right of way as far as a gap, that is to say did not go as far as the boundary to the subject lands.

9

On 3rd September, 2002, McGowans wrote saying that the Delaneys would require a right to pass and re-pass over the Boylans' lands in order to gain access to the lands. Despite the fact that correspondence was initiated in July 2002, it was only on 13th December, 2002, that Ms. Kiely' solicitor acknowledged the problem which had obviously existed all along in relation to the gap in the right of way. On 20th December, 2002, McGowans wrote requesting that an approach to the Boylans be made. She was met with a request she says was unreasonable to persuade a third party to grant a right of way to the Boylan' at another unspecified location. There is no evidence on which to make a judgment as to whether Ms. Keily' position on this particular issue was reasonable or unreasonable.

10

The negotiations with the Boylan' broke down on 7th March, 2003, Ms. Kiely' solicitor wrote again. He again acknowledged the absence of the right of way and offered to refund the deposit of €8,500. On 14th April, 2003, the Delaney' solicitor served a completion notice. On 24th April, 2003, by then some eleven months after the contract, McGowans, relying Condition 33 (b) of the contract (quoted later) said that the purchaser would proceed, but would be claiming €25,000 in compensation. They asked Ms. Kiely' solicitor to propose three arbitrators if this sum was unacceptable. By letter of 15th May, 2003, Ms. Kiely' solicitor offered €5,000 compensation and said they would take their client' instructions in relation to an arbitrator. The financial offer was subsequently rejected. In the light of subsequent events it is most regrettable that matters were not either resolved by sensible negotiation. If this proved impossible, then the arbitration should have proceeded then.

11

Subsequently, the vendor/plaintiff, Ms Kiely, changed her solicitor. From 24th July 2003 onwards, McGowans were in correspondence with Messrs. Kilrane & Company, Ms. Kiely' present solicitors.

12

At some time during the course of 2003, Judge John Buckley, a former distinguished Judge of the Circuit Court and an acknowledged expert in this aspect of law, was appointed as an arbitrator by the parties. Lengthy but one sided correspondence took place on procedure.

13

On 13th October, 2003, the arbitrator wrote to Kilrane & Company complaining about their delay and the fact that they had not replied to his previous correspondence. He felt constrained to write...

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