THE SUPREME COURT
[Appeal No. 399/2010]
[High Court Record No: 2008 3676 P]
Dunne J.
Charleton J.
O’Malley J.
JLT FINANCIAL SERVICES LIMITED FORMERLY KNOWN AS LIBERTY ASSET MANAGEMENT LIMITED
PLAINTIFF/RESPONDENT
DEFENDANT/APPELLANT
JUDGMENT of Ms. Justice Iseult O’Malley delivered the 21st day of November, 2017.
Introduction
1. This is an appeal against a decree of specific performance and an award of damages made against the defendant/appellant (“the defendant”) by the High Court (Laffoy J. - see Liberty Asset Management Ltd v. Gannon [2009] IEHC 468). The order was made in respect of an agreement which, the High Court found, required the defendant to take over the leasehold interest held by the plaintiff/respondent (“the plaintiff”) in a property at No. 54 Northumberland Road, Dublin 4 (hereafter “No. 54”) in exchange for the plaintiff taking a lease of premises owned by the defendant. In so finding, the learned trial judge accepted that there was no sufficient note or memorandum of the relevant contract. However she found that there had been an agreement in principle that became a concluded contract when the plaintiff, in reliance on the agreement, fulfilled its part by taking the lease of the defendant’s property. She therefore held that the doctrine of part performance was applicable and that, although that doctrine had not been expressly pleaded by the plaintiff, the case had been sufficiently made out in the statement of claim and replies to particulars. Having regard to her findings of fact she further held that if the doctrine of part performance had not been available, equity would have afforded relief to the plaintiff by virtue of estoppel. The defendant had given what she considered to be a “clear and unambiguous assurance” to the plaintiff and could not be permitted to renege on that assurance.
Background Facts
2. In early 2006, the plaintiff company was carrying on its business from No. 54 while the defendant’s business was based in the adjoining premises, No. 52 Northumberland Road.
3. The plaintiff held a lease for No. 54 for a term of nine years and eleven months from the 11th June, 2003. The lease contained a “break clause” which allowed the tenant to terminate the lease after the expiration of the fifth year of the term, subject to a requirement of written notice to the landlord at least twelve months prior to that date. Thus, notice for the purpose of the clause would have to have been given on or before the 10th June, 2007. The break clause was personal to the plaintiff, in that the lease specified that it would not apply in circumstances where the plaintiff assigned the lease to a third party. It is also to be noted that the plaintiff had executed a deed of renunciation of its right to renew the lease on its expiry date.
4. The businesses of both parties were expanding and both were seeking larger premises. The plaintiff could not move without disposing of its interest in No. 54, because its parent company would not guarantee a lease in more than one premises at a time. The defendant, who was interested in purchasing No. 54, owned an unoccupied property at 8 Richview Office Park, Clonskeagh, in Dublin 14 (hereafter “Richview”). The original discussions were between Mr. Kevin O’Shaughnessy, a director of the plaintiff, who inspected Richview in March, 2006 and an estate agent acting on behalf of the defendant. On 11th May, 2006, Mr. O’Shaughnessy put forward a written proposal to the estate agent in relation to taking a lease of the Richview premises. The proposed terms, which are written in informal, bullet-point style, included the following:
“Understanding Gannons take over the lease of 54, Northumberland Road”.
5. On the 18th May, 2006, the estate agent wrote to the defendant’s solicitors, Smith Foy & Partners, setting out the terms that had been agreed in relation to the letting of Richview. The proposed tenant was Liberty Asset Management Limited; the tenant’s solicitors were O’Rourke Reid; the demise was the entire area of No. 8 Richview Office Park; the rent terms were “new 25 x FRI lease” with a break option at 15 years; the rent was set out, and a rent-free period was provided to facilitate refurbishment works. The last heading was “Rental Underwrite”, with the following text:
“Landlord to underwrite the rent of one floor for the period of 24 months from commencement of the Lease until such time as the tenants have sublet the space or occupied it themselves. Landlord to take over Liberty Asset Management’s Leasehold interest in 54 Northumberland Road, Dublin 4 (subject to landlord’s approval).”
6. Thereafter all correspondence was carried on between the firms of solicitors representing the parties.
7. On 31st May, 2006, a draft lease for Richview was sent from Smith Foy to O’Rourke Reid. The covering letter was not headed “subject to contract” and there was no denial of authority on the part of the solicitor. It stated that a number of specified matters had been agreed between the clients and would be incorporated in a “Side Letter”. These included the break option, the rent-free period, the underwriting of the rent of one floor, and the agreement by the defendant to take an assignment of the plaintiff’s existing lease of No. 54. The reference to this last point was in the following terms:
“We have also been instructed that our client has agreed to take an Assignment (subject to Landlord’s consent) of your client’s existing lease at 54 Northumberland Road, Dublin 4. Perhaps you would let us have the usual Contracts for Sale in respect of this aspect of the transaction.”
8. O’Rourke Reid replied on the 9th June, 2006, saying inter alia that they were arranging for the title documents in relation to No. 54 to be taken up and expected to have contracts ready the following week.
9. The correspondence continued for over a year and only letters of significance will be summarised here. Apart from the letter of the 31st May, 2006, every communication was headed “subject to contract” or some phrase having similar effect and/or contained a disclaimer of the solicitors’ authority to bind their clients.
10. A reply of the 14th June, 2006, from the defendant’s solicitors responded to certain queries about Richview and also sought confirmation of the date that the plaintiff would be vacating No. 54. On the 30th June, 2006, the plaintiff’s solicitors forwarded draft contracts and a copy of the 2003 lease and confirmed that they were seeking the requisite landlord’s consent. Further title and planning documentation in relation to No. 54 was forwarded on the 5th July, 2006.
11. By letter of the 18th July, 2006, dealing mainly with Richview the plaintiff’s solicitor said:
“We will write to you under separate cover in relation to the contracts for 54 Northumberland Road, but would ask you to note that obviously it will be a term of that Contract for Sale that completion will not take place until such time as our clients have actually taken up occupation of [Richview]. While our clients intend to take delivery of the Lease from the 1st of September next, occupation will not be until a number of months after that once fit-out works have been carried out. Therefore effectively our clients will not be moving out of 54 Northumberland Road until they are ready to move into 8 Richview Office Park. Completion on 54 Northumberland Road will be delayed accordingly.”
12. The separate letter of that date, dealing with No. 54, repeated that the plaintiff would not be in a position to complete the assignment of those premises until Richview was available for occupation. Smith Foy were asked to confirm that the contracts for sale could be amended accordingly.
13. On the 25th July, 2006, O’Rourke Reid wrote seeking confirmation that the draft contract and copy title for No. 54 were agreed. The letter went on:
“As confirmed in previous correspondence we will obviously require your client to execute Contracts for Sale in relation to [No. 54] once we have agreed the final terms of the Lease in relation to your client’s property at 8 Richview…”
14. On the 7th September, 2006, Smith Foy forwarded the contracts for No. 54 as executed by the defendant on the 6th September, together with requisitions on title. Some handwritten amendments had been made to the draft contract in that office. There was no consideration in the original document and a purchase price of €1 was inserted. The VAT clause had been deleted. Clause 5 in the contract had originally provided that the closing date was to coincide with the grant of a lease of Richview, but this had been largely crossed out and replaced with handwriting so that the clause now read:
“The closing date for this sale shall be the [blank] day of [blank] 2006 or 14 days after the vendors obtain the consent of the landlord to the assignment of the lease whichever is the later.”
15. O’Rourke Reid responded on the 13th September, saying that the plaintiff wished to hold off executing contracts until the final version of the lease for Richview was agreed. They also requested certain outstanding information about the defendant that was required in order to obtain the landlord’s consent to the assignment of No. 54. On 6th October, 2006, a letter from O’Rourke Reid stated that the execution of the lease for Richview would be dependent on the assignment of No. 54.
16. It is clear from the further correspondence that most of the attention of the solicitors became focused on the negotiations over the lease for Richview, which dealt with a number of complex issues and took longer than anticipated. On the 7th January, 2007, O’Rourke Reid sent a final list of queries about Richview and said:
“On final confirmation of the above points, my client is in a position to execute the lease immediately. Execution of the lease will be dependent on the assignment of the existing leasehold interest at No. 54 Northumberland Road to your client - I note that your client has executed contracts in this regard. I will follow up with Arthur Cox as I have not yet received the draft licence to assign - I note they are satisfied with your client from a financial and reference point of view.”
17. The lease for Richview was signed on the 6th July, 2007, and the plaintiff entered into occupation. However, correspondence continued between the solicitors in relation to various issues about these premises. The documentation was not finally complete until December, 2007.
18. Meanwhile, on 21st August, 2007, Smith Foy wrote to O’Rourke Reid stating that the defendant was terminating all negotiations regarding the proposed acquisition of the leasehold interest in No. 54, and returning all documentation in this regard to O’Rourke Reid.
19. O’Rourke Reid did not respond to that letter until the 23rd October, 2007. They then stated their position as being that the arrangement between the parties involved two deals - one being the taking of the lease of Richview by the plaintiff and the other being the acquisition by the defendant of No. 54. Smith Foy did not reply.
20. On 14th December, 2007, the landlord of No. 54 consented to the assignment of the lease of No. 54 to the defendant. On the 17th December, 2007, O’Rourke Reid wrote to the defendant’s solicitors enclosing a copy of the consent and the licence to assign. It was stated that the defendant had signed a contract on the 6th September, 2006, and was bound by it. He was now called upon to complete within 14 days.
21. In reply, Smith Foy stated that there had never been a contract in relation to No. 54. Further correspondence produced no change in this position. On the 11th January, 2008, the plaintiff served a completion notice which cited the 6th September, 2006, as the date of the contract between the parties.
22. The plaintiff initiated proceedings by way of plenary summons on the 7th May, 2008.
The High Court proceedings
23. The plenary summons sought an order for specific performance of what was claimed to be an agreement in writing dated the 6th September, 2006, whereby the defendant agreed to purchase the plaintiff’s title and interest in No. 54. There was also a claim for damages for all losses and expenses incurred by the plaintiff by reason of the defendant’s failure to honour the terms of the agreement.
24. It was pleaded in the statement of claim that an agreement had been entered into between the parties in May, 2006 that, in consideration of the defendant agreeing to purchase by way of assignment the plaintiff’s leasehold interest in No. 54, the plaintiff had agreed to enter into a lease of the defendant’s premises at Richview. It was further pleaded that the defendant had duly executed the agreement to take the plaintiff’s interest for the sum of €1 on the 6th September, 2006, and that in further pursuance of the same agreement the plaintiff had duly entered into the lease of Richview. However, the defendant had failed, refused or neglected to complete the purchase of the plaintiff’s leasehold interest. It was pleaded that the plaintiff was at all material times ready, willing and able to complete the sale and assignment of its interest. As a result of the failure of the defendant to honour the agreement the plaintiff had suffered loss, damage and expense. Specifically, expense was occasioned in respect of rent, rates and other costs associated with No. 54.
25. The defence denied the existence of the alleged or any contract. Specific reliance was placed on the fact that all correspondence had been headed “Subject to Contract/Contract Denied” or “Subject to Lease & Agreement/Lease & Agreement Denied”. It was also pleaded that any alleged agreement was unenforceable in the absence of a completed memorandum as required under the Statute of Frauds. The defence of laches was also raised. All facts pleaded in the statement of claim were denied.
26. In reply to a notice for particulars the plaintiff said that discussions between the parties and their agents on various dates in May, 2006 had resulted in agreement, which was acknowledged by the letter of the 31st May, 2006, referred to above at paragraph 7, and was further reduced to writing in the Law Society General Conditions of Sale document dated the 6th September, 2006. It was asserted that the latter document constituted a sufficient Memorandum for the purposes of the Statute of Frauds.
27. In reply to the defence the plaintiff pleaded inter alia that the defendant was estopped by virtue of his conduct and actions from denying the existence of an enforceable contract.
28. It appears that certain other issues, not referred to in the correspondence or pleadings, arose as a result of the oral evidence in the trial of the action. These related to the existence of the break clause in the plaintiff’s lease of No. 54 and the deed of renunciation. The parties confirmed that they had understood that the plaintiff was to take a lease from the defendant, and the defendant was to take No. 54, but the defendant’s evidence was that this agreement was always subject to the exercise of the break clause. He said that it was his “first priority”, because he was anxious to acquire the freehold of No. 54 and believed that if the break option had been exercised his position vis-a-vis the landlord would have been improved. He acknowledged that he had not so instructed either the estate agent or his solicitor.
The High Court judgment
29. In submissions, it was argued on behalf of the defendant that the plaintiff was seeking specific performance of a contract alleged to have been entered into on the 6th September, 2006, and not an agreement alleged to have come into existence before, and evidenced by, the letter of the 31st May, 2006. Laffoy J. did not agree with that interpretation of the pleadings, holding that the statement of claim read in conjunction with the replies to particulars clearly pointed to an agreement prior to that date. The key finding of the learned trial judge was that prior to the letter of the 31st May, 2006, there was a single agreement in principle between the plaintiff and the defendant that the plaintiff would take, and the defendant would grant, a lease of Richview and that, in consideration of the plaintiff taking that lease, the defendant would take over the plaintiff’s existing lease of No. 54. While the Richview lease was of necessity going to be a complex document, there was mutuality between the parties on the core agreement that the obligation of each party was contingent on the other party taking the relevant property interest.
30. This finding was not based simply on a preference for the evidence of the plaintiff’s witnesses, which was to the effect that all parties were aware that the plaintiff needed to unburden itself of the No. 54 lease if it was to take on Richview, and that the plaintiff never understood the two aspects of the deal to have become separated. The trial judge also had regard to the evidence of the defendant himself as to his understanding of the position. He had confirmed that there was a “package”, whereby the plaintiff was to take a lease of Richview and he was to take No. 54 off the plaintiff’s hands. He agreed with the proposition that in principle these were the terms, although he said that the agreement was subject to the exercise by the plaintiff of the break clause in the lease of No. 54. His evidence on this latter point was not accepted by the trial judge, who noted that this issue had never been referred to in either the correspondence or the pleadings. The trial judge found as a fact that the defendant was aware of and accepted the nature of the leasehold interest created by the 2003 lease. He was therefore aware of both the break clause and the deed of renunciation. Again, this finding was based on his own evidence.
31. Referring specifically to the letter of the 31st May, 2006, from Smith Foy, Laffoy J. said that she found the reference to “this aspect of the transaction” to be of particular significance as demonstrating the defendant’s solicitors’ perception of the position in relation to No. 54. The principals had, at all times between the 31st May, 2006, and the lease of Richview in July, 2007, considered that it was a condition of the plaintiff taking that lease that the defendant would take over the plaintiff’s interest in No. 54. The trial judge thus found that it was clear that the two transactions were intrinsically linked.
32. However, she stressed that her finding was that there had been an agreement in principle, stating that it was “unquestionably” the case that there was no concluded agreement before July, 2007. The true position, she considered, was that the defendant was anxious to procure the plaintiff as a tenant on terms that were suitable to him, and knew that to achieve that objective he would have to take over No. 54.
33. The trial judge went on to find that the plaintiff fulfilled its part of the bargain that had been agreed in principle, by taking the Richview lease on the 6th July, 2007, and by subsequently indicating readiness to complete the No. 54 assignment. At that point, in her view, the agreement in principle became a concluded contract.
34. Having found that there was an agreement in principle in May, 2006, and a concluded agreement that came into being with the finalisation of the Richview lease in July, 2007, the trial judge acknowledged that there was no note or memorandum to satisfy the Statute of Frauds. She referred to the decision of this Court in Boyle v. Lee [1992] I.R. 555 in this regard.
35. In Boyle v Lee the plaintiffs asserted that they had an enforceable oral contract to purchase a property for the sum of £IR 90,000. They were prepared to waive potential issues relating to planning permission and tenancies, and to pay a deposit. However the auctioneer refused to accept a deposit, taking the view that it was a matter for the solicitors when the formal contract was being drawn up. Relevant documentation drawn up on behalf of the vendor contained the phrase “subject to contract” and other similar expressions.
36. Holding that there was not a complete contract in the circumstances, Finlay C.J. said that, having regard to the total amount of money involved in the sale, the amount of the deposit was too important an issue to be omitted from a concluded agreement. In what Laffoy J. described as an effort by this Court to bring certainty to the question of what is or is not a sufficient note or memorandum for the purposes of the Statute of Frauds, Finlay C.J. said:
“In my view, the very definite statement that a note or memorandum of a contract made orally is not sufficient to satisfy the Statute of Frauds unless it directly or by very necessary implication recognises, not only the terms to be enforced, but also the existence of a concluded contract between the parties, and the corresponding principle that no such note or memorandum which contains any term or expression such as ‘subject to contract’ can be sufficient, even if it can be established by oral evidence that such a term or expression did not form part of the originally orally concluded agreement, achieves that certainty.”
37. Accordingly, Laffoy J. found that neither the letter of the 31st May, 2006, nor the contract signed by the defendant on the 6th September, 2006, relied upon by the plaintiff, was sufficient. The letter indicated that the defendant would have a contractual liability if agreement was reached on the lease of Richmond. The contract of September, 2006 was sent under cover of a letter headed “subject to contract/contract denied”. The letter sent in reply was also headed “subject to contract/contract denied” and made it clear that the contract would not be executed until such time as the final version of the lease in respect of Richview had been agreed.
38. The agreement was therefore unenforceable unless the plaintiff could rely on part performance or some other equitable principle. Laffoy J. considered, in the light of the decision of this Court in Mackie v. Wilde (No. 2) [1998] 2 I.R. 578, that the plaintiff was entitled to rely on the doctrine of part performance. She quoted the following passage from the judgment of Simon L.J. in Steadman v Steadman [1976] A.C. 536, approved in Mackie v Wilde :
“…almost from the moment of passing of the Statute of Frauds, it was appreciated that it was being used for a variant of unconscionable dealing, which the Statute itself was designed to remedy. A party to an oral contract for the disposition of an interest in land could, despite performance of the reciprocal terms by the other party, by virtue of the statute disclaim liability for his own performance on the ground that the contract had not been in writing. Common law was helpless. But Equity, with its purpose of vindicating good faith and with its remedies of injunction and specific performance, could deal with the situation. The Statute of Frauds did not make such contracts void but merely unenforceable; and, if the statute was to be relied upon as a defence, it had to be specifically pleaded. Where, therefore, a party to a contract unenforceable under the Statute of Frauds stood by while the other party acted to his detriment in performance of his own contractual obligations, the first party would be precluded by the Court of Chancery from claiming exoneration, on the ground that the contract was unenforceable, from performance of his reciprocal obligations; and the court would, if required, decree specific performance of the contract. Equity would not, as it was put, allow the Statute of Frauds ‘to be used as an engine of fraud’. This became known as the doctrine of part performance - the ‘part’ performance being that of the party who had, to the knowledge of the other party, acted to his detriment in carrying out irremediably his own obligations (or some significant part of them) under the otherwise unenforceable contract.”
39. Laffoy J. found that the essential elements identified by Barron J. in Mackie v Wilde were present - that is, there was a concluded contract; the plaintiff had performed its contractual obligation; the defendant had not merely induced and acquiesced in but had actively participated in the plaintiff’s performance by granting the Richview lease; and it would be unconscionable and a breach of good faith to allow the defendant to rely upon the terms of the Statute to avoid having to fulfil what remained of his contractual liability.
40. Having regard to Holohan v Ardmoyle Estates (unrep., Supreme Court, 1st May 1967), and further having regard to the plea in the statement of claim that the plaintiff had fully performed its obligation under the contract, the trial judge considered that the lack of an explicit reference to the doctrine in the statement of claim did not preclude the plaintiff from relying upon it.
41. In Holohan, the trial judge had awarded damages in lieu of specific performance. The defendant contended in the appeal that the plaintiffs were not entitled to have the payment of a deposit taken into account because it had not been pleaded. Walsh J said (at pp 4 - 5):
“It was also submitted on behalf of the defendants that the statement of claim should have pleaded that some part of the purchase money had been paid. It is quite true that in former years when pleadings gave considerably more information than they now give it was customary to plead all the relevant facts, such as the making of the contract, the payment of the deposit, the ability and willingness of the plaintiff to complete and the refusal or failure of the defendant to complete. A great deal of information is now left to be sought by means of notice for particulars. In the present case no notice for particulars was served by the defendants and, of course, the defendants were well aware that part of the purchase money had been paid as the defendants had received it.”
42. While basing her decision on the doctrine of part performance, Laffoy J. also indicated that if necessary she would have found in favour of the plaintiff on the basis that the defendant would be estopped from refusing to fulfil the clear and unambiguous assurance he gave to the plaintiff, which was clearly intended to affect legal relations between them and to be acted upon, that he would acquire the plaintiff’s leasehold interest. The plaintiff had acted upon that assurance, to its detriment, in taking the Richview lease.
43. Laffoy J. also found that the delay on the part of the plaintiff in obtaining consent from the landlord of No. 54 for the assignment of the leasehold interest to the defendant was not, on the facts of the case, of such an order as to preclude the plaintiff from entitlement to equitable relief.
Submissions in the appeal
44. The principal submission made on behalf of the defendant is that the trial judge failed to have sufficient regard to the pleadings in the case. The plaintiff had claimed entitlement to specific performance of an agreement alleged to have been entered into on the 6th September, 2006, while the trial judge held that a concluded agreement did not exist until the 6th July, 2007. The pleadings did not refer to the doctrine of part performance. It is therefore argued that the basis of the case pleaded by the plaintiff and that upon which the trial judge made her decision, on the grounds of part performance, are different. The authority of Holohan is said to be of no relevance in the circumstances, while reference is made to the decision of this Court in McGee v O’Reilly [1996] 2 I.R. 229.
45. McGee v O’Reilly was concerned with the adequacy of replies to a notice for particulars in a medical negligence case. In dismissing the appeal, Keane J. referred to the law relating to the purpose of pleadings as having been “conveniently and compendiously stated” in the following passage and cited therein from Mahon v Celbridge Spinning Co. Ltd. [1967] I.R. 1 in relation to the purpose of pleadings:
“The whole purpose of a pleading, be it a statement of claim, defence or reply, is to define the issues between the parties, to confine the evidence at the trial to the matters relevant to those issues, and to ensure that the trial may proceed to judgment without either party being taken at a disadvantage by the introduction of matters not fairly to be ascertained from the pleadings. In other words a party should know in advance, in broad outline, the case he will have to meet at the trial.”
46. However Keane J. had concluded:
“In our system of civil litigation, the case is ultimately decided having regard to the oral evidence adduced at the trial. The machinery of pleadings and particulars, while of critical importance in ensuring that the parties know the case that is being advanced against them and that matters extraneous to the issues as thus defined will not be introduced at the trial, is not a substitute for the oral evidence of witnesses and their cross-examination before the trial judge.”
47. It is submitted by the defendant that, at its highest, there was an agreement in principle between the parties, but that no concluded agreement ever existed in relation to No. 54. The oral agreement between the parties was subject to the input of the solicitors, and the approach taken by the latter, on both sides, was to separate the matter into two separate dealings both of which were subject to contract. That having occurred, the two transactions were no longer dependent on each other. While it would have been possible to deal with them in one contract, or in some other fashion that would have maintained a linkage, that was not the method adopted. Counsel refers to Boyle v Lee in support of the argument he makes that the oral agreement, such as it was, came to an end as a result of the solicitors’ approach and was superseded by that development. In these circumstances, it is said, the doctrine of part performance had no role, on the basis that it is applicable only to a concluded contract.
48. The contract entered into on the 6th July, 2007, is described as a separate contract in relation to Richview, which had no bearing upon any dealings regarding No. 54 and could not alter or affect the situation in relation to No. 54. Counsel argues that the contract signed by the defendant on the 6th September, 2006, with the amendments of the plaintiff’s solicitors’ draft, constituted a counter-offer that was never accepted.
49. The defendant also relies upon the delay of the plaintiff in obtaining its landlord’s consent to the assignment of the leasehold interest in No. 54. It had not been obtained as of the 6th July, 2007, and had not, therefore, occurred within a reasonable time. Negotiations had been ongoing for almost fifteen months when the defendant’s solicitors wrote in August, 2007 terminating negotiations in relation to No. 54.
50. The defendant submits that the principles set out in Hay v. O’Grady as to the approach of an appellate court to findings of the trial judge do not necessarily apply with full force in this case, given that the Court must consider written documents such as the lengthy correspondence. It is argued that this Court is, at very least, in as good a position to consider the matter as the original Court that heard the case.
51. The plaintiff fully accepts the reasoning of Laffoy J. and stands over it, now agreeing that there was no contract that could have been enforced until the occurrence of an event that crystallised it. There is no cross-appeal in relation to either the finding that there was no concluded contract as of the 6th September, 2006, or the finding that the correspondence could not be treated as a note or memorandum for the purpose of the Statute of Frauds.
Discussion and conclusions
52. The role of an appellate court in considering the decision of the trial judge is clearly set out in the decision of this Court in Hay v O’Grady [1992] 1 I.R. 210. If the findings of fact made by the trial judge are supported by credible evidence, this Court is bound by those findings. This is particularly important where the trial judge has heard oral evidence. As McCarthy J. said:
“ An appellate court does not enjoy the opportunity of seeing and hearing the witnesses as does the trial judge who hears the substance of the evidence but, also, observes the manner in which it is given and the demeanour of those giving it. The arid pages of a transcript seldom reflect the atmosphere of a trial.”
53. McCarthy J. then went on to deal with the question of inferences as follows:
“Inferences of fact are drawn in most trials; it is said that an appellate court is in as good a position as the trial judge to draw inferences of fact. (See the judgment of Holmes L.J. in ‘Gairloch’, The S.S., Aberdeen Glenline Steamship Co. v. Macken [1899] 2 I.R. 1, cited by O’Higgins C.J. in The People (Director of Public Prosecutions) v. Madden [1977] I.R. 336 at p. 339). I do not accept that this is always necessarily so. It may be that the demeanour of a witness in giving evidence will, itself, lead to an appropriate inference which an appellate court would not draw. In my judgment, an appellate court should be slow to substitute its own inference of fact where such depends upon oral evidence or recollection of fact and a different inference has been drawn by the trial judge. In the drawing of inferences from circumstantial evidence, an appellate tribunal is in as good a position as the trial judge.”
54. There is in my view no basis for considering that the principles of Hay v. O’Grady do not apply in the normal way to a case such as this. It is clear that the central findings in the judgment of Laffoy J. were based on the relationship between the oral evidence and the correspondence. In particular, she had regard to the fact that at all times the parties (as confirmed by the defendant in his evidence) and the solicitors (as demonstrated by the letter of the 31st May, 2006) understood that what was envisaged was, to use the defendant’s word, a “package”, with mutual obligations in respect of the two properties. The plaintiff entered into the Richview lease on the basis of that agreement. There is no reason to hold that these conclusions of the trial judge in relation to the evidence are not binding on this Court.
55. That being the case, the Court must approach the matter on the basis that there was an agreement in principle between the parties, creating mutual obligations in respect of the two properties, that the plaintiff acted upon it to its detriment by entering into the lease in circumstances where the defendant was fully aware of his own corresponding obligations in respect of No. 54, and that the plaintiff was able and willing to complete the transaction in respect of that property. I do not consider that Boyle v Lee is of assistance to the defendant, beyond the application by the trial judge (in favour of the defendant) of the core principle of that authority to the effect that the “subject to contract” documents in the case did not evidence a concluded contract. The defendant has argued that, whatever the original intention of the parties, the procedures adopted by the solicitors in fact separated the matter into two separate dealings. On the evidence, this does not appear to be correct. The letter of the 31st May, 2006, demonstrates that the defendant’s solicitors understood that there were two aspects to one transaction and there is nothing thereafter to indicate an agreement to separate them. The repeated references by the plaintiff’s solicitors to the fact that the plaintiff would not be in a position to assign the lease of No. 54 until its move into Richview was finalised run counter to the suggestion of such an agreement. By the same token, the defendant’s solicitor did not take issue with any delay in relation to No. 54.
56. In the circumstances I do not accept the argument that the methods adopted by the solicitors had the effect of separating the two transactions into independent contracts. The situation here is not as it was in Boyle v Lee where certain central aspects were expressly left to be negotiated by the solicitors - in the instant case, there is nothing to suggest that either the principals or the solicitors intended to undo the core mutual aspect of what was agreed by the defendant to have been “a package”.
57. The trial judge was therefore entitled to find that the facts of the case gave rise to the application of the doctrine of part-performance. Her conclusions in relation to the operation of that doctrine are a straightforward application of the principles in Mackie v Wilde. It is correct to point out that the pleadings did not put the matter clearly in these terms but in my view the trial judge was fully entitled to find that it was covered by the statement of claim and the replies to particulars. The judgments in Holohan v Ardmoyle Estates, Mahon v Celbridge Spinning Co. Ltd and McGee v O’Reilly do not support the proposition that the formulation of pleadings necessarily outweighs the significance of oral evidence where witnesses are all agreed on the salient issues.
58. In the circumstances, the defendant has not demonstrated that the trial judge fell into error in relation to either the facts or the law. I would therefore dismiss the appeal.
