Stafford v Mahony and Others

JurisdictionIreland
JudgeMr. Justice Doyle
Judgment Date21 March 1980
Neutral Citation1980 WJSC-HC 1788
Docket NumberNo. 1668p./1976
CourtHigh Court
Date21 March 1980
STAFFORD v. MAHONY & ORS. (KEANE MAHONY SMITH)

BETWEEN:

PATRICK J.D. STAFFORD
Plaintiff

and

DENIS MAHONY DESMOND SMITH AND ROBIN PALMER CARRYING ON BUSINESS AS KEANE MAHONY SMITH
Defendants

1980 WJSC-HC 1788

No. 1668p./1976

THE HIGH COURT

1

Judgment of Mr. Justice Doyle delivered the 21st day of March 1980.

2

The plaintiff Mr. Patrick Stafford is a gentleman who lived in England until early in the year 1973 when he came to reside in Dublin. The defendants are partners in a firm of Auctioneers and Valuers carrying on business in Dublin under the name and style of Keane Mahony Smith. The action concerns a claim by the plaintiff that he retained the defendants as Auctioneers to advice him in the purchase of property and that by reason of negligent misrepresentation on their part he suffered damage. He claims that in or about the month of March 1973 he sought the services of the defendants to find for him a property suitable as a residence but one which would be a sound investment in that it would be available for immediate resale at a profit. He claims that the defendants introduced him to promises known as the Collegiate School, Celbridge, County Kildare the property of the Incorporated Society for Promoting Protestant Schools in Ireland, hereinafter known as the Collegiate School. He says that he was induced to purchase this premise upon the representations of the defendants that the lands and premises would be able to be resold at once for an enhanced price and that they were in other respects, a first-class investment property and suitable for the purposes which he had announced to the defendants. He claims that the premises were in fact a bad investment; that the defendants valuations were unrealistically high and further he says that, unknown to him, the plaintiff, the property was the subject of certain development plans by the Local Authority which involved the running of a public road through the property and that the defendants failed to ascertain this fact, of which the plaintiff was unaware, or to advise him about the effect of such a development plan upon the future value and utility of the property. He had to resell the property at a loss.

3

The defendants in their defence deny that they were retained by the plaintiff as his auctioneers at the time alleged, that is, about the month of March 1973, but they claim that in fact they were then instructed by one James Stafford, a brother of the plaintiff, to look out for him for a Georgian style residence and that on his behalf they located the property known as the Collegiate School. They claim that they did not give any professional advice or make any representations to the plaintiff and the gravemen of their defence is that the plaintiff, Mr. Patrick Stafford, came into the picture only at the last moment upon the signing of the contract of sale on the 21st of December 1973. Inter when the evidence in the case was unrolled it transpired that this ground of defence related to what was claimed to be a private arrangement by the brothers James and Patrick Stafford for their mutual convenience which involved that Mr. Patrick Stafford should step into the shoes of his brother at the signing of the agreement. His position then and thereafter was to be governed by a private independent contract in writing between the brothers. As a corollary and logically following upon this ground of defence, the defendents denied any misrepresentation negligent or otherwise to the plaintiff, Mr. Patrick Stafford, and denied negligence or breach of duty on their part such as would cause the damage which the plaintiff alleged.

4

The Plaintiff Mr. Patrick Stafford having recounted his return from London to Dublin early in 1973, stated that soon afterwards he met Mr. Denis Mahony one of the defendants and retained him as his adviser to find for him a property of a residential character about twenty miles from Dublin. He was introduced to some properties, in particular premises known as Hamwood House near Haynooth, in the month of June 1973 which he inspected with the defendant Denis Mahony. This property, Mr. Stafford said, he felt was attractive and he was interested in pursuing the matter but the sale did not go through because he said Mr. Mahony subsequently sold the property to another client of Keane Mahony Smith. He later, on Mr. Mohony's advice, inspected another property called Newtown House near Loixlip which was a residence with land and in some respects seemed to fulfil his requirements, but because of certain proposed developments in the immediate neighbourhood Mr. Stafford thought that the future value of the promises would not be enhanced when a development would take place and he did not go through with the purchase of this property.

5

Eventually in the month of November 1973 he claims that Mr. Mahony suggested that he should take a look at premises known as the Collegiate School, Celbridge. He visited it on a number of occasions and discussed a prospective purchase with Mr. Mahony in his office. Eventually they had a somewhat lengthy discussion in the course of which Mr. Mahony pointed out that although the premises could be obtained for the sum of £70,000 he, Mr. Mahony, could easily sell the property at any subsequent time for £100,000. He also informed Mr. Stafford that expenditure of £10,000 to £15,000 would be sufficient to make the premises suitable as a residence. It is material to note that the premises had for a number of years been used as a boarding school for girls and was laid out in a manner suitable to such occupation, in dormitories, class-rooms and the usual arrangements to be expected in a school premises. At the conclusion of this interview in Mr. Mahony's office the plaintiff said that he considered the matter and about a week later he returned when he met Mr. Palmer, another member of the firm. Mr. Palmer assured him that the property was good value for money. He alleged that the six-acre field attached to the property would, with planning permission, be alone worth the purchase price and he informed Mr. Stafford that planning permission could easily be obtained. After further consideration Mr. Stafford says that he made up his mind to purchase, early in the month of December 1973, and he instructed Mr. Mahony to buy it on his behalf. He retained as his solicitor Mr. Thomas Bacon principal of the eminent firm of James G. O'Connor and Company to act on his behalf.

6

A contract of sale was signed on the 21st of December 1973. The form used was a print prepared by the Incorporated Law Society and it is important at this stage to look at the terms of the memorandum annexed to the contract. The body of the memorandum consists of a printed document with blanks for suitable insertions of particulars as to the parties, the purchased price and other matters. The name of the vendors, the Incorporated Society for promoting Protestant Schools in Ireland, is typed into the memorandum and the name of the purchases is typed as "James Stafford". At the time of the execution of the agreement the name James Stafford in type-script was crossed out and the name "Patrick" written in pen by Mr. Thomas Bacon, solicitor for Mr. Patrick Stafford. Also in Mr. Bacon's handwriting is the date, the 21st of December 1973; Mr. Patrick Stafford's address at Ardoyne House Pembroke Park Dublin 4, and an alteration in the purchase price, which is stated to incorporated Auctioneers fees, to £73,500 and a deposit amounting to £10,000, leaving a balance due on completion of £63,500, which alteration was also made by Mr. Bacon. Mr. Bacon also wrote in the new closing date, namely the 31st of January 1974 in substitution for the original closing date of the 30th of November 1973 which had been typed in, as had the earlier particulars referred to. It may be noted that in the statement of claim at paragraph five the plaintiff had claimed that he had paid the purchase price of £70,000 and £3,500 in respect of fees whereof £1,750 was received by a firm known as Osborne King & Megran the vendor's Auctioneers and £1,750 was received by the defendants as the plaintiffs advisers. This averment was contested at paragraph four of the defence where it was stated that the said sum of £1,750 stated to have been received by the defendants was not received by them as the plaintiff's advisers but was received as 50% of the commission in respect of the sale of the said premises to the plaintiff.

7

In the course of his direct evidence the plaintiff did not purport to explain the circumstances in which the name of his brother James had originally been typed into the memorandum attached to the contract as the purchaser of the premises, beyond stating that at one time his brother James had been in contact with Keane Mahony and Smith and that this had been mentioned by Mr. Mahony in the course of the long interview at which he was claimed to have made the negligent misrepresentations relied upon. Mr. Patrick Stafford said that some two months after the execution of the contract for sale that is, sometime in February of 1974 he engaged the services of Mr. Frank Barry, an Architect, to inspect the premises and to estimate the cost of converting it for the purposes of a private residence. Mr. Barry reported within a couple of days that £10,000 or £15,000 would be a complete waste of money if expended upon the premises. To put it into proper habitable condition would require many times that amount. The plaintiff stated that on receiving this report he decided to resell and no informed Mr. Mahony. He alleges that Mr. Mahony then once more assured him that there would be no problem in getting £100,000 for the property. It does not appear that anything was done in the way of arranging a resale for at least a year. In the meantime the plaintiff completed the purchase from his own resources, he claimed. The sale was ultimately concluded on the...

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