The High Court has ordered Drocarne Limited and Seamus Murphy Properties and Developments Limited to perform their development agreement for lands at Tullyallen, County Louth, except for two plots already released from the agreement.
In a judgment delivered on 17 April 2008, Ms Justice Finlay Geoghegan held that the Master Development Agreement remained in force. The case concerned the defendant’s claim that the agreement had ended after planning approval was granted for a factory outlet at Ballymascanlon, and its opposition to Drocarne’s request for specific performance.
The agreement, signed in December 2000, set out a process for planning and developing lands over which the defendant then held options. The lands were rezoned in 2004. In January 2005, a proposed development plan that included a factory outlet was deemed approved under the agreement after the defendant did not object within the required 14 days.
An Bord Pleanála upheld planning permission for a factory outlet at Ballymascanlon in February 2005. The court accepted that the approved Tullyallen plan, which also included a factory outlet, could not then obtain planning permission. Drocarne did not submit a planning application by the contractual deadline of 28 April 2005.
The judge found that this did not breach the agreement. The relevant clause required Drocarne to use “all reasonable endeavours” to submit an application. Given that an application for the approved plan would have been futile, the agreement did not require the company to spend resources lodging one. The judge also concluded that the agreement allowed for the plan to be amended in the circumstances, or, alternatively, required the parties to address obstacles through the agreement’s dispute provisions.
The defendant argued that Drocarne had treated the agreement as ended and that the Ballymascanlon decision had frustrated it. The judge found that Drocarne had not accepted that the agreement was at an end. She also held that a factory outlet was not an essential part of the original bargain, which covered an as-yet unspecified development. A revised scheme without that outlet could still meet the parties’ contractual objectives.
The court therefore held that the agreement remained in force, save for the Byrne and Berrill lands, which had been released from it by agreement in 2003 or 2004. As the defendant had made no submission against specific performance if the agreement was found to remain in force, the court ordered specific performance. It did not consider Drocarne’s alternative claim for damages; Drocarne had clarified that it sought no damages if specific performance was granted.