The High Court has awarded two vendors €1.4 million in damages after a property developer failed to complete a €2.9 million purchase of lands at Foulkscourt, Co Kilkenny.
John Moloney and Patrick Meade agreed in September 2006 to sell the lands to Tadhg Fox by way of a sub-sale. They themselves were buying the property from Margaret Fitzpatrick under an earlier contract for €2 million. Fox's contract was unconditional and specified a closing date of 1 February 2007.
Fox did not complete. A formal completion notice served on 26 February gave him a further 28 days, but the sale still did not close. In evidence, Fox accepted that the transaction failed because finance was not forthcoming from Anglo Irish Bank as the property market weakened and planning permission had not been obtained.
Mr Justice Kevin Feeney rejected Fox's arguments that defects or uncertainty in the underlying contract with Fitzpatrick prevented enforcement against him. The judge found that Fitzpatrick was ready and willing to complete the head sale if paid, and that Moloney and Meade therefore had sufficient rights in the property to complete their bargain with Fox.
The court also preferred solicitor Neil Corbett's evidence that Fox knew the head contract had been renegotiated to include an additional €450,000 non-refundable deposit. That increased payment allowed the plaintiffs to keep the head contract alive and proceed with the proposed sub-sale.
The judge held that Fox's failure to complete amounted to a fundamental breach. Moloney and Meade later lost the entire €500,000 deposit when Fitzpatrick rescinded the head contract.
The court found that this loss was reasonably foreseeable to Fox. It also awarded €900,000 for the profit the plaintiffs would have made from the difference between their €2 million acquisition price and Fox's €2.9 million purchase price.
The sub-contract was rescinded, Fox's counterclaim was dismissed, and interest was to run from 10 March 2009, with its amount to be addressed separately.