Smelter Corporation v O'Driscoll

• Jurisdiction: Ireland
• Judge: O'HIGGINS C.J.
• Judgment Date: 29 July 1977
• Neutral Citation: [1977] IESC 1
• Docket Number: 91–1975,[1973 No. 1159 P.]
• Court: Supreme Court
• Date: 29 July 1977

[1977] IESC 1

THE SUPREME COURT

O'Higgins C.J.

Kenny J.

Parke J.

91–1975

SMELTER CORPORATION OF IRELAND v. O'DRISCOLL

BAR

SMELTER CORPORATION OF IRELAND LIMITED

Plaintiffs

AFFIRMING HIGH-18.12.74

and

ABINA MARY O'DRISCOLL

Defendant

1 JUDGMENT delivered on the 29th day of July 1977 by O'HIGGINS C.J. (nem. diss.)

2 This is an appeal brought by the Plaintiffs from the decision and judgment of Butler J. refusing their claim for specific performance of an Agreement entered into by the Defendant for the sale to them of 55 acres O roods 36 perches of land situate at Carrigrenan, Co. Cork. The Plaintiff is a limited liability company formed for the purpose of establishing in Ireland a smelter or base metal reduction plant and in pursuance of this aim was at the time of the Agreement sought to be enforced engaged in the acquisition of land as a suitable site for such a plant in the Little Island area of Cork. The Defendant is the owner of the land the subject of the Agreement but the negotiations in relation to the Agreement were conducted on her behalf by her husband Michael O'Driscoll and later by her solicitor who has since died, also named Michael O'Driscoll. The Agreement necessarily took the form of an Option to Purchase dated 25th November 1969 under which for the sum of £7,000 the Plaintiffs were given for twelve months an option to purchase at a price to be determined by Mr. Owen MacCarthy, the well-known Arbitrator to the Land Values Reference Committee, on an arbitration specially held for that purpose. Provision was made for the extension of the Option for a further period of six months on the payment of a further sum of £3,250 and there were other clauses not relevant to the issues raised in this appeal. It was provided that the Option payments should in the event of the Option being exercised be credited against the purchase money and if the Option was not exercised for any of the three grounds set out in Clause 9 then one-half of such sums should be returned to the Plaintiffs and in the meantime such one-half should be secured on deposit. On the 10th January 1970 Mr. Owen MacCarthy determined in his arbitration award that the purchase price of the land should be at the rate of £1,500 per acre, making a purchase price of £82,857.50. By letter dated November 23rd 1970 the Plaintiffs took a second Option for six months for the sum of £3,250 thereupon paid to the Defendant's solicitors. A second Option for six months was then purchased by the Plaintiffs as a result of negotiations between the auctioneer acting for the Plaintiffs, Mr. Aherne, and the Defendant's solicitor. The consideration for this Option was also £3,250 but this sum was not to be credited against the purchase money should be Plaintiffs exercise the Option. At the expiration of this third Option a fourth was negotiated as evidenced by a letter dated 24th November 1971 from the Defendant's solicitor to the Plaintiffs. This Option was for a further six months for a nominal consideration but on the terms that the Option monies paid under the original Option should now be freed to the Defendant and should not be credited against the purchase money in the event of the Option being exercised. In effect this arrangement constituted the ground of a fresh Option to Purchase for a fixed price of £93,087.50 being £82,837.50 as fixed by Mr. MacCarthy, plus the £10,250 paid in respect of the Options under the Agreement of 25th November 1967. By letter dated 15th May 1972 the Plaintiffs purported to exercise this final Option. The Defendant being unwilling and refusing to complete, these proceedings were commenced by the Plaintiffs seeking specific performance of the Agreement to sell and associated relief.

3 The Defendants Defence of the Plaintiffs" claim is based on two main grounds. In the first place it is contended that the Option or Options to Purchase were given by her, I quote from paragraph 3 of the Defence.

"Subject to a condition precedent that a smelter plant, otherwise a base metal reduction plant, would be built on the said lands and that the said lands would be used for no other purpose, but the Defendants do not propose to build or utilise a smelter plant or base metal reduction plant on the said lands and the said Option has not been fulfilled and will not be fulfilled and the Plaintiff is thereby debarred from exercising the said or any Option."

4 It was further contended with regard to the Option and I quote from paragraph 4 of the Defence:

"The same was obtained from the Plaintiff under duress and coercion whereby the Plaintiff caused or permitted a Local Authority to clearly give her to understand that if she did not sell the said lands or give an option under the same to the Plaintiff for the purpose of a smelter plant or base metal reduction plant, then the said lands would be acquired by compulsory acquisition by the said Local Authority and given to the Plaintiffs for the stated purpose, and the Defendant believed...