Neville Sons Ltd v Guardian Builders Ltd

• Jurisdiction: Ireland
• Judge: BLAYNEY J.
• Judgment Date: 01 January 1995
• Neutral Citation: [1994] IESC 4
• Docket Number: 351/89 & 27/90
• Court: Supreme Court
• Date: 01 January 1995

[1994] IESC 4

THE SUPREME COURT

Finlay C.J.

Blayney J.

Denham J.

351/89 & 27/90

NEVILLE & SONS LTD v. GUARDIAN BUILDERS LTD

WILLIAM NEVILLE AND SONS LIMITED

Plaintiff/Appellant

and

GUARDIAN BUILDERS LIMITED

Defendant/Respondent

Citations:

NATIONAL CARRIERS V PANALPINA LTD 1981 AC 675

Synopsis:

CONTRACT

Performance

Impossibility - Venture - Frustration - Defence - Proof - Failure - Agreement for development of land-locked site - Failure of landowner to provide builder with access to site - Whether any obligation to provide such access - (351/89 - Supreme Court - 27/7/94) 1995 1 ILRM 1

|William Neville & Sons Ltd. v. Guardian Builders Ltd.|

1 JUDGMENT delivered on the 27th day of July 1994 by BLAYNEY J.[NEM DISS]

2 On the 21st day of March 1987 the plaintiff/appellant and the defendant/respondent (to whom I shall refer respectively as Neville and Guardian) entered into a written agreement the essence of which was that Guardian gave Neville a licence to enter on a plot of land, owned by Guardian, known as "The Gables" situate in Stillorgan, Co. Dublin, for the purpose of building houses on it. The agreement (to which I will hereinafter refer as "the licence agreement") was subject to planning permission being obtained for the erection of not less than forty four houses on the plot (-to which I shall refer as the "licence plot") and it contained the normal provision that on Guardian executing assignments of houses to purchasers Neville would pay specified site fines. On the signing of the licence agreement Neville paid a deposit of £87,550.

3 The access to the licence plot was to be over a road opening on to the Stillorgan Road. This access road is the cause of the litigation between the parties.

4 Between the licence plot and the Stillorgan Road there was firstly, another plot, situate in the borough of Dun Laoghaire, and also owned by Guardian, and secondly, a small strip of land about 150 sq. metres in area and owned by Dublin County Council. The access road had to pass over this strip of land in order to join the Stillorgan Road.

5 Prior to entering into the licence agreement Guardian had already applied to Dublin County Council for planning permission for the erection of forty nine houses on the licence plot. This application was refused by Dublin County Council but on appeal An Bord Pleanala on the 5th May 1988 granted planning permission for the erection of not more than forty six houses on the licence plot. In the permission, the board stated that it was satisfied that Guardian could provide adequate access from Stillorgan Road to the licence plot.

6 It had been anticipated by Guardian as far back as 1981 that the access road could also serve the rear lands of what was then the South County Hotel and is now Parkes Hotel and the hotel in December 1983 obtained a planning permission for a car park at the rear of the hotel with an exit on to the access road. The position of this exit interfered with the planning permission for the development of the licence plot but the County Council insisted that it should not be changed without the consent of the hotel as they feared that, if it were, they might have to pay additional compensation to the hotel, and they were not prepared to sell to-Guardian the 150 sq. metre strip which it needed for the construction of the access road unless the position of the exit was left unchanged. As a result the implementation of the licence agreement was held up.

7 On the 23rd August 1988 Neville's solicitors wrote to Guardian's solicitors complaining of the delay and stating that unless the project commenced within seven days their client would institute proceedings for specific performance and damages. Guardian's solicitors responded by stating that his client would in the circumstances accept the notice of rescission of the licence agreement which Neville had served on the 29th July 1987, approximately one year previously. This allegation that the licence agreement was at an end because rescinded by Neville was not pursued.

8 The present proceedings were then instituted by Neville on the 7th October 1988 seeking specific performance and damages, and in the alternative damages for fraudulent misrepresentation together with certain declarations, rectification of the licence agreement and further and other relief. Guardian in its defence entered a series of defences both dealing with the claim for specific performance and the additional alternative claims, and pleaded inter alia that the performance of the contract had been frustrated.

9 The learned trial judge in the course of his judgment dismissed Neville's claim for alternative remedies on various grounds and dismissed its claim for specific performance on the express finding that the defence that the performance of the contract had been frustrated had been successfully made out.

10 Neville served a notice of appeal against the order of the learned trial judge in which it challenged not only the learned trial judge's decision that the performance of the contract had been rendered impossible by frustration but also a number of his other decisions in particular those dismissing Neville's alternative claims.

11 Guardian served a notice of cross-appeal confined to so much of the order of the learned trial judge as awarded to it, Guardian, against Neville only half of the costs incurred in the action.

12 At the hearing of this appeal, counsel on behalf of Neville withdrew all grounds of appeal other than those directed either to the findings of fact or of law supporting the learned trial judge's conclusion that the performance of the contract had been rendered impossible by frustration.

13 This therefore became the sole issue for determination on the hearing of this appeal, the cross-appeal by Guardian in regard to costs necessarily falling to be debated at a later stage depending upon the result of the appeal made by Neville.

14 In order to determine if the performance of the licence agreement was frustrated it is necessary first to see what was Guardian's obligation under the agreement since essentially it is the performance of its obligation that is alleged to have been frustrated and in order to do this it is necessary to construe the agreement.

15 The principal question that arises in construing the agreement is whether under its terms there was an obligation on Guardian to give Neville access to the licence plot or, in other words, whether Guardian had undertaken as part of the agreement that it would give Neville access to the plot over the access road which was to be constructed from the Stillorgan Road.

16 On behalf of Guardian it was submitted that they had not undertaken to do this. It was contended that the licence agreement was silent on this point; that in the licence agreement Guardian did not offer title to the small strip owned by the County Council, and that Neville knew that Guardian did not have title to it. In regard to this latter point, particular reliance was placed on a letter of the 13th March 1987 written by Guardian's solicitor to Neville's solicitor, before the execution of the licence agreement, in which reference was made to a map which showed that the 150 sq. metre strip between Guardian's property and the Stillorgan Road was in the ownership of the County Council.

17 I have no hesitation in rejecting Guardian's contentions on this issue. It seems to me to be quite clear that while Guardian did not at the time own the small strip over which the access road had to go, they nonetheless agreed to give access to Neville over it, no doubt being satisfied that they would be able to acquire title from the County Council to enable them to do this, since they had in March 1984 agreed terms with the County Council for the acquisition of the strip in question.

18 The licence agreement begins with the following two recitals:

19 (a) "The licensor is entitled to the development (as hereinafter defined) under a lease dated the 6th January 1938 for a term of 999 years from the 25th March 1935 subject to the annual rent of £15 and has agreed to grant to the licensee leave and licence to enter upon the development for the purpose of erecting buildings and carrying out works as hereinafter provided and has further agreed on the completion of such buildings and works as hereinafter mentioned to dispose of the sites (as hereinafter defined) in accordance with the within agreement to the purchasers nominated by the licensee.

20 (b) As consideration for the agreement by the licensor to grant leave and licence to the licensee to enter upon the development and to dispose of sites to purchasers as hereinafter provided the licensee has agreed to pay site fines to the licensor as hereinafter mentioned."

21 In clause (1) of the agreement "development" is defined as meaning "the land delineated in red on the plan annexed hereto together with the benefit of the right of way coloured yellow and green. The tenure to the said lands is as described in the second schedule hereto." What was coloured yellow and green on the plan was both the access road and the entire of the road throughout the proposed housing estate on the licence plot. Under clause 6 of the agreement, and clause 1of the addendum to the agreement, both the access road and the entire of the road throughout the licence plot was to be constructed by Guardian.

22 Clause 2(1) of the licence agreement then provides as follows:

"The licensor hereby grants to the licensee licence and authority during the licence period to enter upon the...