The High Court has dismissed a claim by solicitor John Shiel to part of a property at Carrowhubbock, Enniscrone, despite finding that he and Peter McKeon had reached an informal arrangement over its purchase.
Both men wanted the property, which comprised a house, garden and rear land running towards the sea. McKeon owned adjoining lands and had planning permission for a substantial development, while Shiel owned a holiday home across the road.
By early August 2005, McKeon had agreed in principle to buy the property for €435,000, subject to contract. Shiel had separately bid through an intermediary and later offered €450,000. He was told that he would need to offer €500,000 by the close of business on August 12 if he wanted to prevent a sale to McKeon, but he did not do so.
Two days later, on August 14, the men met. Clarke J. found that they reached an informal understanding under which McKeon would acquire the entire property, retain the rear portion and hold the house and garden for Shiel, who would contribute €275,000 plus an appropriate share of expenses. Related boundary, sewer and transfer arrangements were discussed.
The judge found that McKeon conducted himself in a way that reasonably led Shiel to believe the arrangement existed and that Shiel consequently refrained from trying again to purchase the property directly.
Ordinarily, that could support what the court described as a Pallant v Morgan equity: an equitable remedy preventing one prospective purchaser from retaining a benefit obtained after another has stepped aside in reliance on an arrangement.
However, Shiel had not told McKeon that his own negotiating position had weakened substantially because he had missed the €500,000 deadline. Clarke J. held that a party seeking equitable relief must himself act equitably.
Because that imbalance had been concealed, the court refused to enforce the informal arrangement and dismissed Shiel’s claim.