Sheedy v Jackson
| Jurisdiction | Ireland |
| Judge | Mr. Justice Quinn |
| Judgment Date | 12 April 2019 |
| Neutral Citation | [2019] IEHC 313 |
| Docket Number | [2017/7016 P.] |
| Court | High Court |
| Date | 12 April 2019 |
[2019] IEHC 313
[2017/7016 P.]
THE HIGH COURT
COMMERCIAL
Contract – Sale of lands – Specific performance – Plaintiff seeking specific performance of a contract for the sale of lands – Whether the receiver was entitled to and did validly and reasonably rescind the contract
Facts: The plaintiff, Mr Sheedy, claimed specific performance of a contract for the sale of lands of Whitfield Court, Kilmeadan, Co. Waterford made on 7th August 2015 between the plaintiff and the defendant, Mr Jackson, the latter acting by his duly appointed receiver Mr Stapleton, a chartered surveyor and director of Lisney, Dublin. There was no dispute as to the due execution of the contract and its enforceability as entered into, but central to the defence in the action was the assertion by the receiver that he was entitled to and did validly and reasonably rescind the contract on 7th September, 2017 in circumstances expressly provided for by General Condition 18 of the contract.
Held by the High Court (Quinn J) that the plaintiff's objections and requirements were matters which, taken together, had the combined effect that the plaintiff was persisting in requiring the defendant to deliver the property wholly free from encroachments and with physical boundaries defined to a degree of perfection for which the parties had not contracted. Quinn J held that the receiver's efforts to accommodate certain of those requirements, were "attempts to remove or comply same" and at no point did he agree to vary the contract. Quinn J held that the defendant had reasonable grounds to apply General Condition 18 and in doing so did not act capriciously or arbitrarily, and was not acting in breach of the contract.
Quinn J held that the plaintiff’s claim should be dismissed.
Claim dismissed.
This is an action for specific performance of a contract for the sale of lands of Whitfield Court, Kilmeadan, Co. Waterford made on 7th August 2015 between the plaintiff and the defendant, the latter acting by his duly appointed receiver Mr. Peter Stapleton, a chartered surveyor and director of Lisney, Dublin.
There is no dispute as to the due execution of the contract and its enforceability as entered into, but central to the defence in the action is the assertion by the receiver that he was entitled to and did validly and reasonably rescind the contract on 7th September, 2017 in circumstances expressly provided for by General Condition 18 of the contract.
The contract was in the standard form issued by the Law Society of Ireland, being General Conditions of Sale — 2009 Edition, with Special Conditions. General Condition 18 provides as follows:
‘If the Purchaser shall make and insist on any Objection or Requisition as to the title, the Assurance to him or any other matter relating to or incidental to the Sale, which the Vendor shall on the grounds of unreasonable delay or expense or other reasonable ground be unable or unwilling to comply with, the Vendor shall be at liberty (notwithstanding any intermediate negotiation or litigation or attempts to remove or comply with the same) by giving to the Purchaser or his Solicitor not less than 5 Working Days ' notice to rescind the Sale. In that case, unless the Objection or Requisition in question shall in the meantime have been withdrawn, the sale shall be rescinded at the expiration of such notice.’
I shall consider later the other relevant provisions of the contract. In the meantime, to determine whether the defendant had reasonable ground for issuing the notice of rescission, it is necessary to consider the historic chronology of the matter in detail.
The defendant was the owner of the house known as Whitfield Manor, Whitfield Court, Kilmeaden, Co. Waterford and related lands comprising approximately 230 acres. On 4th March, 2005 the defendant mortgaged the property to Irish Nationwide Building Society.
On 8th February, 2012 Mr. Stapleton was appointed receiver of the property by the National Asset Management Agency (NAMA having acquired the relevant loans and security from Irish Nationwide Building Society).
By a Loan Sale and Global Assignment Agreement on 20th June, 2014 and a Deed of Assurance of Mortgage dated 23rd June 2014 Promontoria Eagle Limited (‘PEL’) acquired the mortgage and obligations thereby secured.
On 21st May, 2015 Mr. Stapleton was appointed as receiver by PEL.
The receiver gave evidence that following his first appointment in 2012 he found the property to be in a poor state of repair as a result of neglect and vandalism over many years.
The lands were also in poor condition having been neglected and much overgrown. He found also that the boundaries were poorly defined and he encountered at the outset issues of encroachment by known and unknown parties whose stock were roaming in the lands.
The receiver reported the encroachment issues to the Gardaí, to Waterford County Council and to the Department of Agriculture in August 2012. He said that he had initially cleared the lands of stock, in some cases having had to initiate legal proceedings against the owners of such stock and adjoining landowners. He gave evidence that there were some recurrences of the encroachments which he said did not last particularly long.
Mr. Stapleton also gave evidence that in his experience as receiver of a number of assets comprising extensive acreage in rural areas it is common to encounter poorly defined boundaries and encroachment by animals and others, particularly where the owner of the lands is no longer present. He said that it was difficult to police boundaries and keep stock off land no matter what level of security is deployed.
In relation to the Manor House itself Mr. Stapleton said that he was aware that as the building was a listed building Waterford County Council had an interest and he had consulted with them when arranging to carry out works to prevent the further deterioration of the house including roof repairs, propping up dangerous elements to arrest structural movement, boarding windows, fencing off dangerous areas, erecting steel shuttering and the like.
In November 2013 Mr. Stapleton commenced the marking of the property through Sherry Fitzgerald who arranged a number of viewings by interested parties.
The receiver said that in April 2014 he received through Sherry Fitzgerald a first offer from the plaintiff to purchase the property for a sum of €1.375m with a 120-day closing. The long closing date was unacceptable and the offer was rejected.
Sherry Fitzgerald continued their marketing efforts. The plaintiff renewed his proposal. Ultimately in January 2015 Sherry Fitzgerald confirmed that they had agreed sale terms to the plaintiff, again at €1.375m subject to contract, with a proposed closing date of 17th February, 2015. They received a booking deposit of €50,000.
Messrs Gartlan Furey Solicitors were instructed by the receiver to prepare conditions of sale and ultimately the contract was executed on 7th August, 2015. I shall return later to the events around the signing of the contract.
The plaintiff outlined his various business interests and he said that he conducts business mainly in the US and travels back and forth from there. His principle interest is in mining, ‘waste to energy’ and he has some interests in Ireland including farming. He is the owner of a property at Slievenamon near Clonmel, Co. Tipperary comprising an estate of 5,200 acres. When he is in Ireland he lives at Slievenamon but otherwise at Carson City, Nevada.
The plaintiff gave evidence that his principle interest in the property was to downsize from Slievenamon. He said that he had in mind that this would be his last home and a final location for him and his wife to settle.
The plaintiff said that apart from the property serving as a residence he had other plans for the estate which included the development of a Christmas tree farm, an all-weather ski training school, a distillery, and a tourist project generally.
The plaintiff said that one of the principle attractions was the connection of the estate with Christmas trees. Apparently the estate had been granted in the 1660“s to William
Christmas and he considered that this presented a unique marketing opportunity in that Christmas trees could be sold which had been grown on the original ‘Christmas estate’. He showed to the court brochures of his plans in this regard.
A separate connection mentioned by the plaintiff was that it appeared that originally William Christmas had owned some 2,000 of the 5,200 acres now owned by the plaintiff at Slievenamon.
The plaintiff said that he initially became interested in the estate in early 2014 and had engaged with Mr. Guckian of Sherry Fitzgerald. He visited the estate and walked the boundaries and inspected the house.
The plaintiff received from Sherry Fitzgerald an order of magnitude report which had shown that repairs to the house alone could cost in the order of €2.2m. The plaintiff had initially indicated his view that he considered at that time and based on the state of deterioration of the house at the time he first inspected it that the repairs could in fact be done for much less namely a sum in the region of €1.5/€1.75m.
The plaintiff said that at that stage no good maps were provided for the property and he consulted an engineer Mr. Ben Harte who advised that he request proper boundary maps.
On 27th January, 2015 Lohan & Company Solicitors of Athlone, Co. Westmeath wrote to Gartlan Furey confirming that they are instructed in connection with the purchase of the property and indicated that they were awaiting hearing from Gartlan Furey with contracts for sale together with copy title...
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Anthony Sheedy v Alistair Jackson
...Quinn J dismissed the plaintiff’s claim, the reasons for that determination being delivered in a reserved judgment of 12 April 2019 ([2019] IEHC 313). The plaintiff appealed to the Court of Appeal. The issues presented by the grounds of appeal fell into three broad categories. As presented ......