The Supreme Court has dismissed an appeal by four purchasers who refused to complete contracts for units in a development, after finding that the contracts required them to accept a compliance certificate in an agreed form.
The appeal concerned contracts between Desmond Murtagh Construction Limited, Patrick Murtagh, Susan Watters and the personal representatives of Desmond Murtagh, on one side, and Brendan Hannan, Oliver Malone, Sean McGuigan and John Olwell, on the other. Some unit sales had completed. The purchasers declined to complete the remaining sales, alleging that planning permission conditions had not been met and that the contracts should be rescinded.
In a judgment delivered on 31 July 2014, Mr Justice Clarke agreed with Mr Justice McKechnie that special condition 10 required the purchasers to accept an engineer’s certificate of compliance with planning permission and building regulations in the agreed form. The contract stated that no objection, query or requisition about the certificate would be admitted. The court said the certificate, when produced at closing, would conclusively establish compliance between the parties.
The purchasers argued that they were not bound by the condition and could seek rescission, relying on principles concerning conditions that mislead a purchaser or assume facts the vendor knows to be untrue. Mr Justice Clarke said those principles did not determine this case: the condition concerned the position at closing, and a certificate would have to be produced then. The court rejected the purchasers’ grounds for avoiding completion.
The judgment also discussed planning condition 33, which required a meeting with Cavan County Council before development began to agree details of a foul sewer pipeline. The judgment noted that the agreement had not been reached before development commenced; the council had preferred to coordinate the sewer works with a trunk water main, which was delayed for funding reasons. A temporary connection to existing public services was agreed.
Mr Justice Clarke said a planning condition requiring prior agreement could not simply be ignored, and that development begun before the agreement might be unauthorised. But he did not make a final finding on whether the development materially breached the planning permission or whether the certificate was affected. He said those questions were not decisive to the appeal and could affect the interests of a professional who was not a party to the proceedings.
The Supreme Court dismissed the appeal. The judgment agreed with the trial judge that the purchasers were bound by the agreed certificate provision, while expressly leaving the planning compliance issue without a concluded determination.