The Court of Appeal has replaced a €171,151 interest award in a failed property sale dispute with an order to assess the actual interest accrued on the vendors’ relevant AIB borrowing. It allowed Denis Kenny’s appeal in part but upheld the €76,000 resale shortfall award.
The appeal concerned the sale of Block 20A, Beckett Way, Park West Business Park, Dublin 12. Des Donegan, Alan O’Connell and James Doran agreed to sell the property for €1.45 million under a contract dated 20 May 2016. Kenny signed the contract, which named Barry Cogan as purchaser, but did not complete. The vendors later sold the property to Trinitymount Limited for €1.3 million. They retained Kenny’s €74,000 deposit.
The High Court awarded the vendors €76,000 for the net resale shortfall, plus €1,719.87 in interest on that sum. It also awarded €171,151.40, calculated at the contract’s 10% interest rate on the unpaid purchase balance for 454 days. Kenny appealed, including on the grounds that the resale loss had not been mitigated and that the interest calculation overstated the vendors’ loss.
The Court of Appeal found that the resale agreement was made on 30 August 2017 and the sale completed on 13 September 2017, within one year of the extended closing deadline. Under General Condition 41(a), the vendors could recover the resale deficiency after credit for the forfeited deposit. The court also upheld the trial judge’s finding that the vendors had taken reasonable steps to mitigate the resale loss. It said Kenny had not provided expert valuation evidence or challenged the evidence about the efforts to find a buyer at the original price.
But the appeal court ruled that the 10% rate in General Condition 25(a) applied to a late completion by the purchaser, not a sale that failed to complete and was later resold. General Condition 41(a) governed the failure to complete and did not provide for interest at the contract rate. The court said damages should reflect the vendors’ actual loss, which could include interest AIB charged on their borrowing during the 454 days between the original due date and the resale completion.
The court vacated the €171,151.40 award and directed the vendors to provide a sworn, supported account of the relevant borrowing interest for that period. Kenny is to be asked to agree the resulting net figure; if it cannot be agreed, the matter may return to court. The court affirmed the €76,000 shortfall and €1,719.87 interest awards. It postponed decisions on costs pending further argument.