Wynn Clons Development Ltd v Cooke

• Jurisdiction: Ireland
• Judge: Ms. Justice Laffoy
• Judgment Date: 01 October 2012
• Neutral Citation: [2012] IEHC 385
• Court: High Court
• Date: 01 October 2012

[2012] IEHC 385

THE HIGH COURT

[No. 1922P/2008]

Wynn Clons Development Ltd v Cooke

BETWEEN

WYNN CLONS DEVELOPMENT LIMITED

PLAINTIFF

AND

KEITH COOKE

DEFENDANT

ARANBEL LTD v DARCY 2010 3 IR 769

CONTRACT

Specific performance

Contract for sale - Building agreement - Rescission - Damages in lieu of specific performance - Breach of contract - Whether plaintiff entitled to specific performance - Whether breach of contract - Whether unit provided to defendant fit for purpose - Whether defendant entitled to rescind contract - Whether specific performance appropriate remedy - Aranbel Ltd v Darcy [2010] IEHC 272, [2010] 3 IR 769 followed - Order for specific performance made and counterclaim dismissed (2008/1922P - Laffoy J - 1/10/2012) [2012] IEHC 385

Wynn Clons Development Ltd v Cooke

Facts The proceedings concern a contract for the sale of an office unit by the plaintiff to the defendant. In total a deposit of €33,000 was paid. When the plaintiff called on the defendant to complete the sale it was contended by the defendant that there was a strong smell of odours in the unit which would have to be remedied. Ultimately the defendant asserted that it was repudiating the contract and sought the return of the deposit. The plaintiff issued proceedings seeking specific performance or damages in lieu of specific performance. It was contended that the defendant had failed and refused to complete the purchase and that the plaintiff had at all material times been ready, willing and able to perform its outstanding obligations. On behalf of the defendant it was contended that the unit had a noxious smell, which rendered it uninhabitable as an office. Expert evidence was given as to whether noxious odours could be detected.

Held by Laffoy J in granting a decree of specific performance: It was impossible to find that there existed a noxious smell which rendered the unit unfit for human habitation. The defendant was not entitled to repudiate the contract for sale and was not entitled to the return of the deposit nor to any remedy at law or in equity against the plaintiff. The appropriate remedy was to order a decree of specific performance against the defendant to complete the sale. Even if it was appropriate to order that the defendant pay damages to the plaintiff in lieu of specific performance, no evidence had been tendered by which damages could be assessed. No evidence had been adduced that the defendant did not have the resources to comply with an order for specific performance. If it was the case that the appropriate remedy was damages then both sides would have to adduce evidence in this regard. The plaintiff's claim for an order for specific performance was not defeated by delay or laches.

1 Judgment of Ms. Justice Laffoy delivered on 1st day of October, 2012.

Factual background

2 1. These proceedings concern a contract for the sale of an office unit in the development known as Pugin Court, Gorey, County Wexford by the plaintiff, as vendor, to the defendant, as purchaser. Pugin Court, a retail and office development comprising six retail units and twelve office units in a modern three storey building, was developed by the plaintiff around 2006. Two firms of auctioneers in Gorey, Warren Estates Limited and Kinsella Estates acted as joint agents for the plaintiff in the sale of the units in Pugin Court. However, the defendant dealt solely with Mr. Niall Slattery of Warren Estates Ltd. In mid-August 2006, the defendant agreed, subject to contract, to purchase Office Unit 12 (Unit 12) in Pugin Court at the price of €330,000 plus VAT. He paid a booking deposit of €5,000 to Warren Estates Ltd., and the balance of the deposit, €28,000, was to be paid on the signing of the contract.

3 2. Keans Solicitors, acted for the plaintiff in the sale. Anthony F. O'Gorman & Co., Solicitors, acted for the defendant. There were two contractual documents: a contract for sale in the form of the Law Society General Conditions of Sale; and a building agreement in the form issued jointly by the Law Society and the Construction Industry Federation. While both bear the date 21 ^st November, 2006, it is clear on the evidence that both contractual documents were executed on behalf of the plaintiff on 5 ^th December, 2006. It is beyond question that the defendant, as well as the plaintiff, became contractually bound on that day to comply with both contractual documents. By that day, the defendant had paid the balance of the deposit amounting to €28,000.

4 3.purchase price of €330,000 was split between the contract for sale and the building agreement. The purchase price in the contract for sale was €91,646 and the contract price in the building agreement was €238,354 plus VAT.

5 4. The contract for sale envisaged the sale of Unit 12 to the defendant being effected by way of long lease for a term of eight hundred and fifty years, but nothing turns on that. As regards the closing date, condition 14 of the special conditions in the contract for sale provided that the closing date would be seven days from the date on which the defendant should receive notice in writing from the plaintiff that the plaintiff was in a position to complete. In the building agreement it was provided that the closing date would be "the day 7 days after the Completion Date", which was defined as the earlier of the date on which the defendant should agree in writing that the works had been completed, or the date upon which the defendant should receive from the plaintiff a notice in writing that the works had been completed. The works were defined as meaning the unit specified in the plans, that is to say, Unit 12 "together with such ancillary works and services as may be necessary to render the unit and premises reasonably habitable when completed". In the building agreement the plaintiff covenanted to build and complete and finish in a good, substantial and workmanlike manner the works and to deliver the same to the defendant.

6 5. It is important to emphasise that the contract for sale and the building agreement only referred to Unit 12 and not to any car parking space. However, by letter dated 24 ^th November, 2006, Mr. Slattery of Warren Estates Ltd., notified the plaintiff's solicitors that certain car parking spaces had been booked by certain purchasers, including the defendant, whom it was represented had booked car park space No. 6 at a price of €12,000. I am absolutely satisfied on the evidence that the contract for the sale of Unit 12 to the defendant did not include, and was not in any way conditional upon the defendant acquiring car park space No. 6 at the price of €12,000.

7 6. By 18 ^th December, 2006, the plaintiff's solicitors were putting pressure on the defendant's solicitors to complete the transaction. However, the defendant's solicitors, who were familiar with Pugin Court, by letter dated 19 ^th December, 2006 informed the plaintiff's solicitors that the works were not sufficiently advanced for the defendant's engineer to carry out a worthwhile inspection. The pressure from the plaintiff's solicitors to complete was renewed in early 2007. By letter dated 9 ^th January, 2007 the plaintiff's solicitors notified the defendant's solicitors that they were "in possession of the Certificate of Completion", and queried when the defendant would be in a position to close. That message was reiterated in letters of 16 ^th January, 2007, 23 ^rd January, 2007 and 2 ^nd February, 2007, the last letter being accompanied by a final architect's opinion on compliance with the relevant planning permission. The defendant's solicitors, by letter dated 21 ^st February, 2007, sought confirmation in writing that Unit 12 was finished and completed and that there were no workmen any longer on the premises, and stated that on receiving such confirmation the defendant's instructions would be taken with a view to having the premises "snagged" and with a view to closing. By letter dated 22 ^nd February, 2007 the plaintiff's solicitors informed the defendant's solicitors that Unit 12 had been completed. At the end of February 2007 title matters and other contractual matters were attended to by the plaintiff's solicitors.

8 7. The defendant's solicitors furnished the defendant's "snag list" to the plaintiff's solicitors with their letter dated 8 ^th March, 2007. The "snag list" was dated 6 ^th March, 2007 and was signed by the defendant personally, who listed the following matters as matters that were of concern to him and that he would like dealt with before closing the transaction:

9 (a) dampness on the inside of the windowsill area of the main window facing the road;

10 (b) two scratches that were very noticeable on the outside of the main window;

11 (c) scratches on the middle window facing the landing area; and

12 (d) the fact that the fire hose was located in Unit 12, suggesting that it could be located in the landing area so as to be accessible to everyone if required to be used.

13 8. In the letter of 8 ^th March, 2007 the defendant's solicitors also requested the plaintiff's solicitors to deal with the situation regarding the car parking space. On 6 ^th March, 2007 Warren Estates Ltd. had issued a sale advice note, which was headed "Subject to Contract - Contract Denied", evidencing the proposed sale of car park space No. 6 to the defendant at the price of €12,000 plus VAT. The response of the plaintiff's solicitors by letter dated 12 ^th March, 2007 was that the reference to a car parking space had been deleted from the proposed lease "as no car parking space follows with this property". By letter dated 21 ^st March, 2007, the defendant's solicitors informed the plaintiff's solicitors that they were "gathering in the funds" from the defendant, but in the meantime they required clarity in relation to the car...