The Supreme Court allowed Mary O’Connor’s appeal in a dispute over a land sale conditional on the purchaser obtaining planning permission within four months. It held that her letter of 12 September 2002 validly rescinded the contract, but did not decide whether the contract ended automatically when the deadline passed.
Under a written contract dated 31 May 2001, O’Connor agreed to sell lands in Folio 35939F in County Meath to Patrick Coady for £450,000. The contract required Coady to obtain final planning permission, after any appeals, within four months. The closing date was set for seven days after permission was granted.
Coady had applied for permission before the contract was signed, in an application covering the sale lands and adjoining lands he owned. Permission was not issued within the four-month period, which ended on 30 September 2001. The judgment said the contract did not expressly make time of the essence for meeting that planning condition.
In September 2002, Coady’s solicitor told O’Connor’s solicitor that permission had issued in June and an appeal was pending. The letter asked for replies to title requisitions and approval of a draft transfer deed. O’Connor’s solicitor replied that the contract had lapsed, offered to negotiate a new sale, and purported to return the deposit. The letter was headed “Subject to Contract/ Contract Denied”. Planning permission was ultimately granted by An Bord Pleanála on 4 October 2002.
The High Court had found that O’Connor could not treat the contract as ended merely because the planning deadline had passed. It said she first had to serve a completion notice under the standard sale conditions and allow the notice period to expire without completion.
The Supreme Court rejected that reasoning. It held that the completion notice clause concerned completion after a closing date and could not apply before planning permission had been granted. Applying principles for conditional contracts, it said the four-month deadline had to be strictly observed and could not be extended on equitable grounds.
The Court proceeded on the assumption that the contract became voidable when the deadline passed; it expressly did not decide whether it instead became void automatically. It found the September 2002 letter clearly notified Coady that O’Connor was treating the contract as at an end. It also found no waiver by Coady of the planning condition and no conduct by O’Connor that would have encouraged him to believe she would not enforce the deadline.
The Court answered that O’Connor was entitled to rescind and had validly done so by the letter. It said whether she could regard the contract as ended immediately on expiry of the deadline had not been argued, and the question of whether separate notice was required did not arise given its finding that the letter was effective.