The Supreme Court dismissed an appeal by four purchasers and upheld an order requiring them to complete the purchase of 22 units at Castlemanor Retirement Village in County Cavan. The contracts require payments totalling €5.94 million: €1.804 million to the estate of Desmond Murtagh and €4.136 million to Desmond Murtagh Construction Ltd., which is in receivership.
The dispute concerned a 300mm foul sewer required by Condition 33 of the development’s 2005 planning permission. It had not been built by the time of the High Court hearing. The purchasers argued that this made the architect’s planning compliance certificate invalid and entitled them to rescind the contracts. They also argued that the units could not lawfully be occupied and that specific performance would force them to accept an unlawful development.
The Supreme Court held that the purchasers had agreed to a specific form of architect’s certificate under the contracts’ special conditions. Once the vendors provided a signed certificate in that agreed format, their contractual obligations concerning planning compliance were satisfied. The court said the general condition on planning warranties and documents was displaced in the relevant respects by the special conditions. It also held that the rules concerning restrictive conditions on investigation of title did not apply because planning compliance was not a matter of title.
The court found the certificate substantially accurate. The High Court had found that Murtagh was willing to install the sewer, but Cavan County Council wanted it coordinated with a planned trunk water main and had deferred approval while seeking funding. The Supreme Court accepted that evidence and found that the sewer’s absence did not make the certificate misleading at the relevant time. It also rejected the purchasers’ argument about Condition 14, which barred occupation until new sanitary facilities were constructed and tested. The court accepted that this referred to facilities within each unit, which had been connected to and tested on the public sewer.
The Supreme Court did not need to decide the separate question of whether the purchasers knew about the sewer’s absence, a matter on which the High Court had made findings against them.
The specific performance order remains subject to the receiver’s undertaking to make sufficient funds available when the Council calls for the sewer to be installed. The Supreme Court concluded that the outstanding sewer works did not make it unjust to require completion and dismissed the appeal. The judgment was delivered on 31 July 2014.