The High Court ruled that BNY Trust Company (Ireland) Limited and Ark Life Assurance Company Limited must serve a sale notice on Treasury Holdings if they wish to proceed with a sale of their interests in Northside Shopping Centre. The court found that the joint-sale notice they had served was invalid because they had already entered put-and-call options with N1 Property Developments Limited and its principals.
The dispute concerned a 1998 co-ownership agreement governing the shopping centre’s beneficial freehold interests. BNY and Ark had agreed to sell their interests to N1. Treasury, which had acquired Peter Conlan’s interest, argued that the agreement required BNY and Ark to follow the individual sale process in clause 3 as well as the joint-sale process in clause 4.
Justice Clarke held that clauses 3 and 4 set out separate, mutually exclusive processes. In principle, owners could use clause 4 to sell jointly without also serving a clause 3 sale notice. But clause 4 required BNY and Ark to be free to offer the property for sale when they notified Conlan of their intention to sell jointly.
Before giving that notice on 20 March 2007, BNY, Ark and Percy Nominees had entered two put-and-call option agreements with N1 and its principals on 14 February. The first concerned the sale of BNY and Ark’s interests for €64,255,500. Clarke found that the options allowed N1 or its principals to insist on the sale, leaving BNY and Ark unable to pursue an open sale. Their clause 4 notice was therefore invalid.
Conlan did not indicate within the 30-day period that he wished to join the proposed sale. Clarke held that this did not cure the invalid notice or prevent Treasury from arguing that clause 4 could not displace the clause 3 obligations. He also concluded that Treasury was entitled to rely on the co-ownership agreement after agreeing to become bound by it in place of Conlan.
The court concluded that BNY and Ark had to either invoke clause 4 before entering binding arrangements or serve a sale notice. Since they had done neither, they must serve a notice on Treasury and comply with clause 3 if they wish to proceed with a sale. The judgment did not make a final declaration: Clarke said he would hear counsel further on the precise form of the declaratory orders.