Neutral Citation No: [2005] IEHC 314
[2003 No: 13120P]
BETWEEN
PLAINTIFF
DEFENDANTS
Judgment of Ms. Justice Finlay Geoghegan delivered on the 7th day of July 2005
The plaintiff's claim is for damages for specific performance of a Contract for Sale which is an agreement in writing dated the 7th May, 2003, made between the plaintiff and the first named defendant whereby the plaintiff agreed to purchase and the defendant agreed to sell the property described in the particulars therein in consideration of €520,000 ("the Contract"). The Contract incorporated the Law Society general conditions of sale. The plaintiff also has ancillary and alternative claims for damages.
The proceedings were issued by plenary summons on the 25th November, 2003, against the first named defendant alone. In February, 2004 the plaintiff became aware that the same or substantially the same property was alleged to have been sold by the first named defendant to the second named defendant. On the 2nd November, 2004, an order was made adding the second named defendant to the proceedings.
Proceedings
The proceedings were heard before me over four days at the end of April, 2005. During three of those days oral evidence was given by the plaintiff, two directors of the first named defendant, the second named defendant, the solicitor for the plaintiff, the solicitor for the second named defendant, the architect for the plaintiff and the engineer for the first named defendant. In addition all correspondence between the parties, including certain correspondence between the plaintiff and the first named defendant which had been "without prejudice" but in respect of which a claim to privilege was withdrawn, was also agreed as part of the evidence. Likewise the contracts for sale between the plaintiff and the defendant dated the 7th May, 2003, and the first named defendant and second named defendant dated 10th November, 2003, and certain other documents were admitted in evidence.
Facts
Certain of the facts referred to below were not in dispute. Insofar as facts were in dispute the following statement of the facts includes my findings of fact.
The plot of land at issue between the plaintiff and the first named defendant is part only of Folio 12382 Co. Longford. It is situated on the main road at the exit of Edgeworthstown in the direction of Longford. The first named defendant is a development company and owned an adjacent site upon which it was proposing to build houses. Part of the planning permission for such houses required the use of a portion of Folio 12382 as an access road, footpaths and green space.
Prior to the sales, the subject matter of these proceedings, the first named defendant had sold a small portion at the south eastern corner of Folio 12382 to Mr. Kane who has an adjacent garage business.
Folio 12382 is the site of the old mart in Edgesworthtown. The mart buildings remain on the site.
The site had been for sale for approximately two years prior to April, 2003. In April, 2003 the second named defendant made enquiries through his solicitor, Ms. Karen Clabby, about the site. Ms. Clabby inspected the site with an architect and with a Mr. Tom Groarke, a director of the first named defendant. At that time there were no physical features to indicate the proposed boundary on the south western/western/north western side of the site (to which I will hereafter refer to as the western boundary or side) between the portion being sold and that being retained for the access road, footpaths and green area. Further there was no physical boundary identifying the small plot sold to Mr. Kane in the south eastern corner. The southern boundary was identified by the main road and the eastern boundary had a fence. Mr. Groarke put yellow markings at certain points on the site to roughly identify the proposed boundary on the western side of the portion to be sold.
The second named defendant agreed a price of €480,000 and paid €20,000 through his solicitor Ms. Clabby to the auctioneers then acting for the first named defendant as a booking deposit. Prior to a Contract in writing being furnished Ms. Clabby was informed by the auctioneers for the first named defendant on 16th April, 2003, that the first named defendant was not proceeding with the sale as there was a dispute between the directors of the first named defendant about the sale. Ms. Clabby confirmed via telephone conversation with Mr. Tom Groarke that the sale was not proceeding by reason of a dispute between the directors.
The plaintiff is a supermarket owner. He has what he describes as a small supermarket in the centre of Edgesworthtown. On the 14th April, 2003, he received a phone call from a Mr. Pat McGarry to ask if he was interested in purchasing the mart site and if so he was to ring Mr. John Duffy (no relation) who was a director of the first named defendant. He rang Mr. Duffy on Good Friday. There is disagreement as to precisely how the plaintiff and Mr. Duffy reached agreement on a figure of €520,000 but there is agreement that such a figure was agreed on the following Tuesday or Wednesday. I have concluded on balance that the plaintiff was not made aware at this stage of the precise acreage of 2.05 acres though as a matter of probability he was aware of the approximate size of the site. He stated in evidence that he had a letter from the auctioneers which referred to 2.3 acres. I have concluded as a matter of probability that the plaintiff was made aware that the vendor was retaining a portion of the mart site for the purposes of an access road, footpaths and green area but was not made aware by Mr. John Duffy of the yellow markings. The plaintiff was made aware that it was to be a direct sale without the intervention of auctioneers and that it had to be completed within three weeks.
The plaintiff instructed Mr. Vincent Crowley of Collins Crowley & Co., Solicitors. Draft contracts were furnished to him by the first named defendant's solicitors, Kilrane O'Callaghan & Co., by letter of the 23rd April, 2003, with an indication that they were instructed that the plaintiff would be signing the Contract on Friday 25th April, 2003. The particulars in the draft Contract describe the site being transferred as "2.05 acres or thereabouts". Prior to signing the Contract the plaintiff was aware of the area of the site being sold and I have concluded had seen the yellow markings on the site but was not told they were definitive boundary marks.
The plaintiff's solicitor amended special condition No. 6 (which is not at issue) and special condition No. 7, which related to the wall to be built around the portion being sold to Mr. Kane, which is at issue. The Contracts with such amendment, signed by the plaintiff, and a deposit in the sum of €52,000 were returned on the 28th April, 2003. The Contracts were signed on behalf of the first named defendant on the 7th May, 2003, as returned save that initially the closing date was specified to be 3 weeks from the date of the Contract and it was changed by the first named defendant's solicitors to two weeks with an explanation that one week had already passed since the Contracts had been furnished. No objection was taken to this. Accordingly the sale was due to be completed on the 21st May, 2003.
On the 15th May, 2003, the solicitor for the plaintiff furnished requisitions and a draft transfer and sought a copy of a map. The requisitions were replied to on the following day and on the 21st May, 2003, a copy map was furnished. Minor points were raised on the requisitions which are not relevant and on the 4th June, 2003, substantive criticisms were justifiably made by the solicitor for the plaintiff of the colouring and legend on the map furnished. These were responded to by letter of the 4th June, 2003, and a new map with altered colourings and legend enclosed. In evidence the solicitor for the plaintiff confirmed that as of receipt of the revised map on the 5th June, 2003, he was satisfied that he had a map which could be used for the transfer.
In the meantime there were two important meetings on the site. The first was on the 6th May, 2003, and attended by the plaintiff, his architect Mr. McHugh and Mr. Tom Groarke, a director of the first named defendant. The second took place on the 5th June and was attended by those three gentlemen and Ms. O'Hara, the engineer for the defendant.
The evidence of all four as to what transpired at these meetings differed in relation to some matters. Inevitably in respect of meetings which took place approximately two years prior to the hearing there will be differences in recollection. I have concluded on the evidence given that as a matter of probability the account of the meetings given by Mr. McHugh, the architect for the plaintiff, is closest to what transpired. I have made the following findings in relation to those meetings:
1. Prior to the first meeting Mr. McHugh had been instructed by the plaintiff that he was purchasing 2.05 acres excluding the public road.
2. At that meeting Mr. Groarke confirmed that the area being transferred was 2.05 acres.
3. At the first meeting there were yellow markings on the walls of the mart and elsewhere and Mr. Groarke indicated that he had put on those marks as a rough guidance of the proposed western boundary for the site being sold. Further that they were not marks which could be relied upon to properly determine the western boundary. The plaintiff at that time did not suggest they had previously been given to him as definitive markings.
4. Mr. Groarke, at Mr. McHugh's request, agreed that he would have his engineer mark definitive points from which the western boundary of the site could be deduced.
5. The purpose of Mr. McHugh attending the site was to advise the plaintiff as to the area he was obtaining by reference to the actual western boundary marked on the ground.
6. There was considerable uncertainty at the first meeting as to what was the accurate line for the western boundary. In particular it was pointed out by Mr. McHugh that on the map attached to the Contract the western boundary was a straight line whereas on the ground it was "meandering somewhat".
7. At all times Mr. Groarke made clear that his main concern was that he would have enough space between the western boundary of the property being sold and the western boundary of the folio to construct a road and footpaths to serve the housing development which was going to commence at the rear of the mart site.
8. On the 5th June, 2003, Ms. O'Hara met with Mr. Groarke at the site prior to meeting with the plaintiff and Mr. McHugh.
9. Ms. O'Hara was the person who had prepared the map attached to the Contract and the one furnished for use in the transfer. The maps had been prepared by her with reference to a map used in the application for the planning permission for the houses at the rear of the mart site. Her instructions were to include in the property for sale that portion not required for the access road, footpaths and green space as per the planning permission. She had prepared the maps by indicating a boundary which she considered excluded those requirements.
10. There were no physical features on the western boundary which identified the boundary line of the site being sold as marked on the map. The fact that part of the old mart building went through the proposed boundary line at certain points made identifying and marking the boundary line on the ground more difficult. Ms. O'Hara and a colleague identified certain physical features such as a bridge on the road and a drain at the north eastern point which she considered were identifiable from the copy folio map and on those points scaling back from the map she had prepared. She attempted to mark with red paint appropriate points to identify the intended boundary line. Certain of these were on the old mart building. Others were on the ground, a wall and one on a sheet of galvanised iron.
11. Ms. O'Hara has no recollection of using a ranging rod. Mr. McHugh was clear in his evidence that a ranging rod was there and appeared to him to have been used as a marker. I have concluded on balance that a ranging rod was used by Ms. O'Hara and her colleague as a marking point on the site. On the 5th June, 2003, when Mr. McHugh and the plaintiff arrived Ms. O'Hara indicated the points marked. She did not give to Mr. McHugh any dimensions she had used. Mr. McHugh identified the marks on that day.
12. Mr. McHugh returned to the site a third time a few days later and carried out a digital survey using electronic equipment known as a total station and data logger. He measured the total area enclosed by the site now identified with the red markings at 1.95 acres. Mr. McHugh sent to the plaintiff's solicitor a report dated 27th June, 2003, following this survey.
13. Whilst an attempt was made at the hearing to explain the difference in area by reference to the possibility of the red mark on the galvanised sheet having been moved, I have concluded as a matter of probability it was not so caused.
In the meantime on the 23rd June, 2003, the plaintiff's solicitor had sent an engrossed transfer to the first named defendant's solicitor and indicated that the revised map received on the 5th June, 2003, had been sent to the plaintiff's architect for his comments.
On the 4th July, 2003, the plaintiff's solicitor wrote to the first named defendant's solicitor setting out the conclusion of the plaintiff's architect, Mr. McHugh, following his survey. In substance they were:
a. That the area enclosed by the boundary marked on the ground was only 1.95 acres instead of 2.05 acres as specified in the particulars of the property on the Contract: and
b. The line of the western boundary on the ground differed from that on the map provided, and in the position of certain of the corner points.
No response was received to the letter of the 4th July, 2003, until a letter of the 15th August, 2003. In that, the first named defendant's solicitors appeared to attempt to explain the difference in area by reason of scaling from copy maps and a digital survey. They then stated:
"notwithstanding the above, our client is prepared to accommodate your client insofar as the corner points of 'plot C' [the plot being transferred] is concerned and amend the corner points accordingly."
They then indicated their client was anxious to close as soon as possible and asked the plaintiff's solicitor to confirm that the closing documentation was executed.
By this time the plaintiff's solicitor was on holidays and the first named defendant's solicitor was so informed by letter of the 20th August, 2003, but that he would be returning on Monday the 25th August, 2003. The first named defendant's solicitor then wrote on the 28th August, 2003, seeking that the matter be closed without further delay and seeking confirmation that he was in funds and ready to close. It was also indicated that in default of hearing by return in those terms that the first named defendant reserved the right to serve a completion notice and charge interest on the unpaid balance of the purchase monies.
The plaintiff's solicitor replied by letter dated 1st September, 2003, indicating that he had only now returned from holidays and stated "we are in the course of writing to you on the matter and will revert early this week".
It is not clear whether without waiting for this letter or in response to this letter the solicitor for the first named defendant sent a 28 day completion notice dated 2nd September, 2003. It is stated therein that "the Vendor is ready, willing and able to complete and has been so ready, willing and able to complete from the 21st May 2003". The latter was the closing date stipulated in the Contract. The vendor also claimed interest at the stipulated contract rate of 12% per annum for the period from the 21st May, 2003, and the date of actual completion.
On the following day, the 3rd September, 2003, the plaintiff's solicitor wrote again. The letter makes no reference to the Completion Notice. Nothing turns on whether or not the Completion Notice was received prior to that letter being sent. The letter indicated that a further report was being sought from the architect on the points made by the first named defendant's solicitors in the letter of the 15th August, 2003. It also then raised for the first time the fact that there had not been compliance with special condition No. 7 of the Contract of sale in relation to the wall between the site being sold and the plot sold to Mr. Kane. The first named defendant's solicitor responded on the 5th September, 2003, in relation to the wall, asserting that this was the first time that they had received a specific requirement regarding the wall and indicating that it would be dealt with and would be in place by the 8th September, 2003.
On the 15th September, 2003, the plaintiff's solicitor responded in relation to the boundary difficulties and repeated the contention that on Mr. McHugh's survey the area being transferred as identified on the ground was only 1.95 acres resulting in a net shortage of 0.1 of an acre. It was indicated that the plaintiff would be prepared to complete the contract with a reduction of the purchase price of €52,000 (being the amount referable to 0.1 of an acre having regard to the purchase price of €520,000 for 2.05 acres). A meeting was also requested between the respective engineers on site.
Thereafter there was a series of correspondence between the solicitors for the plaintiff and first named defendant, some of which at the time was "without prejudice" but which at the hearing by consent was put into evidence. Having regard to that correspondence and the evidence given by the plaintiff, Mr. Groarke and Mr. Crowley, solicitor for the plaintiff, I have reached the following conclusions as to what happened in this period:
1. The first named defendant maintained that it was entitled to rely upon the Completion Notice. The plaintiff at all times asserted that it was an invalid Completion Notice.
2. There were negotiations as to a reduced purchase price.
3. The plaintiff's solicitor continued to seek a meeting on site between the architect and engineer. This was resisted by the solicitors for the first named defendant on the basis that it had no purpose. In the initial period the purpose of this meeting appears to have been to agree new corner points on the western boundary.
4. An allegation was introduced in the course of the correspondence by the solicitor for the plaintiff that the boundary markings were altered after contracts were signed i.e. from the yellow markings to the red markings and the site reduced.
5. By a letter of the 7th October, 2003, the first named defendant reached a position and through its solicitors indicated that a further meeting at this stage between the engineers was fruitless and that the plaintiff had two choices available: he could complete the purchase on the basis of a reduction in the purchase price provided confirmation was given that he was agreeable to that and the sale could be closed within that week: or if he was not prepared to take up the offer the first named defendant would rely upon the Completion Notice and proceed in accordance with its terms.
6. One of the grounds relied upon by the solicitor for the plaintiff for the invalidity of the Completion Notice and to resist being forced to complete was that there remained substantial uncertainty as to the identity on the ground of the lands to be transferred. In his letter of the 23rd September, 2003, he stated:-
"In your letter of 15th August you state that your client is prepared to amend the corner points of 'Plot C', presumably so as to ensure that the lands to be transferred in fact comprise 2.05 acres in accordance with the contract. We are however instructed that to date no steps have been taken to amend the boundaries in this way. The position therefore is that there still remains substantial uncertainty as to the identity on the ground of the lands to be transferred. That being so, your client cannot seek to rely on the Completion Notice, as on the date of service thereof he could not be said to have been ready, willing and able to close the sale. It is similarly self evident that no court would compel our client to close a transaction when the land to be transferred to him had not yet been definitively identified. Accordingly we repeat again, and have been so advised by Senior Counsel, that the Completion Notice is invalid and of no effect."
7. In response to the option given on the 7th October, 2003, agreement appears to have been reached upon a reduced price of €500,000 but the solicitor for the plaintiff stipulated on instructions that "the boundaries must be marked and physically defined or permanently marked at the corners on the ground". It was further stated in the letter of the 9th October, 2003, that the plaintiff's lending institution also insisted upon this as the funds were being borrowed.
8. I have concluded on this correspondence and the evidence of Mr. Groarke, which I accept on this point, that at this time the first named defendant became concerned that the plaintiff was not intending to complete the purchase of the property.
9. Ultimately on the 14th October, 2003, by a fax of that date the solicitors for the first named defendant persisted in a denial of any alteration in the boundaries since the Contract and that there was nothing to be gained by any further meeting on the site as the boundaries had been marked out. They also confirmed their client's agreement to complete the sale at a price of €500,000 but subject to confirmation being received from the solicitor for the plaintiff by return that the balance of the sum due of €448,000 would be lodged with them by the evening of the 15th October, 2003, to be held in trust until the closing documents were furnished to the solicitor for the plaintiff. It was also stated in that letter that in default of the receipt of the purchase monies that there would be no further extension of the time and that the first named defendant "will rely on the Completion Notice already served and proceed in accordance with same".
10. The response in writing of the plaintiff's solicitor was by letter of the 22nd October, 2003, which was probably sent by fax. In that letter the solicitor for the plaintiff maintained his position that "the boundaries are not adequately defined". He stated his instructions were not to complete until they had been suitably defined. He also indicated that the defendant could not elect to close a transaction on one days notice and repeated that the Completion Notice was invalid. Finally it was stated "please note that if you confirm by return that you are acting on the Completion Notice we will register the contract and will have to issue proceedings".
11. No response appears to have been received to that letter and a reminder was sent by a fax of the 31st October, 2003. That elicited a response, dated 31st October, 2003, which appears to have been received by post which was the first open correspondence for some time from the solicitor for the first named defendant. In it he simply referred to the Completion Notice which had not been complied with and then stated "Our client is therefore now relying on the Completion Notice served and is proceeding accordingly.
At this point the solicitor for the plaintiff appears to have accepted that the first named defendant was not prepared to continue further negotiations as to how this sale might be completed. On the 6th November, 2003, the solicitor for the plaintiff wrote confirming that counsel had been briefed to draft High Court proceedings and requesting confirmation from the solicitor for the first named defendant that he would continue to hold the deposit as stakeholder pending resolution of proceedings. When no response was received to this the solicitor for the plaintiff wrote further on the 11th November, 2003, seeking a reply by return of fax to the letter of the 6th November, 2003, and confirming that proceedings were in the course of being issued and that a lis pendens would be registered and the land registry formally notified. It was also stated in that letter that their instruction from the plaintiff was that he believed the first named defendant to be in the course of selling to another party and confirmation was sought and an injunction threatened. A response was received dated the 12th November, 2003, which revisited the dispute in relation to the boundaries (reflecting a possible misunderstanding of the plaintiff's position) and seeking to justify the service of the Completion Notice. It was indicated that proceedings would be fully defended and counterclaim made. On the 14th November, 2003, the plaintiff's solicitor sought confirmation that the solicitor for the first named defendant continued to hold the deposit and that the premises were not in the course of being sold. This solicited a "without prejudice" response confirming that the deposit was being held and indicating a willingness to take instructions as to whether his client wished to return the deposit if the solicitor for the plaintiff so wished. In response to the alleged sale it was stated "this property belongs of course to our clients and our client is free to do with same as they wish, and will not be accountable to your client that regard."
The next step on behalf of the plaintiff appears to have been the issue of a plenary summons on the 25th November, 2003, and the lodging of papers applying to register a lis pendens in the land registry on the 27th November, 2003. On the 8th December, 2003, a letter was written to the solicitor for the first named defendant asking if they had authority to accept service of proceedings which were stated to have been issued 10 days ago and informing them of a lis pendens which had been registered against Folio 12382 Co. Longford. Ultimately in default of response the proceedings were served directly on the first named defendant and on the 22nd December, 2003, the solicitors for the first named defendant indicated that instructions had been given to enter an appearance.
The plaintiff and his solicitor only became aware of the sale of the property to the second named defendant in mid February, 2003. This sale was completed on the morning of 28th November, 2003, pursuant to a contract for sale dated 10th November, 2003. Prior to considering the position of the second named defendant it is necessary to consider the primary issues between the plaintiff and the first defendant.
Issues between plaintiff and first defendant
The plaintiff's primary claim is for specific performance of the Contract dated 7th May, 2003, between the plaintiff and the first named defendant. The first named defendant defends this claim in accordance with its pleadings and the submissions made on two distinct grounds:
1. The first named defendant served a valid Completion Notice in accordance with clause 40 of the General Conditions of Sale and the plaintiff not having completed within the period of 28 days it is entitled, pursuant to clause 41 of the General Conditions of Sale, to forfeit the deposit and resell the property without notice to the plaintiff.
2. Even if a valid Completion Notice was not served and the court is of the view that there remains a subsisting contract between the plaintiff and the first named defendant that the court should exercise its equitable jurisdiction so as to refuse an order for a specific performance. The grounds for this contention relied upon will be referred to further below.
Completion Notice
The parties were in agreement as to the relevant principles. At the date of service of the Completion Notice the first named defendant must have been ready, willing and able to complete the sale.
The plaintiff asserts the first named defendant was not so ready, willing and able on two grounds. The first, (not necessarily in order of importance) is that it had not complied with special condition No. 7 in relation to the wall to be constructed along the small boundary with the plot sold to Mr. Kane. Special condition No. 7 provided:
"The vendors shall arrange for a wall to be constructed on the area marked red on the map attached hereto prior to completion and the construction of the said wall, the dimensions and the materials used shall be agreed with the purchasers architect before the commencement of the said works."
It is not disputed on the facts by the first named defendant that such wall had not been constructed prior to the date of service of the Completion Notice i.e. 2nd September, 2003. It is submitted that prior to that date the purchaser had not given to the first named defendant his specifications and requirements for the wall. It is not alleged that any request had been made to the plaintiff for such specification.
The special condition in its ordinary meaning imposed two obligations on the vendors: an obligation to arrange for the wall to be constructed prior to completion and also an obligation prior to the commencement of the works for the construction of the wall to agree the dimensions and material used with the purchaser's architect. It was therefore a matter for the vendors to approach the plaintiff or his architect and seek to agree the dimensions and materials to be used prior to commencing construction. It was further the vendor's obligation to arrange for the construction of the wall prior to completion of the Contract. This had not been done prior to 2nd September, 2003. Accordingly on this ground alone I am satisfied that the first named defendant was not ready, willing and able to complete the Contract for sale on the 2nd September, 2003, and the Completion Notice is invalid.
I have also concluded that the second ground of objection to the validity of the Completion Notice has been made out. The first named defendant was not in my view on 2nd September, 2003, ready, willing or able to complete a sale to the plaintiff lands which it could be said with certainty were the subject matter of the contract for sale of the 7th May, 2003.
I have reached this conclusion for the following reasons.
The lands being sold were described in the contract for sale as:-
"ALL THAT AND THOSE part of the property of the townland of Edgeworthstown in the Barony of Ardagh and County of Longford being part of the property described in Folio 12382 of the Register of the County of Longford comprising 2.05 Acres or thereabouts statute measure being the property shown shaded green on the attached map hereto held by the Vendor in fee simple."
The map attached to the contract was prepared by Ms. O'Hara, the engineer for the first named defendant. In evidence she explained how she had prepared this as a "draft map" to identify the site from a much photocopied copy of the land registry map. She also referred to it as a "preliminary map". It also appears that it was on this map that she measured the area being sold with a planimeter as being 2.05 acres. In handwriting on the map attached to the contract is the legend "area shaded green 2.05 acres excl. public road" and it is signed by Ms. O'Hara.
As already stated there were no physical boundaries on the site to determine the location of the western boundary to the site being sold. The south eastern boundary appears to have been determined by the sale to Mr. Kane.
The evidence of Ms. O'Hara was that she subsequently prepared what she described as a "property transfer map". She stated that this was prepared with more care from either an original land registry map or a copied land registry map. She also stated that the western boundary was more accurately shown on the property transfer map as being approximately parallel to the western boundary of the folio. It is obvious to the naked eye that there is a significant difference between the location and direction of the western boundary to the site being sold in the map attached to the original Contract from that in the map sent to the solicitors for the plaintiff and intended to be the map attached to the transfer.
Whilst it appears to me that it can be said that the first named defendant agreed to sell to the plaintiff an area within folio 12382 County Longford comprising 2.05 acres or thereabouts it cannot be determined with certainty, particularly on the western boundary where that area was to be located. I am further satisfied that the use of the description "2.05 acres or thereabouts" is a commonly used description to cover what might be considered to be insignificant variation from the area specified. What is insignificant will obviously depend upon the nature of the lands and the area being transferred. In an area such as this, of 2.05 acres of development lands, I am satisfied on the plaintiff's solicitors evidence that an area of .01 of an acre might be considered to be insignificant. Hence it does not appear that there was uncertainty in the area to be transferred.
The property transfer map must have been prepared by Ms. O'Hara prior to 21st May, 2003, as it was sent on that date by the solicitors for the first named defendant to the solicitors for the plaintiff albeit with incorrect colourings and an incorrect legend. No evidence was given that any measurement was done of "plot C" as specified by the obviously altered western boundary on that map. The evidence of Ms. O'Hara was that the legend attached was probably taken from her computer. It shows a total area for plot C to the centre of the public road of 2.22 acres. That legend is dated the 4th July, 2001.
The red markings placed on the ground on the 5th June, 2003, were marked out by Ms. O'Hara and a colleague on her own description "to the best of their ability" from the property transfer map. I have concluded on the evidence of Mr. McHugh that as a matter of probability the measurement of the area marked out by Ms. O'Hara was 1.9 acres. I have also concluded that there were differences in the location of certain of the corner points on the western boundary between the markings on the ground and the property transfer map.
Whilst an offer had been made on the 15th August, 2003, to meet to agree an alteration of the corner points no such meeting had taken place. There was no agreement as of the 2nd September, 2003, as to the identification on the ground of the property being transferred. There was no special condition included in the Contract as to how the new western boundary was to be identified on the ground. Having regard to the evidence of Ms. O'Hara as to the nature of the map used for the Contract I have concluded that it was not possible to identify in accordance with any general condition in the Contract the western boundary of the site to be sold by reference to the map attached to the Contract.
On the 2nd September, 2003, the first named defendant was willing to transfer the area identified by a boundary which would go through the red markings on the ground. Such boundary only surrounded an area of 1.95 acres. That was a significant difference from the area agreed to be sold in the context of development land of an area of "2.05 acres or thereabouts". Whilst a willingness had been expressed to amend the corner points, no agreement had been reached as to the boundary on the ground of the area of 2.05 acres or thereabouts to have been sold and there was no mechanism under the contract for determining same.
Counsel for the first named defendant submitted that even if there were what was considered to be a significant difference in the area enclosed by the red markings and that agreed to be sold in accordance with the particulars in the Contract, that such matter could be dealt with under condition No. 33 of the general conditions of sale. It does not appear to me that on the facts herein having regard to the uncertainties surrounding exactly the lands agreed to be sold that condition No. 33 applies. However even if it does so, in accordance with the decisions of the High Court in Keating v. Bank of Ireland [1983] I.L.R.M. 295 and O'Brien v. Kearney [1995] 2 I.L.R.M. 232 (with which I agree), a purchaser is not obliged to comply with a Completion Notice where the question of compensation for mis-description has not been settled.
Accordingly I have concluded on each of the above grounds that the first named defendant did not serve a valid Completion Notice on the 2nd September, 2003.
Plaintiff's entitlement to specific performance
The remedy of specific performance is discretionary. As John Farrell S.C. in the Irish Law of Specific Performance puts it as p. 223 "the relief may be withheld as an exercise of that discretion even where a plaintiff proves a valid contract and no particular defence or ground for refusal is established". However in the case of a contract for the sale of land the normal rule is for the court to grant specific performance and there is an onus on a defendant, once the plaintiff proves a valid contract, to establish a ground or grounds upon which relief should be refused.
In this case the primary ground upon which the first named defendant supported by the second named defendant submitted that the remedy of specific performance should be refused is by reason of the uncertainty surrounding the lands to be transferred under the Contract. In written and oral submission at the hearing the first named defendant submitted that the uncertainty was such that there did not exist a valid contract. However, no such case was made in the pleadings and that submission was only made at the end of the evidence. I have concluded that it would be an unfair procedure to the plaintiff if I were to entertain a submission that the uncertainty was such as to render the Contract invalid.
The defendants relied alternatively upon the principle again set out in Farrell on the Irish Law of Specific Performance at p. 7 where it is stated:
"[1.11] If a contract is "completely uncertain" it is equally void at law and in equity. Occasionally there is a degree of uncertainty which will lose the right to specific performance without also destroying remedies at law. As Lord Redesdale pointed out in 1805,
'…if it is certain to a degree, but doubtful as to the extent, equity would, I think, act infinitely more wisely in leaving the party to the old remedy by action for damages, than to run the hazard of doing injustice, in doing what is said to be more complete justice, by decreeing a specific performance.'
The burden is on the plaintiff to satisfy a court of an agreement, the terms of which 'are sufficiently certain to justify a decree for specific performance'. He may expect to fail if he does not satisfy the court of the certainty of the material terms even though it may believe that some complete and binding agreement was reached".
For the reasons which I have already set out above I have concluded that the contract for sale of the 7th May, 2003, between the plaintiff and the first named defendant did not describe with certainty the lands to be transferred herein nor did it include either in the general conditions nor by way of a special condition a mechanism by which the western boundary of the plot to be transferred was to be identified on the ground.
I have concluded that this is a case where the uncertainty surrounding the determination on the ground of the plot to be transferred is such that the court should depart from the normal rule and should now exercise its discretion to refuse an order for specific performance and to award the plaintiff damages in lieu thereof. I am reinforced
in that view by reason of the attitude of the plaintiff as demonstrated in the correspondence sent on his behalf by his solicitor in the month of September and first half of October, 2003. At that time, following the service of the alleged Completion Notice, as already stated there was at the time, what on the first named defendant's side were "without prejudice" offers as to the terms on which the sale might be completed. For much of the month of September, 2003 at least it appears that both parties were genuinely interested in completing the sale but yet no agreement could be reached as to the terms according to which the sale would be completed. In September, 2003 the plaintiff was both seeking a reduction in the purchase price and a meeting between respective engineers the purpose of which was to attempt to agree new boundaries from those marked with the red paint on the site. The plaintiff at this stage was resisting any attempt to compel him to complete the transaction and his solicitor stated in the letter of the 23rd September, 2003, ". . . no court would compel our client to close a transaction where the land to be transferred to him has not yet been definitively identified".
At no stage throughout this correspondence did either party suggest that the Contract provided a mechanism for determining the boundary of the lands which were to form part of the sale. Even when, in October, 2003, agreement appears to have been reached upon a reduced purchase price the solicitor for the plaintiff was maintaining as in the letter of the 22nd October, 2003, that "the boundaries are not adequately defined". By this point in time the solicitors for the plaintiff had introduced the requirements of the lending institution and created, whether unwittingly or not, what appears to me to have been a justifiable apprehension on the part of the defendant as to the plaintiff's then enthusiasm for completing the transaction.
I wish to make clear that the behaviour of the plaintiff in September and early October, 2003 simply confirms me in the view which I have formed. It of itself is not the primary reason for which I have determined the court should refuse an order for specific performance. It hardly seems equitable to grant an order for specific performance in favour of a party who has resisted completing a contract for sale upon the basis that the boundaries are not adequately defined when the contract itself does not provide any mechanism or special condition as to how those boundaries should be defined. Such definition in a manner acceptable to both parties remains dependent upon agreement being reached between the parties or their respective engineers or architects. The court has no power to compel such an agreement.
Notwithstanding that the plaintiff is not entitled to an order for specific performance, as the Completion Notice was invalid there remained a subsisting contract. The first named defendant was not entitled, in breach of that contract, to treat it as terminated and sell the lands to a third party. The plaintiff is now entitled to damages in lieu of specific performance.
Counsel for the plaintiff indicated that no claim was being made for special damages. It was submitted that a claim for general damages was being made upon the basis that the plaintiff intended to develop the mart site as a supermarket and that he has been delayed in doing that and benefiting from the anticipated expansion of business. No evidence was offered in support of this submission. No evidence was given of any difference in value of the site the subject of the sale between May, 2003 and the date of the hearing.
In the course of the hearing (at the end of the second day) an issue arose as to the nature of the claim for damages being made on behalf of the plaintiff. At that time having heard submissions on behalf of the plaintiff and the first named defendant, I determined that I would not leave over any issue of further evidence but would permit further submissions at the end of the hearing. Notwithstanding this ruling I have concluded that it is necessary for me in order to determine the appropriate amount of damages to which the plaintiff is entitled against the first named defendant to obtain further evidence in relation to the following matters only:
(a) Whether the solicitor for the first named defendant still retains the deposit paid by the plaintiff pursuant to the contract. If so, the amount of interest earned thereon to date. If not, the date upon which same was paid to the first named defendant.
(b) Whether any fees were paid by the plaintiff to Mr. McHugh or are due and owing by the plaintiff to Mr. McHugh for the work done by Mr. McHugh for the plaintiff in connection with the Contract in 2003.
(c) Whether any fees have been paid or are due and owing by the plaintiff to his solicitor in connection with the work done in connection with the Contract up until 22nd October, 2003.
In the event that the solicitor for the first named defendant still retains the deposit it is my intention to make an order directing the repayment of the deposit and interest earned thereon to the plaintiff as part payment of the award of damages to be made. In the event that the solicitor for the first named defendant retains the deposit he should continue to hold same until further order of this Court.
Lis pendens
As I have determined that an order for specific performance should be refused it is unnecessary for me to consider the impact on the sale to the second named defendant of the application to register a lis pendens lodged on behalf of the plaintiff on the 27th November, 2003. Further it appears to follow that an order should be made directing the Land Registry to vacate either the lis pendens (if registered since the date of the hearing) or the application for the lis pendens. I will hear counsel on the appropriate form of the orders to be made.
Approved: Finlay Geoghegan J.