Windham v Maguire & Moran

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 16 July 2009
• Neutral Citation: [2009] IEHC 359
• Docket Number: [No. 5932P/2008]
• Court: High Court
• Date: 16 July 2009

[2009] IEHC 359

THE HIGH COURT

[No. 5932P/2008]

Windham v Maguire & Moran

BETWEEN

RICHARD WINDHAM

PLAINTIFF

AND

VINCENT MAGUIRE AND LIAM MORAN

DEFENDANTS

LAW SOCIETY GENERAL CONDITIONS OF SALE 2001 GENERAL CONDITION 21

LAW SOCIETY GENERAL CONDITIONS OF SALE 2001 GENERAL CONDITION 40(G)

LAW SOCIETY GENERAL CONDITIONS OF SALE 2001 GENERAL CONDITION 40

LAW SOCIETY GENERAL CONDITIONS OF SALE 2001 GENERAL CONDITION 40(G)(ii)

JACKSON v STOKES UNREP MCCARTHY 25.7.2008 2008/30/6605 2008 IEHC 276

WYLIE & WOODS IRISH CONVEYANCING LAW 3ED 2005

CONTRACT

Sale of land

Specific performance - Contract - Special conditions - Vacant possession - Completion notice - Whether contract had come to end - Alleged inability to deliver vacant possession in accordance with terms of contract - Whether contract conditional on vacant possession - Whether plaintiff able, ready and willing to complete - Reasonable advice of intention to close - Proper construction of general condition 40(g) of law society general conditions of sale - Whether defendants failed to crystallise date on which actual vacant possession had to be made available - Whether vacant possession could have been provided had reasonable advice of intention to close been given - Whether court in position to order decree of specific performance - Whether inequitable if defendants able to escape from obligations by reason of own default - Jackson v Stokes [2008] IEHC 276, (Unrep, HC, McCarthy J, 25/7/2008) considered - Damages in lieu of specific performance be assessed by judge sitting alone ordered (2008/5932P - Clarke J - 16/7/2009) [2009] IEHC 359

Windham v Maguire

Mr. Justice Clarke

2 1.1 The plaintiff ("Mr. Windham") is the beneficiary of a trust ("the Windham Trust"). The Windham Trust owns a part of the Blackhorse House Industrial Estate. In the early part of 2007 a contract was entered into between the Windham Trust, as vendor, and the defendants ("Mr. Maguire and Mr. Moran") as purchasers for the sale by the Windham Trust of its interest in the relevant property to Mr. Maguire and to Mr. Moran. In general terms it was contemplated that a planning application would be pursued in respect of the property and, in that context, a lengthy period was allowed prior to the anticipated closing of the sale.

3 1.2 In circumstances which it will be necessary to explore in a lot more detail, difficulties were encountered in relation to closing the sale in the early part of 2008. It is against the background of those difficulties that these proceedings arise. The Windham Trust seeks specific performance of the contract. Mr. Maguire and Mr. Moran say that the contract has come to an end by virtue of what is said to have been the inability of the Windham Trust to deliver vacant possession in accordance with the terms of the contract in circumstances where the Windham Trust had served a completion notice, which notice was also served in accordance with the terms of the contract.

4 1.3 While there is a significant element of factual controversy surrounding the precise circumstances concerning the possible giving of vacant possession of the property, the general factual background to the contract is not disputed. I, therefore, turn to the uncontested facts.

2 2.1 In 2001, under advice from one of the trustees, Frank Mooney, the Windham Trust purchased units 3, 4, 5 and 6 at Blackhorse House Industrial Estate (the "Industrial Estate"). From about July, 2005 Mr. Mooney suggested that the Windham Trust should consider selling its interest in the Industrial Estate.

3 2.2 There was, at the time, two tenants in occupation of Units 3 to 6 of the Industrial Estate. Unit 3 of the Industrial Estate was the subject of a lease entered into on the12th October, 2001, between the Windham Trust and a company called Fashion Blinds of Ireland Limited ("Fashion Blinds"), for the term of ten years. Units 4 to 6 of the Industrial Estate were the subject of a lease entered into on the 4^th June, 1998, between the previous owners of the Industrial Estate, Red Sky Limited, and a company called Coghlan's Bakery Products (Dublin) Limited (the "Bakery").

4 2.3 On the 14^th March, 2007, the Windham Trust on the one part and Mr. Maguire and Mr. Moran on the other part, entered into an agreement to purchase the portion of the Industrial Estate owned by the Windham Trust (the "Property"). The contracts were in the form of the Law Society General Conditions of Sale (2001 Ed). Mr. Maguire and Mr. Moran were made aware of the property through Brian Dwyer & Partners, Estate Agents. Mr. Maguire and Mr. Moran intended purchasing all the units at the Industrial Estate and did, it would appear, at around the same time, enter into contracts to purchase Units 1 and 2 of the Industrial Estate from their respective owners. Initially the property was to be purchased by a company owned by Mr. Maguire and Mr. Moran, Walsh Maguire Limited. Subsequently it was suggested that Mr. Maguire and Mr. Moran were to purchase the property "in trust". The solicitor to Mr. Maguire and Mr. Moran, Jill Crowley of O'Donnell Sweeney, wrote to the Windham Trust's solicitor, Peter Silvester of McKeever Rowan, explaining that the contract had been signed in trust in order to reserve the position of Mr. Maguire and Mr. Moran to nominate a company to take the deed at a later date if so required. The Windham Trust and its advisers were not happy with this arrangement and the contract was duly amended.

5 2.4 Because of that, when the contracts for sale were exchanged on the14th March, 2007, same provided that Mr. Maguire and Mr. Moran were to purchase the properties in their own names with the purchase price being specified at €4,375,000 and with a deposit paid of €75,000. The contract provided for vacant possession in accordance with General Condition 21 of the Law Society General Conditions of Sale. The sale was due to close on the 31^st January, 2008, (the "Closing Date"). It seems clear that the driving force behind the transaction on the Windham side was Mr. Mooney.

6 2.5 Mr. Mooney became ill in Winter 2007, after which Mr. Windham and particularly his wife took a more "pro-active" role in the transaction. Another trustee of the Settlement, Andrew McCarren, also assisted in the sale of the property at this time. Frank Mooney died on the 19^th May, 2008. Maurice Healy was appointed as a new trustee to the Windham Trust on the 27^th June, 2008.

7 2.6 The sale never completed. In that context it is necessary to turn to the contract and, in particular, the relevant facts, some of them contested, in respect of vacant possession.

2 3.1 As pointed out earlier the main issue arising in this case is in relation to whether or not the Windham Trust was in a position to give vacant possession of the property, in particular in respect of Units 4 to 6, being those occupied by the Bakery. In his evidence, Mr. Liam Moran stated that vacant possession was a prerequisite to the completion of the transaction.

3 3.2 Under an agreement dated the 9^th March, 2007, Fashion Blinds agreed to assign and surrender to the Windham Trust the lease of Unit 3 of the Industrial Estate with effect from the 31^st January, 2008, for the consideration of €350,000. In evidence, William Joyce, the Principal of Fashion Blinds, confirmed that Fashion Blinds was ready and wiling to complete the surrender of the lease on the 31^st January, 2008, in order to deliver vacant possession of the unit to the Windham Trust. Ms. Kathryn Griffin a partner in Anderson and Gallagher Solicitors, advised Fashion Blinds in relation to this arrangement and also gave evidence to like effect.

4 3.3 There does not seem to be a dispute but that Fashion Blinds had vacated the property prior to the 31^st January, 2008, although there now appears to be some difficulty with regard to the legal documentation required to give effect to a surrender of the lease in question as Fashion Blinds, it now appears, has been wound up prior to executing any surrender. Fashion Blinds was placed in voluntary liquidation on the 11^th December, 2007, but was not ultimately wound up until 2009. Thus it would seem that Fashion Blinds had vacated the premises in good time to allow a surrender with vacant possession in the early part of 2008. The difficulty concerning winding up, to which it will be necessary to turn in due course, only arose well after these proceedings came into being.

5 3.4 As to the remainder of the property, on the 14^th March, 2007, the Bakery agreed with the Windham Trust to surrender their lease of Units 4 to 6 of the Industrial Estate on the 31^st January, 2008, for the consideration of €600,000. Vacant possession was a condition of the agreement. On agreeing to surrender the lease, the Bakery agreed to purchase and fit out a purpose built replacement premises at Unit 10B Toughers Business Park, Newbridge, Country Kildare (the "new premises").

6 3.5 Mr. Coghlan, the Principal of the Bakery, stated in evidence that Mr. Mooney had previously indicated that the Bakery could stay on in possession for up to six months, if required, subject to an agreed rent being paid to the new owners. Mr. Coghlan gave evidence that, on the 20^th December, 2007, he contacted Robert Maguire, a son of Vincent Maguire, who, according to Mr. Coghlan, also indicated that the Bakery could stay in possession. It is not accepted that Mr. Robert Maguire told Mr. Coghlan that he could stay in occupation of Units 4 to 6 until the New Premises were completed. On the 22^nd January, 2008, closing documents for the surrender of Units 4 to 6 were executed by the Bakery but copies were not furnished to the Windham Trust's solicitors until the 4^th March, 2008. On the 28^th January, 2008, Mr. Silvester inspected the units of the Industrial Estate owned by the Bakery. On that date the property was still...