1. By order of the High Court made by consent it was ordered that the two above entitled actions be heard together. This order was made because of the fact that the two actions are interrelated one to the other and the reliefs obtained by the plaintiff in one affect the rights of the other.

2. In the first of the above entitled actions, that is the claim brought by his Highness the Aga Khan (hereinafter referred to as the Aga Khan) he claims that on 27 November 1989 (not the 28th as stated in the pleadings) his agent Mr. Henry Carnegie entered into a contract with Mr. and Mrs. Firestone’s agent Mr. Philip Broughton whereby it was agreed that Mr. and Mrs. Firestone would sell to the Aga Khan for the sum of 14.2 million dollars a stud farm known as Gilltown and certain other lands (hereinafter referred to as Gilltown). The Aga Khan claims that by letter dated 1 December 1989 amended as to p. 2 thereof by letter dated 4 December 1989 and signed by the defendants’ agent a sufficient note or memorandum to satisfy the Statute of Frauds was created. In the circumstances he seeks specific performance of the verbal contract and an injunction to restrain the sale of the lands to Mr. Akazawa.

3. As an alternative to this claim the Aga Khan says that the aforesaid letter of 1/4 December 1989 constituted an offer to sell lands which offer was accepted by him by way of a letter dated 20 December 1989 written by Mr. Carnegie on the Aga Khan’s behalf.

4. A further claim was made. This was not pleaded and it emerged at a late stage in the trial. In this claim the Aga Khan claimed that the letter of 1/4 December 1989 constituted an offer which, he says, he ‘assented to’ and it was accordingly accepted. This concept of ‘assent’ arises by virtue of a letter written on behalf of Mr. and Mrs. Firestone by their agent Mr. Broughton dated 22 December 1989 in which the assumption is made by him that the Aga Khan assented to these terms. Objection was not taken to this case being made even though it was not pleaded subject to the comment that it only arose at a very late stage in the trial.

5. Mr. and Mrs. Firestone essentially raise three points in their defence. They deny in the first place that there was any agreement reached on 27 November 1989. They say secondly that if there was such an agreement the letter of 1/4 December 1989 does not constitute a sufficient note or memorandum to satisfy the Statute of Frauds and they say that at no stage was the letter of 1/4 December 1989 any more than an offer to treat. Thirdly they say that the letter of 1/4 December 1989 did not constitute an offer to sell but if it did it was at all stages subject to an option in favour of Mr. Akazawa. This option has been described as a ‘first refusal option’ over the lands. This plea is not raised in relation to the Aga Khan’s primary claim namely the alleged verbal contract of 27 November 1989. It is only raised in relation to the second claim which is that the letter of 1/4 December 1989 was an offer which was subsequently accepted by letter of 20 December 1989.

6. The position of the plaintiff in the second case, Mr. Akazawa, is as follows. In his statement of claim he claims against Mr. and Mrs. Firestone that on or about 3 October 1989 in consideration of his agreeing to buy certain other property (comprising bloodstock and real estate in America) Mr. and Mrs. Firestone afforded him the right of first refusal to purchase from them the property known as Gilltown on such terms and conditions as in any offer received by them from any other party which Mr. and Mrs. Firestone were prepared to accept. (The first refusal document was in fact signed on 5 October 1989 but no point arises on the date). Mr. Akazawa in his statement of claim goes on to allege that in December of 1989 they, Mr. and Mrs. Firestone, entered into a contract for the sale of the property with the Aga Khan for the price of 14.2 million dollars and he, Mr. Akazawa, on 9 January 1990 executed his option to purchase the lands at that figure. He alleges that on 12 January 1990 the parties executed a contract for the sale and Mr. Akazawa duly paid a deposit on that sale. Mr. Akazawa alleges a breach of contract on the part of Mr. and Mrs. Firestone in that they have failed to complete that sale and claims a declaration that in pursuance of the agreement of 3 October 1989 (the first refusal option) he, Mr. Akazawa, is entitled to seek specific performance of the agreement and claims an injunction to restrain Mr. and Mrs. Firestone from disposing of the property by completing the sale with the Aga Khan. In the alternative he claims damages for breach of contract.

7. The circumstances in which the transaction on 27 November 1989 between the Aga Khan and Mr. and Mrs. Firestone arose are as follows:-

8. It would appear that prior to 1970 the lands which are the subject-matter of these proceedings were owned by the Aga Khan’s grandfather. However in 1970 or 1971 the lands were sold to Mr. and Mrs. Firestone. This left the Aga Khan with two significant holdings in Ireland, namely Sheshoon and Ballymany. In 1975 by reason of the construction of the Naas bypass it became necessary for the Aga Khan to consider the acquisition of additional land in Ireland. He had a particular affection for the lands at Gilltown and was particularly interested in acquiring them. He became aware of the fact that Mr. and Mrs. Firestone were contemplating selling Gilltown and accordingly directed his lawyer Mr. Carnegie to open negotiations for their acquisition. These negotiations came to nothing. Again in 1987 there were new negotiations. These progressed a stage further and indeed progressed to the stage where a contract for the sale was drawn up by the lawyers for the respective parties and was signed by the Aga Khan. However at that stage for his own reasons Mr. Firestone did not wish to proceed with the sale and the sale fell through. That contract would have envisaged the acquisition of not only the lands but also the bloodstock on the lands. In the process of negotiating that sale and carrying it through to the stage of contract every detail of the contract was examined and agreed to by the American lawyers acting on behalf of the parties and also the Irish lawyers.

9. These two sets of negotiations having come to nought the matter lay dormant until the month of September 1989. At that stage Mr. Carnegie received a call from Mr. Broughton, an American attorney acting on behalf of Mr. and Mrs. Firestone and as a result of that call Mr. Carnegie returned the call to Mr. Broughton. Mr. Carnegie was aware at that time, as was the Aga Khan, of rumours circulating that Gilltown might be coming onto the market. Contact was made between the two lawyers and Mr. Carnegie was informed by Mr. Broughton that the Firestones were contemplating selling Gilltown. At the time it had not been decided whether the bloodstock was to be included in the sale and he, Mr. Carnegie, was invited to re-open negotiations for the acquisition of the land. He informed Mr. Broughton that the Aga Khan wanted to be ‘in at the beginning of the negotiations’. He did not want to be involved in ‘a bidding war’ but that he was prepared to buy as much bloodstock as was necessary to ensure the acquisition of the land. The lawyers agreed eventually to meet at Mr. Broughton’s office on 16 October 1989. This meeting was altered to a breakfast meeting on 16 October 1989 which in fact took place in the Plaza Hotel in New York. At this meeting Mr. Broughton indicated that the bloodstock would not be included in the transaction and the price for the land was to be ‘around 15,000,000 dollars’. He also indicated that two houses, namely the Muldoon’s house and the Donnelly’s house, would be excluded from the sale. Mr. Carnegie confirmed that all the above matters were acceptable to the Aga Khan but stressed that he did not want to be one of a number of persons in negotiation for the acquisition of the land. Nothing came of that meeting save that it was pointed out that certain personal assets were not to be included in the sale such as the Waterford glass chandelier and art works which were of particular interest to the Firestone family. This did not present any problem as they had been identified during the course of the previous negotiations and were known to both parties.

10. The next step in the negotiations was a telephone call from Mr. Carnegie to Mr. Broughton who, having ascertained the price of land in Ireland, offered to ‘begin to talk at the level of 11,000,000 dollars’. Also in that conversation Mr. Carnegie brought to Mr. Broughton’s attention the fact that there were rumours that Japanese interests had purchased certain lands which Mr. and Mrs. Firestone had owned in America known as the Big Sink Farm and he asked Mr. Broughton to confirm that the Japanese had not in fact bought Gilltown. Mr. Broughton confirmed that they had not bought Gilltown but said that they had purchased certain bloodstock in Ireland. There was no mention of a right of first refusal in favour of the Japanese interest at that time.

11. At the time of this telephone conversation which would have been around 18 or 20 October 1989 both lawyers knew that they would be meeting on 4 November 1989 at Gulf Stream Park, a racecourse in Florida, at which the Breeders’ Cup Racemeeting was to be held on that date. They agreed to see each other on that occasion. They did in fact meet as did Mr. Firestone and the Aga Khan. At the brief meeting between Mr. Firestone and the Aga Khan I accept that Mr. Firestone said words to the effect, to the Aga Khan, that ‘all things being equal I would like you to have the property. . .’. Another brief meeting took place between Mr. Carnegie and Mr. Broughton when vague arrangements were made to discuss the matter further but no confirmed appointment was made.

12. The next step in the negotiations was that shortly before 17 November Mr. Carnegie again telephoned Mr. Broughton and from Mr. Broughton’s secretary got the number at which he could be contacted in Connecticut and he called him there immediately prior to Thanksgiving. In the course of that conversation Mr. Carnegie became aware that there was Japanese interest in the lands but so far no offer had been made. Arrangements were made between the two lawyers to meet at Mr. Broughton’s office on 27 November 1989. This is the meeting at which the discussion took place at which it is alleged by the Aga Khan that an oral contract was made and it is alleged by Mr. Firestone that no more than ‘discussions’ were held.

13. The foregoing constitutes no more than a broad summary of the way in which the two lawyers came to meet on 27 November 1989 in Mr. Broughton’s office. Mr. Broughton in his evidence differs somewhat in his recollection of the events but I do not believe that anything material turns on the differences of recollection and I think that the only material fact that emerges from the foregoing is the fact that in the course of the prior negotiations for the acquisition of the land both of the lawyers became thoroughly familiar with all the circumstances surrounding the transaction and had in fact negotiated a contract for the sale inter alia of these lands and both they and the parties’ Irish solicitors had worked through this contract line by line and agreed it. There were therefore no pitfalls or problems in the way of entering into a new contract.

14. The evidence of what transpired at the meeting of 27 November 1989 is given firstly by Mr. Carnegie, secondly by Mr. Broughton and corroborated to a greater or lesser extent by the Aga Khan and Mr. Firestone.

15. Mr. Carnegie says that having exchanged preliminary remarks he, Mr. Carnegie, offered 13,000,000 dollars for the property. At that stage for the first time Mr. Broughton indicated that when the Japanese interest had purchased the bloodstock on Gilltown they had also been given some form of first refusal option over the lands. He indicated that the nature of the option was such that an offer in writing would trigger the first refusal option. However Mr. Broughton said that he felt that an offer of 14,000,000 dollars was what would be required to buy the lands. However for this sum the Aga Khan would also be acquiring Mr. Firestone’s shareholding in Goffs’ Bloodstock Sales because Mr. Firestone was severing his connection with Ireland and was disposing of this shareholding also. Mr. Carnegie says that Mr. Broughton also indicated that the Muldoon and Donnelly houses would be part of the transaction and would be included in the deal. At that stage Mr. Carnegie says that he indicated that he was no longer prepared to be one of a number of people negotiating for this property and that he would require Mr. Broughton to ascertain from Mr. Firestone exactly the terms upon which the property could be bought and he required a description of what was included in the sale. Mr. Carnegie says that he asked Mr. Broughton to find out exactly what Mr. Firestone’s terms were and that when he, Mr. Carnegie, knew these terms, he would get instructions from the Aga Khan and let Mr. Broughton know within one week if the Aga Khan was interested in acquiring the property on those terms. Mr. Broughton agreed to contact Mr. Firestone on the phone there and then and Mr. Carnegie says that this he duly did. He says that Mr. Broughton left his office for a period of approximately 15 to 20 minutes and then came back into the office and said that he had been speaking to Mr. Firestone and indicated that Mr. Firestone was prepared to sell the property to the Aga Khan for the sum of 14.2 million dollars and this would include the Gilltown lands, the Martin Farm and the two houses and would also include the personal property with the exception of items which were to be agreed to which were of personal interest to Mr. and Mrs. Firestone. He also said that it would be necessary for the Aga Khan to take over the leases of certain equipment on the lands which included the station wagon and the computer and he said that vacant possession would be given but that all moneys that had to be paid by Mr. and Mrs. Firestone to the employees terminating their employment would be chargeable against the Aga Khan and that the shareholding in Goffs held by Mr. Firestone would be included in the sale. He said that the agreement was to be closed on 31 January 1990 insofar as the lands were concerned and the end of March insofar as the transfer of the shares in Goffs’ Bloodstock Sales was concerned. Mr. Carnegie says that Mr. Broughton indicated to him that Mr. Firestone had placed a time limit of one hour within which the Aga Khan could accept the deal in that form.

16. Mr. Carnegie says that having obtained the details as set out above he then asked for permission to telephone the Aga Khan. He says that he got this permission and he was brought from the main office into a conference room where he used the telephone. He says he was given a dial code by Mr. Broughton and this enabled him to get an outside line. He says that he spoke to the Aga Khan in France, that he told him of the conditions as outlined by Mr. Broughton and told the Aga Khan that he had one hour within which to make up his mind. He says that the Aga Khan instructed him and authorized him there and then to accept the contract as it stood. He was told not to attempt to negotiate but simply to accept. He says that he returned to Mr. Broughton and he accepted the deal as set out above. He asked Mr. Broughton to confirm the transaction in writing and the respective lawyers agreed that they would contact Irish lawyers for the purpose of preparing the necessary documentation. During the previous negotiations the Aga Khan had used the services of Messrs J.G. O’Connor & Co., solicitors and Mr. and Mrs. Firestone had used the services of Messrs A. & L. Goodbody. This concluded the transaction.

17. In his evidence Mr. Broughton dealt with his recollection of the various steps which led up to the meeting of 27 November 1989 in his office. I do not think that they materially conflict with the recollection of Mr. Carnegie. They vary in detail. However I formed the opinion that Mr. Broughton’s recollection was not as clear as Mr. Carnegie’s and insofar as any difference emerges in their respective accounts I prefer Mr. Carnegie’s account.

18. With regard to the meeting in Mr. Broughton’ s office of 27 November 1989 Mr. Broughton agrees that it did in fact take place. He says that it happened at approximately 3 pm. He is in agreement that discussions took place and they covered matters such as the termination of the employment of the employees, vacant possession of the property, the fact that the Goffs’ shares would be included in the transaction and broadly his recollection of the meeting does not conflict with Mr. Carnegie’s until one comes to the question of price. Mr. Broughton’s recollection is that at no stage did he Mr. Broughton state a specific price at which the property would be bought. He says that his information at that time was that Mr. Akazawa had bid 14,000,000 dollars for the property and that he had been told that Mr. Akazawa would not go any higher than that. He, Mr. Broughton, suggested to Mr. Carnegie that he should put ‘some decent amount over the 14,000,000 dollars such as 14.2 million dollars to Mr. Firestone and that it might be acceptable to Mr. Firestone’. He says that at that stage he had never discussed with Mr. Firestone directly what price he would take and made it clear that the 14.2 million dollars was no more than a suggestion on his part as to what he thought the figure might be that Mr. Firestone would take. The second head-on conflict of fact which emerges between the two lawyers is the question of telephone calls during that meeting. Mr. Broughton denies categorically that he telephoned Mr. Firestone during the meeting and insofar as Mr. Carnegie making a telephone call is concerned he said that he did not recall it happening. Not only did Mr. Broughton deny that any such call was made, in the terms set out above, but tendered as evidence a computer read-out created by his automatic telephone system which recorded telephone calls made from his office and purported to demonstrate with the aid of these read outs that no such call was made to the Aga Khan from his office on that day.

19. The significance of this evidence is that if no such telephone call was made then clearly there cannot have been an acceptance of the terms by the Aga Khan and accordingly Mr. Broughton’s version of what occurred at that meeting would be correct namely that the parties did no more than have a broad discussion as to the outline terms upon which the property might be bought.

20. The Aga Khan gave evidence of receiving a telephone call from Mr. Carnegie on 27 November 1989 at which, he says, Mr. Carnegie recounted to him the exact terms upon which the property could be bought and informed him of the fact that he had one hour within which to accept. He said that he specifically instructed Mr. Carnegie to accept the terms as they stood and directed him to do so. In his evidence he fully supported the evidence of Mr. Carnegie.

21. Mr. Firestone gave evidence on this point and I am bound to say that his evidence on this, as on other aspects of the case, was far from clear or convincing. He was unable to confirm that he knew that a meeting was taking place on 27 November 1989 between his lawyer and Mr. Carnegie but did say that any time such a meeting took place he would be aware of it. He was asked if he recollected being telephoned and he said that he did not recall speaking to Mr. Broughton at that meeting at all. I feel that my reaction to Mr. Firestone’s evidence on this aspect of the case can be best left by saying that I do not consider that Mr. Broughton is able to look to it in corroboration of his own account. On the other hand I feel that the Aga Khan’s evidence was entirely reliable and acceptable.

22. With regard to the print-outs delivered by the computerised telephone it emerged during the course of cross-examination that the print-outs depend for their validity upon the person placing the call, whether the caller or the telephone operator, entering the appropriate code for the client so that the call will be charged to the client’s account and that it is only if this occurs that the call will show on the account. In the course of cross-examination it was demonstrated that work done for Mr. Firestone on the telephone in a number of other instances failed to find its way onto Mr. Firestone’s account. I am in no way surprised that given that Mr. Carnegie was placing the call that it was not charged to Mr. Firestone’s account. Moreover it transpired that the system in Mr. Broughton’s office was that large clients such as Mr. Firestone might have a number of different accounts chargeable to different companies or indeed even different aspects of their business. It might well be therefore that a transaction for Mr. Firestone relevant to Gilltown might find its way onto another account payable by Mr. Firestone.

23. I find no corroboration whatever for Mr. Broughton’s evidence of the fact that the telephone call to the Aga Khan does not appear on the telephone computer read out tendered to the court.

24. In his cross-examination, Mr. Broughton was pressed on a number of specific points by counsel for the Aga Khan. Specifically when asked if he was positively saying that no such telephone call was made he replied ‘I don’t deny it. I don’t recall it’. Again when he was asked if Mr. Carnegie was shown into a private conference room and left alone there he replied ‘I don’t recall it happening. It could well have happened. I don’t recall it’.

25. Mr. Broughton remained adamant that at no stage during the meeting did he telephone Mr. Firestone. He says that having reviewed his documentation he believes that Mr. Firestone telephoned him at 9.30 on the evening of the meeting and that he, Mr. Broughton had not yet arrived home and that he called Mr. Firestone back on his arrival home.

26. On this clear issue of fact I have formed the view that I should prefer the evidence of Mr. Carnegie corroborated by the evidence of the Aga Khan. I find Mr. Carnegie’s evidence to be clear and acceptable. During the course of the hearing and while Mr. Carnegie was under cross-examination two minor issues of fact arose. Mr. Carnegie was challenged on these two issues. He never varied on the account which he gave and in each of these issues it was subsequently confirmed that he was accurate. I would be satisfied to accept his evidence alone. Confirmed, as it is, by the evidence of the Aga Khan, which again I found to be entirely accurate and correct, I have no doubt that terms were offered to Mr. Carnegie by Mr. Broughton which he, having received the Aga Khan’s instructions, accepted. I am therefore satisfied that a verbal contract for the sale of the lands and the shares was entered into in Mr. Broughton’s office on 27 November 1989.

27. It is next necessary to determine the circumstances in which the letter of 1/4 December 1989 came into existence.

28. Mr. Carnegie has said that at the conclusion of the agreement he requested Mr. Broughton to write to him setting out the terms of the agreement. He says that after he had returned to France and when no letter confirming the agreement had arrived he telephoned Mr. Broughton on either 29 or 30 November and was assured by Mr. Broughton that he had drafted a document which he had submitted to Mr. Firestone and that on receipt of it from Mr. Firestone he would fax it to Mr. Carnegie. Mr. Carnegie said that on the following Monday morning he received a letter by fax dated 1 December 1989. He says that on reading the letter he realized that it did not contain any mention of the shares in Goffs’ Bloodstock Sales and during that afternoon he telephoned Mr. Broughton who had apparently also observed the omission and agreed to send a new second page. This page duly arrived dated 4 December 1989 which in fact contained the reference to the shares.

29. Mr. Broughton’s recollection of what occurred is different. He said that at the end of the meeting Mr. Carnegie had left to take up various issues with his client and that he was to go back to Mr. Firestone to talk to him about the price of 14.2 million dollars. The next thing that happened, as he recollects it, was that Mr. Carnegie telephoned him and asked him to write down in a letter the various points that they had discussed at the meeting so that he could show the points to his client and that as a result of that he Mr. Broughton wrote the letter on 1 December. He says that he did this only to identify the points that had been discussed at the meeting which he thinks Mr. Firestone would probably have accepted if the Aga Khan was agreeable to them.

30. On this issue I prefer the evidence of Mr. Carnegie. I think it is singularly unlikely that a lawyer of Mr. Carnegie’s status would require Mr. Broughton to compile something in the nature of a minute of their meeting. I am of the opinion that the letter was of far more significance than attributed to it by Mr. Broughton. If it were merely a minute of the meeting it would have been entirely unnecessary to add the last paragraph which was to the effect that Mr. Firestone had read and approved the transaction as outlined in the letter. I therefore hold as a fact that it was agreed between the lawyers on 27 November 1989 that a letter would be sent detailing the terms discussed and not, as Mr. Broughton says, requested in a telephone call subsequent to the meeting.

31. Counsel for Mr. and Mrs. Firestone in disputing that any such agreement was made on 27 November 1989 draws attention to a number of points relating to the conduct of Mr. Carnegie after that date which he says are inconsistent with such an agreement having been reached. He points out, for instance, that one would normally expect a lawyer in Mr. Carnegie’s position to require another lawyer to, there and then, prepare and sign a document to demonstrate that an agreement had in fact been reached which he could show to his client to confirm that there was such an agreement. He points out that at a time when the existence of this contract was being denied, never at any stage did Mr. Carnegie draw attention to the fact that there was a contract in existence but on the contrary made an offer to increase the consideration for the property and offered to enter into fresh and renewed negotiations. He draws attention to the fact that while Mr. Carnegie claims that he made a note of the terms of the contract when they were being given to him, which he says he read over on the phone to the Aga Khan, he never even had these rough notes initialled by Mr. Broughton nor, he points out, did he discover them in his affidavit of discovery as a document which had been in his possession but which he had destroyed. I recognise the strength of these points. However in the final analysis one has to weigh these points against the witnesses and the manner in which they gave their evidence and the degree to which he was contradicted and his general demeanour in the witness-box. It is my belief that Mr. Carnegie and Mr. Broughton conducted their business on the basis of two colleagues who had a genuine rapport and trust in one another. At this meeting they had achieved an agreement which at last had brought to an end, by the mutual consent of their clients confirmed over the telephone, a period of fencing and uncertainty as to whether or not there was going to be a sale. Given that they had at last reached a consensus it would in my view be an unnecessary irritant to require that any document be executed at that time by Mr. Broughton. I have had, during the currency of the case, an insight into the informality with which transactions of this nature are conducted, which I shall be referring to further when I come to deal with the case of Mr. Akazawa and his transaction with Mr. Firestone, and viewed in this light I would see nothing strange in not requiring a document confirming the agreement at that time. I accept that it had been agreed, between the parties, at the conclusion of the meeting that a letter of confirmation would be transmitted.

32. With regard to the subsequent behaviour of Mr. Carnegie in not standing on his rights by demanding the performance of the verbal agreement when it was in the process of collapsing, he has given the reply that he was well aware that the Aga Khan wished to acquire Gilltown and not, as he put it, a ‘law suit’ and for him at that stage to have dug in his heels and stand on his verbal agreement would, in his view, have inevitably resulted in litigation. I accept this as an entirely reasonable approach. I can readily appreciate that if an increase in the purchase price would have resulted in the acquisition of the property then that was, to his client, infinitely preferable than protracted litigation and it was the course favoured by the Aga Khan. I see nothing inconsistent in this. Weighing the clear wish of the Aga Khan to acquire the property against his ability to pay an increased price I would accept that Mr. Carnegie in offering to renegotiate and increase the consideration was acting in accordance with his client’s wishes.

33. With regard to the destruction of his notes and the fact that they do not appear in the discovery, I am informed by counsel and it is agreed, that prior to the commencement of the hearing it was brought to the defendants’ attention that such notes did at one time exist but that they had been destroyed and because they were no longer in existence they had been overlooked when the affidavit of discovery was prepared. An offer was made on behalf of the Aga Khan to file a supplemental affidavit of discovery. However Mr. Firestone’s advisers did not require this and accepted the informal notification. In my opinion the fact that these notes were identified as having existed before the hearing commenced and before they materialized as an issue in the case confirms in my mind the fact the Mr. Carnegie did have such notes and I accept that he destroyed them as being of no value once he received from Mr. Broughton his letter of 1/4 December 1989.

34. Accordingly I am of the opinion that the parties did enter into a verbal contract as alleged.

35. The next issue then to determine is whether the letter of 1/4 December 1989 constitutes a sufficient note or memorandum to satisfy the Statute of Frauds.

36. I have read the authorities upon which Keane J based his judgment in Mulhall v Haren [1981] IR 364 and I have read Keane J’s judgment in which he comprehensively reviews the authorities and I am in complete agreement with the views which he expresses in the course of his judgment and in particular the conclusions which he says emerge from the authorities. At p. 391 he says:-

37. From this analysis of the authorities, I think that the following conclusions emerge:-

38. While this conclusion has never been expressly approved by the Supreme Court I believe that the decision has at least the tacit approval of the court as a result of the comments made in Carthy v O’Neill [1981] ILRM 443.

39. That being so it is necessary to consider whether the letter not only contains the terms agreed but also recognizes the existence of the oral contract.

40. With regard to the first of these provisions and given that I have held as a matter of fact that an agreement was reached, as opposed to a mere discussion of the terms, it appears to me that there can be no dispute but that the letter reflects in full the contract.

41. With regard to the second of these two points, counsel for Mr. Firestone has argued that the wording and phraseology of the letter is such that it would be singularly inappropriate to regard it as recognizing the existence of the agreement. What he argues in the first place is that a letter acknowledging a contract would not use words such as ‘would’ and would not refer to ‘discussions’ but would refer to a ‘deal’ or ‘agreement’ or ‘contract’. He says in effect that what this letter is is no more than an offer to treat and that in having it written Mr. Firestone was doing no more than doing what he was perfectly entitled to do, namely achieve the maximum price for his property. I pause there to comment that criticism has been levelled at Mr. Firestone for the manner in which he acted in relation to this transaction. I see nothing whatsoever wrong with the way in which Mr. Firestone carried on his negotiations. He had an extremely valuable property and two extremely wealthy gentlemen interested in acquiring it. It would in my view have been an act of gross folly for him to do otherwise than to attempt to achieve the maximum price by playing one against the other.

42. In answer to the arguments addressed by counsel for Mr. Firestone, counsel for the Aga Khan points out what are, to my mind, two features of the letter which clearly recognize the existence of the contract. The first and of lesser importance, is the use of words ‘confirm’ and ‘terms’ in the first paragraph. In my opinion unless there was a concluded contract there would be nothing to confirm. Moreover the use of the words ‘terms’ is singularly inappropriate if what was being discussed were no more than proposals.

43. Coupled with this, and of far more importance are, in the concluding paragraph, the words ‘Mr. Firestone has read and approved the transaction as outlined above’. The words ‘the transaction’ would in my view be quite inappropriate if all that had been discussed was the possibility of an agreement. Transaction can only relate to a concluded and agreed deal. If it were a matter still to be negotiated it could not, in my opinion, be ‘the’ transaction. It could be no more than ‘a’ transaction.

44. While obviously it is undesirable to paraphrase a document of this nature I am left in no doubt on reading it that it does recognize the existence of the prior verbal contract and does accordingly satisfy the Statute of Frauds in the respect identified by Keane J in Mulhall v Haren.

45. Counsel for Mr. Firestone criticized that document on a number of further grounds and I turn now to deal with these:-

46. I have the evidence of Mr. Philip O’Connor who is an experienced conveyancing solicitor whose qualifications in this regard have not been brought into question. He has given evidence, in relation to this contract, which I accept. In summary he has informed the court that the contract, as evidenced by the letter of 1/4 December 1989, was in a form which was possible to carry through. He has confirmed, as an experienced conveyancing solicitor, that the fundamental terms of the contract existed and while procedural matters would have to be followed the contract could nevertheless be carried through to completion. He contrasted the present contract with the previous contract and expressed the view that in his opinion Land Act consent and ministerial permission would be forthcoming. In summary I accept the evidence of Mr. O’Connor that the performance of the contract as set out in the letter was a practical proposition and, short though it was, it contained all the necessary elements of a contract.

47. I am accordingly of opinion that the letter of 1/4 December 1989 constitutes a valid note or memorandum to satisfy the Statute of Frauds and accordingly there existed a valid and enforceable contract between the Aga Khan and Mr. and Mrs. Firestone as of 4 December 1989.

48. Turning next to consider Mr. Akazawa’s position in this transaction. Mr. Akazawa is, like the Aga Khan and Mr. Firestone, an immensely wealthy gentleman. He has extensive business interests in Japan. Mr. Akazawa’s father became interested in bloodstock about 25 or 30 years ago and Mr. Akazawa personally became involved in bloodstock about two or three years ago. Through Mr. Muldoon, Mr. Firestone’s general manager and partner in some enterprises, Mr. Akazawa made contact with Mr. Firestone’s bloodstock operations and in September of 1989 Mr. Muldoon visited Mr. Akazawa in Japan. Discussions followed between them concerning the possible sale by Mr. Firestone of his bloodstock operation in Europe which would have included Gilltown. These discussions developed into negotiations and ultimately culminated in a meeting which took place on 5 October 1989 in Tokyo in the Okura Hotel. Present at that meeting were Mr. Firestone, Mr. Broughton, Mr. Conor Donnolly who is an associate of Mr. Firestone and Mr. Muldoon. Mr. Akazawa senior and junior were also in attendance. The meeting took place in Mr. Firestone’s room and it appears from the evidence of Mr. Akazawa that documents which had been prepared in New York in Mr. Broughton’s office were faxed out to Tokyo and brought to Mr. Firestone’s room. These documents were executed by Mr. Akazawa and they were identified as being the agreement for the purchase of Big Sink Farm, American bloodstock and Irish bloodstock. At the same time Mr. Akazawa and Mr. Firestone executed a first refusal option on the lands at Gilltown. By the terms of that document Mr. and Mrs. Firestone agreed that if they should receive an offer for Gilltown on or before 20 December 1989, they would notify Mr. Akazawa in writing and he would have first refusal to purchase the property on the same terms as contained in the offer. Mr. Akazawa being notified of an offer of 14.2 million dollars by the Aga Khan, on 8 January 1990 purported to exercise his rights of first refusal and on the following day entered into a contract with Mr. and Mrs. Firestone for the sale to him of Gilltown for 14.2 million dollars. It is this contract in respect of which he seeks specific performance.

49. The issue that arises between the parties in these circumstances can be summarized as follows. It is contended by counsel for Mr. Akazawa that this first refusal agreement is a valid and binding contract which was entered into on 5 October 1989 and accordingly Mr. and Mrs. Firestone were not free to negotiate with or enter into a contract with the Aga Khan on 27 November 1989 in respect of the lands of Gilltown as, it is argued, the contract of 5 October 1989 takes priority over any such contract.

50. The first issue that develops in relation to the agreement of 5 October 1989 is whether the agreement is supported by consideration or is purely a voluntary and unenforceable agreement. In these circumstances and in order to determine this issue it is necessary to consider in more detail the circumstances in which the document of 5 October 1989 came into existence and was executed.

51. It would appear that the central figure in all of these negotiations with Mr. Akazawa was Mr. Muldoon. His evidence would, in my opinion, have been of the utmost importance. However he has not given evidence. That being so one has to rely on Mr. Akazawa and on Mr. Firestone for a description of what transpired at the meeting in Tokyo and prior thereto. Mr. Akazawa appears to have approached this transaction with the most extraordinary degree of trust. He attended at the meeting on 5 October 1989 for the purpose of acquiring property and bloodstock to the value of 19.1 million dollars. Insofar as legal advice is concerned he had ‘a few conversations’ with his lawyer but he was not deeply involved in the transaction. He had not, insofar as he could remember, ever seen any previous drafts of any of the contracts he was proposing to execute. He had not carried out any inspection of the bloodstock he was acquiring. He had not had any veterinary inspection. He accepted Mr. Muldoon’s word and depended upon it that ‘everything was okay’. So far as we know his only knowledge of the Big Sink Farm was that he had visited it. He had not met Mr. Firestone or Mr. Broughton before the meeting of 5 October 1989. He depended entirely on Mr. Muldoon who he knew as a partner of Mr. Firestone. He accepted the contracts and, insofar as he could remember, he made no changes to any of them but signed them without amendment. He could not remember having received any legal advice in relation to the contracts.

52. It was in those circumstances that the first refusal document came to be signed. When Mr. Akazawa was asked about how this document came about he said that he asked Mr. Firestone for first refusal on Gilltown because he was purchasing the bloodstock on the farm and to have moved the bloodstock would have been inconvenient. He would have had to find an alternative farm. At no stage did Mr. Akazawa ever suggest that the acquisition of the American farm or the bloodstock was in any way conditional upon his receiving this right of first refusal. He did make the case quite clearly that the acquisition of the farm was of importance to him and in fact he mentioned it as being crucial but nowhere in his evidence can I find any suggestion that the balance of the sale was contingent on this right. On the contrary if one turns to consider Mr. Firestone’s evidence, it would appear that the contrary was the case. It was suggested to Mr. Firestone as follows ‘I suggest to you that the agreement on the first refusal formed part and parcel of the deal as a whole. Mr. Akazawa was keen to preserve an option over Gilltown, to get Gilltown property if he was going to buy the European bloodstock’.

53. Mr. Firestone did not agree. He said ‘I don’t recall that he had. We had given him a right of first refusal. It wasn’t conditional. He had asked for the right of first refusal’.

54. Later in his evidence Mr. Firestone makes it perfectly clear that Mr. Akazawa was a good customer and a friend of his. He gave him the first refusal not because of any legal obligation but because he liked doing business with him and he hoped to do business with him in the future. This in fact proved to be correct because subsequently he sold further livestock to Mr. Akazawa.

55. I have come to the conclusion that the document of first refusal is unsupported by any consideration, that it was a voluntary document given by Mr. Firestone in the hope of cementing business relationships. Nowhere in the evidence can I find any suggestion of it forming part of the overall deal notwithstanding the fact that it was signed contemporaneously with the other three contracts. I believe Mr. Akazawa’s approach to the entire transaction to be inconsistent with requiring the granting of the right of first refusal as a condition to the execution of the other contracts.

56. Accordingly it follows that the agreement being a voluntary agreement is unenforceable.

57. A further point arises in relation to this document. It is submitted by counsel for the Aga Khan that the right of first refusal acquired by Mr. Akazawa on 5 October 1989 was a personal obligation imposed on Mr. and Mrs. Firestone and undertaken by them. It is submitted that this obligation did not constitute an

58. In support of this argument counsel has referred to Manchester Ship Canal Company v Manchester Racecourse Company [1901] 2 Ch 37 in which the Court of Appeal had to consider this among other points. In that case an agreement between a racecourse company and a canal company contained a clause that if the racecourse should be at any time proposed to be used for dock purposes the racecourse company should give the canal company the first refusal therefor. The relevant part of the clause in question read as follows:-

59. If and whenever the lands and hereditaments belonging to the racecourse company, and now used as a racecourse, shall cease to be used as a racecourse or should the aforesaid lands and hereditaments be at any time proposed to be used for dock purposes, then and in either of such cases the racecourse company shall give to the canal company the first refusal of the aforesaid lands and hereditaments en bloc . . .’.

60. In dealing with this clause the judgment of the court delivered by Vaughan Williams LJ stated:-

61. Then it was objected that clause 3 could not be enforced against the Trafford Park Company who are only alienees on the land. Farwell J thought that clause 3 created an interest in land and that this objection could be thus answered. We do not think that clause 3 does create an interest in land. . . .

62. That judgment was referred to in Murray v Two Strokes Ltd [1973] 3 All ER 357. In the course of his judgment Goulding J said at p. 361:-

63. Nonetheless I have there a judgment of the court not merely an observation of an individual Lord Justice, overruling no less a master of property than Sir George Farwell, and delivered, as the passage which I have read above shows, after consideration of the authorities. The judgment was also a reserved judgment. It has not been suggested that there is any subsequent authority or statute which weakens the force of what Vaughan Williams LJ said, nor am I able on any material point to distinguish the right given in the 1960 agreement from the right of first refusal which the Manchester Ship Canal Co. had. I must accordingly hold that the contractual rights of the defendant company do not constitute an interest in land.

64. Based on the foregoing authorities I am of the opinion that the most that Mr. Akazawa could have acquired in this case was no more than a contract binding Mr. and Mrs. Firestone which required them to give him an option to purchase the land in accordance with the agreement. It did not constitute an interest in the land.

65. A number of additional arguments were addressed to me on this aspect of the case which I do not need to consider having regard to my findings above.

66. On behalf of Mr. Akazawa, counsel assembled two arguments in support of Mr. Akazawa’s contract of 9 January 1990 executed pursuant to the rights which he considered he had under the first refusal option. However, both of these arguments rely for their validity on the assumption that the first refusal contract of 5 October is a valid and binding contract supported by consideration. Having found that it is not, I find it unnecessary to deal with the first two arguments.

67. The third argument advanced by counsel for Mr. Akazawa can be summarized as follows. He says that in fact Mr. Akazawa is the only genuine purchaser for value without notice. He says that on the completion of his contract he paid a deposit of 1.2 million dollars, that he is the only person who has parted with value and that he did so without any prior notice of any contract on the part of the Aga Khan. He accordingly argues that since the Aga Khan has not parted with any consideration the equities are not equal and that his contract of 9 January should prevail. I find myself unable to accept this argument. Finding as I do that Mr. Carnegie and Mr. Broughton entered into a valid binding contract the one agreeing to purchase and the other agreeing to sell on behalf of their principals there clearly was an exchange of consideration and accordingly Mr. Akazawa, notwithstanding the fact that he has actually parted with money, is in no stronger position in relation to consideration.

68. It follows from my findings that in the first of the above entitled actions the Aga Khan is entitled to an order for the specific performance of his contract of 27 November 1989. That being so Mr. and Mrs. Firestone cannot make title to Mr. Akazawa and his claim for specific performance must fail.

69. With regard to the date for the closing of the contract I would, in the ordinary way, fix a closing date with the same interval as originally agreed by the parties to the original contract. However, Mr. Akazawa is in occupation of the lands and must have time to vacate the lands. I therefore fix the closing date as six months from today’s date.

70. With regard to Mr. Akazawa’s contract, he is entitled to damages in lieu of his claim for specific performance. On the assumption that he wishes to proceed with this claim I will give him liberty to mention the matter, on notice to Mr. and Mrs. Firestone, to have a date fixed for the hearing of that issue.

71. The Aga Khan is entitled to the costs of his action against Mr. and Mrs. Firestone, to be taxed in default of agreement.

72. The costs of Mr. Akazawa of this hearing will be awarded at the conclusion of his assessment of damages against Mr. and Mrs. Firestone.

73. There will be a stay on my order in each case for 21 days, the stay to continue in the event of the service of notice of appeal, on condition that if the appeal is unsuccessful the appellants pay interest upon the costs if the costs are, in the final result, awarded against them.