Price & Lynch v Keenaghan Developments Ltd

• Jurisdiction: Ireland
• Judge: Ms. Justice Clark
• Judgment Date: 01 May 2007
• Neutral Citation: [2007] IEHC 190
• Docket Number: [No. 2149P/2006]
• Court: High Court
• Date: 01 May 2007

Price & Lynch v Keenaghan Developments Ltd

BETWEEN

ALVIN PRICE AND ELIZABETH LYNCH

PLAINTIFFS

AND

KEENAGHAN DEVELOPMENTS LIMITED

DEFENDANT

[2007] IEHC 190

[No. 2149P/2006]

THE HIGH COURT

Abstract:

Practice and procedure - Contract law - Specific performance - Strike out proceedings - Whether the plaintiffs’ proceedings for specific performance of an alleged contract for the sale of land should be struck out as an abuse of process.

The defendants issued a motion seeking to strike out the plaintiffs’ proceedings for specific performance of an alleged oral contract for the sale of land pursuant to Order 19, rule 28 of the Rules of the Superior Court. The plaintiffs pleaded that a binding concluded agreement was reached when the developer agreed to furnish them with detailed plans for the completion of the house and this was evidenced by acts of part performance, namely the subsequent furnishing by them of modified plans to the developer’s estate agents. The plaintiffs registered lis pendens against the property. However, the correspondence exhibited indicated that the plans as modified by the plaintiffs were never actually considered by the developer and the house was sold to another purchaser. The defendants submitted that the plaintiffs’ proceedings comprised an abuse of process as the action had no reasonable chance of success.

Held by Clarke J. in ordering that the proceedings be struck out and the lis pendens vacated: 1. That the essential elements of a concluded contact were absent in the correspondence generated by the plaintiffs and it was clear that they did not at any stage consider themselves bound to purchase the property during the period when they were awaiting the developer’s response to their proposed variations to the internal layout of the house. Furthermore, the plaintiffs on two separate occasions referred to the fact that they were interested in another property. Consequently, there was no concluded agreement between the parties and therefore the plaintiffs’ proceedings had no reasonable chance of succeeding and ought to be struck out and the lis pendens vacated.

Reporter: L. O’S

Ms. Justice Clark

1 This case involves a motion brought by the defendant to strike out the plaintiffs' proceedings for specific performance for an alleged oral contract for the sale of land under O. 19, r. 28 of the Rules of the Superior Court.

2 1. The plaintiffs are a solicitor and personal assistant working in a large Dublin law firm. The defendant is a construction company engaged in the development of holiday homes on a lakeside setting at Acres Cove in Drumshambo, County Leitrim. The affidavits filed disclose that the plaintiffs spent several months in the early part of 2006 viewing this holiday home development in Drumshambo and were impressed in particular by a house in the course of construction which had views of the lake and which was being marketed by Brady Estates on behalf of the defendant for €499,000. The plaintiffs were unhappy about some of the layout of the house, in particular the location of the stairway and they enquired as to whether the building could be modified and whether they could introduce their own plans for internal modification.

3 2. They first had to establish through the estate agents whether the developer would consider any internal modifications. When the answer was positive they travelled to Drumshambo on the 4th May, 2006, and received the developer's detailed plans for their consideration. It has never been stated whether the couple drew their own plans or whether they were assisted by an architect or draftsman. On the 9th May, 2006, they sent their own modified plans to the estate agent for transmission to the developer. The receipt of the plans and visits to the property took place without any discussion as to what price the plaintiffs were prepared to pay nor were any details of a contract worked out. Far from any binding agreement to purchase, the plaintiffs made it clear at all times that they had an active interest in an alternative house in Cavan

4 3. On the 8th May, 2006, the plaintiffs wrote to the estate agents referring to the tricky and idiosyncratic layout of the house and commenting that:

"our review of the detailed plans confirms our view that it is very difficult to tweak the design to get usable living areas and adequate bedroom accommodation. While there are plenty of changes one would like to make, I have marked the essential changes on the attached plans and hope that they are clear."

"As mentioned we want a 10 meter berth to use with this house" and "we would hope to negotiate a price and if the modifications and price can be agreed to move on quickly to sign the contract to enable the work to proceed as quickly as possible. The sale price which we would propose as a fair price for this house and the berth would be €450,000.

I look forward to hearing from you as soon as possible.

Kind regards,

Yours sincerely

Alvin Price"

The letter went on to say;

5 4. The plaintiffs' accompanying plans sent with a letter dated the 8th May, 2006, included items of change described as "essential" and one item described as "desirable". This letter was followed up with a note addressed to Joe Brady, the principal of the auctioneering firm and sent by fax on the following day the 9th May, 2006. This note was in the following terms:

"Joe,"

6 Please see attached letter and plans. We would be very much obliged if you could discuss the matter with the developer and revert to us as soon as possible as, if the developer does not think the proposed changes are feasible, we would like to move ahead with the purchase of another house we have seen in Cavan.

Kind regards,

Alvin

7 5. While the plans as modified were in the hands of the estate agents the plaintiffs were still at the stage of making offers and engaged in bargaining and moreover warned that they did not wish to waste time as they had alternative plans. It is therefore a matter of surprise that in their pleadings the plaintiffs state that a binding concluded agreement was reached on the 4th May, 2006, when the developer agreed to furnish them with detailed plans for the completion of the house and that this oral contract was evidenced by acts of part performance when they subsequently furnished their modified plans to the developer's estate agents.

8 6. The second plaintiff in her affidavit advances this case by stating that:

"we were anxious not to go to the trouble of proposing changes to the plans and also, having gone to the trouble, to provide the developer with an enhanced plan which would improve the marketability of the property without some security that the trouble and effort would not be in vain"

"agreement was reached for the developer to suspend building operations for a period of three weeks from the 4th May and to provide the plaintiffs with plans of the building operation so that they could prepare their modifications and then negotiate a price for the modified plans or have the property constructed in accordance with the agreed plans at the pre existing price of €499,000. They would then sign contracts and pay a full deposit if they elected to purchase the property either with or without modifications."

"in the event that we did not acquire the property, the Defendant would be free to market the property using any of our design modifications...."

She avers that

She further averred that

9 This it was urged on me was the consideration for the oral contract.

10 7. The plaintiffs do not allege that they had reached a concluded agreement for the sale of the house at an agreed price but rather that agreement had been reached to give them an option to negotiate a number of alternatives and that these options formed the basis of a concluded contract. These assertions are not born out by the correspondence which demonstrates that no concluded contract of any kind had been achieved. This correspondence indicates that the plaintiffs were in no stronger a position than that of prospective bidders at a sale or auction who go to the trouble and expense of engaging a surveyor to examine the property but who have no assurance that such expenditure will secure the property. At the very highest the parties may have agreed to provide modified plans which would be considered with a view to entering further negotiations on final layout and price. The exhibited letters and emails indicate that the plans as modified by the plaintiffs were never actually considered by the developer.

11 This is not an agreement for which specific performance could be...