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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Mc Kenny -v- Martin [2010] IEHC 293 (19 May 2010)
URL: http://www.bailii.org/ie/cases/IEHC/2010/H293.html
Cite as: [2010] IEHC 293
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Judgment Title: Mc Kenny -v- Martin Composition of Court: Judgment by: Laffoy J. Status of Judgment: Approved |
Neutral Citation Number: [2010] IEHC 293 THE HIGH COURT 2006 1286 P BETWEEN GERALD McKENNY PLAINTIFF AND
ALEX MARTIN DEFENDANT Judgment of Miss Justice Laffoy delivered on the 19th day of May, 2010. Representation of the parties
Procedural application 3. The position in relation to that motion is that, the defendant’s solicitors having sent the counter-claim document by letter to the plaintiff’s solicitors nine months after the defence was delivered, the plaintiff’s solicitors responded promptly on 29th March, 2007 stating that they were taking their client’s instructions in relation to it. The matter was not pursued at that stage, notwithstanding that a motion was brought before this Court in January 2007 for an order vacating a lis pendens which had been registered by the plaintiff. That motion was subsequently amended in May 2007 to include an application for an order striking out the plaintiff’s claim on the grounds that it was frivolous or vexatious or that it must fail. The motion was heard on 6th June, 2007. An order was made on that day which preserved the lis pendens in relation to the site the subject of the contract between Mr. McKenny and Mr. Martin and refused the application to dismiss. 4. The matter of the counter-claim was not raised again by the defendant’s solicitors until January 2009, when they wrote to the plaintiff’s solicitors indicating that they would rely on Order 28, rule 12 of the Rules of the Superior Courts and would make an application at the hearing for an order pursuant to that rule. If I may say so, it was a bit presumptuous of the defendant’s solicitors to assume that the Court would allow an amendment to a pleading on foot of a motion which issued less than a week before the listed hearing date. The fact that the defendant’s solicitors were aware for three months that the plaintiff was not legally represented compounded matters. In my view, the defendant’s solicitor’s application was much too late and it would have been unfair and unjust to the plaintiff to accede to it. It was refused. 5. I will turn now to the substantive issues in the proceedings. The substantive proceedings 7. On 29th July, 2002, Mr. Martin’s solicitors, Richard H. McDonnell, sent contracts to Mr. McKenny’s solicitors. Mr. John Mulvihill was the solicitor in the firm of Richard H. McDonnell dealing with the transaction. He testified at the hearing, although the firm of Richard H. McDonnell did not act for Mr. Martin in these proceedings. 8. The contract was in the standard form conditions of sale published by the Incorporated Law Society (2001 Ed.). The important provisions, for present purposes, are three of the special conditions. 9. Special condition 4 as it originally appeared in the contract provided:
10. Special condition 8 provided:
11. Special condition 10, as drafted by Mr. Martin’s solicitors, provided that the sale should be completed on 9th August, 2002. However, that special condition was amended by the solicitors for Mr. McKenny to provide that the sale was to be completed “seven days after the issue of formal grant of planning permission”. 12. Mr. McKenny signed the contract in duplicate. He furnished the deposit of €31, 743.45, which he drew down from the Credit Union, to his solicitors. Both parts of the signed contract together with the deposit were returned by Mr. McKenny’s solicitors to Mr. Martin’s solicitors, who received them on 14th August, 2002. Mr. Mulvihill testified that he contacted his opposite number in the office of Mr. McKenny’s solicitors seeking permission to release the deposit to Mr. Martin. He got that permission. He sent the deposit cheque to Mr. Martin’s bank with Mr. Martin’s consent. Accordingly, Mr. Martin had 83% of the agreed purchase price from mid-August 2002. 13. While Mr. Martin never signed the contract and one part thereof signed by Mr. Martin was not returned to Mr. McKenny’s solicitors, as is the usual practice, I am satisfied that the agreement in relation to the release of the deposit brought the contract into being, notwithstanding special condition 5. Although the case made in the defence is that there was no binding agreement, counsel for Mr. Martin acknowledged at the hearing of the action that there was a binding agreement in the terms of the contract. That was a realistic and a proper approach to adopt. I surmise that it was through oversight that Mr. Martin did not sign the contract. In any event, as Mr. Mulvihill testified, as late as 8th September, 2005, he notified Mr. McKenny’s solicitors that Mr. Martin was prepared to proceed with the sale upon payment of the balance of the purchase money. At that stage replies to requisitions on title were furnished together with a draft statutory declaration for the purposes of the Family Home Protection Act 1976. 14. In the interim, Mr. McKenny had made three applications for planning permission. At the hearing Mr. McKenny alleged that Mr. Martin frustrated his attempts to get planning permission. It is specifically pleaded in the statement of claim that Mr. Martin caused his solicitors to write to the planning authority, Louth County Council, on 14th February, 2006 for the purposes of frustrating the grant of planning permission to Mr. McKenny. I find it unnecessary to make a finding on the allegation that Mr. Martin frustrated Mr. McKenny’s attempts to get planning permission. 15. Insofar as I consider it relevant for present purposes, the planning history is as follows:
(b) The second application was made on 31st July, 2003 (file No. 031030). On 13th October, 2003 Louth County Council issued a notification of decision to refuse that application on the ground that the proposed development (a dormer dwelling house with waste water treatment plant) would be prejudicial to public health, as Mr. McKenny had not demonstrated that the site was suitable for a waste water treatment system and details had not been submitted of associated excavation and mounding works required. (c) The third planning application was made on 29th August, 2005. It is clear from the correspondence from Mr. Martin’s solicitors to Mr. McKenny’s solicitors that, by early September 2005, Mr. Martin was aware that the third planning application had been submitted. It was ultimately refused, but the important point for present purposes is that it was still pending when Mr. Martin purported to withdraw from the contract, thus provoking these proceedings. 17. To say that Mr. McKenny was not best pleased by that suggestion is an understatement. I think Mr. Mulvihill stated that he was informed by Mr. McKenny’s solicitor that he was “livid”. In any event, things went from bad to worse, although not, I think, not due to the fault of Mr. McKenny or his solicitors. The chain of events was as follows:
(2) Mr. Martin’s response, in his solicitor’s letter of 14th February, 2006, was to state that “this transaction is at an end” and to return the sum of €31,743.45. At the same time, Mr. Martin’s solicitors wrote to the planning section of Louth County Council stating that he had withdrawn from the sale of the site to Mr. McKenny. (3) By letter dated 16th February, 2006 Mr. McKenny’s solicitors returned the cheque for €31,743.45 and indicated that they were relying on the contract and on part performance and inquired whether Mr. Martin’s solicitors had authority to accept service of proceedings. (4) The response of Mr. Martin’s solicitors, by letter of 23rd February, 2006, was that they had authority to accept proceedings. Once again, they sent the cheque for €31,743.45 to Mr. McKenny’s solicitors, where it has remained uncashed to the present day. 18. The nub of Mr. McKenny’s case for specific performance of the contract, as pleaded in the statement of claim, is that -
(2) it was part performed by Mr. McKenny by the release of the bulk of the purchase money to Mr. Martin and his expenditure on the site in connection with his planning applications, (3) Mr. McKenny fulfilled his obligations under the agreement and was ready, willing and able to perform all his obligations thereunder, and (4) Mr. Martin, to use legal terminology, wrongfully repudiated the agreement in refusing to complete the sale. 20. In my view, Mr. Martin was not entitled to “pull the plug” in February 2006. It is true that a long time had passed between the making of the deal in July/August 2002 and February 2006 – three and a half years. However, as I have emphasised earlier, special condition 4 provided for such extension of the period allowed to Mr. McKenny to obtain planning permission as might be agreed between Mr. Martin and Mr. McKenny. On the evidence, there can be no doubt that Mr. Martin, implicitly, if not expressly, agreed to the extension of the period to beyond the date on which Mr. McKenny submitted his third application, which was 29th August, 2005. That is clear from what transpired in September 2005. It was only when Mr. Martin perceived that Mr. McKenny might be successful in his planning application that he decided that he wanted more money or, alternatively, he would renege on the deal. In my view, Mr. Martin was not entitled to withdraw from the sale unilaterally and peremptorily while Mr. McKenny’s third application for planning permission was pending. Accordingly, Mr. Martin was in breach of contract in purporting to withdraw from the sale on 14th February, 2010. Mr. McKenny did not treat that breach as bringing the contract to an end, as he might have. He made it clear that the contract continued in being and that he wanted it enforced. 21. The position on the ground, over the four years since these proceedings were initiated, is that Mr. McKenny is in possession of the site. His evidence was that he currently has material, for example, scaffolding, on the site and that he has a lorry parked there. He continues to hope to get planning permission for the site. However, his third attempt was not successful, nor was a fourth attempt. That last planning application was made on 9th May, 2006 (file No. 06549). Notice of intention to refuse the application was issued by Louth County Council on 23rd June, 2006. Mr. McKenny appealed to An Bord Pleanála but his appeal was unsuccessful on two grounds. The first was that it was the policy of the then current development plan for County Louth that not more than four dwellings should be permitted per landholding except where family members were concerned and that the proposed development would contravene this policy. That state of affairs was contributed to by the fact that Mr. Martin had sought and obtained planning permission for an adjoining site. The second ground for rejecting the appeal was that An Bord Pleanála was not satisfied, on the basis of submissions made on the planning application and on the appeal, that the site could be drained satisfactorily, notwithstanding the proposed use of a proprietary waste water treatment system, so that the development would be prejudicial to public health. 22. As I have stated, Mr. McKenny is optimistic that he will be able to obtain planning permission. The basis of this optimism is that the current development plan for the area does not contain the “four dwellings” restriction. 23. Mr. McKenny told the Court that the remedy he wishes to pursue is to get the site, that is to say, specific performance. He is still making repayments in the sum of €100 per week to the Credit Union in respect of the sum he borrowed to pay the deposit in 2002. His evidence was that he has paid €50,000 to the Credit Union already. In response to a question from the Court, he stated that at this stage he probably will have “to take his chances” on getting planning permission. I understand this to mean that he is prepared to waive special condition 4 of the contract.
Decision 25. Accordingly, it seems to me that the proper course both on the facts and in law, and, in particular, having regard to the Court’s equitable jurisdiction, is to make an order for specific performance of the contract but excluding special condition 4 so as to give effect to Mr. McKenny’s waiver of that condition. This means that on payment of the balance of the purchase money (€7,748.69) by Mr. McKenny to Mr. Martin, Mr. Martin will have to transfer the site to Mr. McKenny and furnish him with marketable title to it in accordance with the contract. In order that the parties may avoid the cost and expense of further appearances in Court, I will direct that the contract, subject to the exclusion of special condition 4, be completed by 18th June, 2010. 26. The plaintiff also has a claim for damages in addition to specific performance. The losses he itemised were consultants’ fees in the sum of €3,000 in relation to his various planning applications and the spreading of soil on the site, as requested by Louth County Council, as planning authority, at the cost of €1,100. All of that expenditure related to Mr. McKenny’s endeavours to comply with his obligations under the contract and it must be assumed that he got value for the money he expended. In my view, that expenditure cannot be laid at the door of Mr. Martin. Accordingly, no damages are awarded to the plaintiff. 27. On the issue of costs, I find it peculiar that an action in relation to the sale of a site measuring less than an acre, the purchase price of which is less than €40,000, should be the subject of a High Court action. I would assume that the rateable valuation of the site, or even if it is not separately valued, the holding of which it forms part, is less than €253.90, the jurisdictional limit of the Circuit Court. I do not intend making any decision in relation to costs until such time as there is evidence of the rateable valuation before the Court. 28. I will list the matter to deal with the question of costs on 22nd June, 2010 at 10.30am.
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