Ochre Ridge Ltd v Cork Bonded Warehouses Ltd & Port of Cork Company Ltd
| Jurisdiction | Ireland |
| Judge | MR. JUSTICE T.C. SMYTH |
| Judgment Date | 28 February 2006 |
| Neutral Citation | [2006] IEHC 107 |
| Docket Number | RECORD NO. 2000/9333P |
| Court | High Court |
| Date | 28 February 2006 |
[2006] IEHC 107
THE HIGH COURT
DUBLIN
COSTELLO v KRISHNA PROPS (IRL) LTD v MCVEAGH UNREP FINLAY 10.7.1975 (EX TEMPORE)
ABERFOYLE PLANTATIONS LTD v CHENG 1960 AC 115
MALONEY v ELF INVESTMENTS LTD 1997 ILRM 253
MEAGHER v LUKE J HEALY PHARMACY LTD UNREP MURPHY 15.4.2005
KELLY v CUSSEN 1954 88 ILTR 97
O'MAY v CITY OF LONDON REAL PROPERTY CO LTD 1979 245 EG 1069
CHARTER REINSURANCE CO LTD v FAGAN 1996 2 WLR 726 1997 AC 313
RICE & KENNY v DUBLIN CORPORATION 1947 IR 425
W & L CROWE LTD & ANOR v DUBLIN PORT & DOCKS BOARD 1962 IR 294
LANDLORD & TENANT (AMDT) ACT 1980 S67
ASHWORTH FRAZER LTD v GLOUCESTER CITY COUNCIL 2001 1 WLR 2180
OHS LTD v GREEN PROPERTY CO LTD 1986 IR 39
CONTRACT
Specific performance
Sale of land - Terms - Conditional contract -Obtaining of consents - Whether condition fulfilled - Whether plaintiff in position to complete at completion date - Claim dismissed (2000/9333P - Smyth J -28/2/2006) [2006] IEHC 107 Ochre Ridge Ltd v Cork Bonded Warehouses Ltd
In these proceedings the Plaintiff claims against the 1st Defendant specific performance of a contract for sale dated 8th October 1999 (and a range of declaratory reliefs claimed to arise out of the contract). There is also claimed — and the claims were pursued at the hearing - for damages for (a) breach of contract and (b) conspiracy.
The property in suit is an old bonded warehouse situated at the top end of an island of land in Cork City, which is divided by the river. The premises is effectively owned by the 2nd Defendant, which has a lease thereof of 999 years, and carved out of that interest is a 99 year lease made between the 2nd Defendant and the 1st Defendant.
a) The Plaintiff concluding negotiations to its satisfaction with the 2nd Defendant regarding the development of the premises;
b) The consent by the 2nd Defendant to assignment and change of use; and
c) The obtaining by the Plaintiff of an opinion from Senior Counsel to the effect that the 2nd Defendant is not a "State Authority".
This latter provision (Special Condition 13) relating to the status of the 2nd Defendant, being not a State Authority, was established and accordingly this condition is of no relevance to the proceedings.
The Completion date of the Contract was 10th April 2000 in respect of which time was of the essence (Special Condition 9(b), which further provides that:-
"It is agreed that if, for whatever reason, the purchaser fails to complete on the Completion Date, this contract shall automatically be at an end and the Purchaser's deposit, less the Non-Refundable Element (herein defined) shall be returned to the Vendor's Solicitor in exchange for all copy title documents furnished in connection with this agreement."
The Plaintiffs” case is that the consent of the 2nd Defendant both as to assignment and change of use was wrongfully withheld and furthermore that the Defendants conspired together to ensure that the contract fell or would be frustrated.
The Plaintiff is a private limited company and was the “vehicle” used, by one Mr. Tim Tallent, with a view to carrying out an intended scheme of development. Mr. Tallent was not a property developer. His business was in “packaging”, a family business of which he had become, over time, the Managing Director. His family roots were in the Cork area, but he has spent the greater part of his business life in England. In his career in the packaging business he had been in some property transactions, buying or selling, leasing or letting premises for the packaging business. Without detracting from such experience, it could be fairly described as modest dealings in property.
Prior to the Plaintiff and the 1st Defendant entering into the contract of 8th October 1999 the 2nd Defendant had served on the 1st Defendant a Schedule of Dilapidations in relation to the premises which had been seen by the Plaintiff. This fact was expressly referred to in Special Condition (5) which then noted:-
"The Vendor has not carried out any of the works referred to therein, nor does it intend to do so prior to completion. The Purchaser shall take the premises subject to the said Schedule of Dilapidations and subject to the obligations to comply with same. Following execution of this Agreement, the Vendor shall write to the Landlord, informing it of the existence of the Agreement and requesting the Landlord to hold the Schedule of Dilapidations in abeyance, pending the outcome of negotiations in relation to the premises to be conducted between the Purchaser and the Landlord. If the Landlord refuses to agree to this course of action, the Vendor shall negotiate with the Landlord in good faith to agree a Schedule of Dilapidations. The Vendor shall consult with the Purchaser before agreeing such schedule with the Landlord. The Vendor shall endeavour to postpone commencement of the works to be carried out under the Schedule to date after the Completion Date."
The evidence established to my satisfaction that the Plaintiff, prior to entering into the contract with the 1st Defendant, had in March 1999 suggested to the 2nd Defendant that it issue a Schedule of Dilapidations on the 1st Defendant. Furthermore, the Plaintiff wished to be informed by the 2nd Defendant as to, if and when such Schedule would issue before fixing on a purchase price and terms of contract with the 1st Defendant. A Schedule of Dilapidations (which was quite extensive) was served on the 1st Defendant in June 1999. Subsequent to the execution of the Contract, the 1st Defendant by letter dated 14th October 1999 sought consent to the assignment of the lease and change of use of the premises. This was not a defeatist application, truthful information was given by the 1st to the 2nd Defendant and the case is clearly distinguishable from Costello -v- Krishna Props (Ir) Ltd. & McVeagh (unreported 10/7/1975 Finlay, P.) The letter recorded the understanding (confirmed by the evidence of the 1st Defendant) that Mr. Tallent would contact the 2nd Defendant to discuss the matter of the dilapidations with them. The letter concluded:-
"In relation to the Schedule of Dilapidations, I understand that Mr. Tallent intends to redevelop the property and that these redevelopment works, would, on the whole, render unnecessary the works required under the Schedule of Dilapidations. Accordingly, I would be grateful if you would confirm that the schedule may be left in abeyance pending the outcome of discussions between Port of Cork Company and Mr. Tallent."
The letter seeking the consents drew a refusal from the 2nd Defendant and in the clearest terms signalled that such would not be forthcoming "until such time as effective arrangements have been put in place to comply with the Schedule of Dilapidations." I am satisfied that both Mr. Tallent and the 1st Defendant realised that there was little point in going to the trouble and expense of carrying out the repairs in the Schedule of Dilapidations if the property was to be re-developed. The contract had expressly given the power Mr. Tallent to negotiate with the 2nd Defendant on this issue. While the 1st Defendant did from time to time carry out works of repair to maintain the integrity of the building during the building of the Cork Main Drain and some such could coincide with items of dilapidations, they did so on the advice of their own engineer - not in purported compliance with the entire Schedule of Dilapidations, or the Schedule of Dilapidations at all.
Indeed, Mr. Tallent immediately on learning of the position of the 2nd Defendant contacted Mr. O'Mahony of the 1st Defendant and agreed on presenting a united front to the 2nd Defendant. Furthermore, Mr. Tallent was organising full surveys - structural, dimensional and historical, which would be required in any event to submit to the Planning Authority. Mr. Tallent's telefax of 9th November 1999 copied to Mr. O'Mahony concluded:-
"Therefore, whilst Cork Bonded Warehouse and Ochre Ridge accept that the Schedule is in place there seems little point in complying with it until both the reassignment and change of use are granted and the overall scheme is put before the planners as a concise conservation package."
Later that month, on 23rd November 1999, Mr. Tallent wrote to Mr. Pat Keenan, the Secretary Or Chief Executive Officer of the 2nd Defendant, with reference to the surveys stating:-
"On receipt of these reports Scott Tallon Walker will be in a position to advise the way forward in both architectural and heritage terms, at which stage I will copy you with our proposals. At that time, I shall contact you again so that we can arrange to meet and discuss further the redevelopment of the site, and demonstrate how our proposals meet or exceed the schedule currently in place…"
Mr. Tallent carried forward his intended enterprise and informed Mr. O'Mahony of his intention to meet with Mr. Keenan after consulting surveyors and architects. Furthermore, Mr. Tallent informed Mr. Keenan that as soon as he consulted his advisors:-
"I will contact you to arrange a...
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