By Maeve Rowan
The High Court has ordered businessman Gerard Gannon to take over Liberty Asset Management Limited's lease of 54 Northumberland Road, Dublin 4, after finding that the commitment formed part of a linked office relocation deal.
Liberty and Gannon were neighbouring businesses on Northumberland Road in 2006. Both needed larger premises. Gannon owned an unoccupied office development at 8 Richview Office Park, Clonskeagh, while Liberty occupied No. 54 under a lease running from 2003.
Negotiations produced an arrangement under which Liberty would take a 25-year lease of 8 Richview and Gannon would take over Liberty's existing leasehold interest in No. 54. The detailed terms of the Richview lease took more than a year to settle.
Liberty moved into 8 Richview under a lease dated July 6, 2007. The following month, however, Gannon's solicitors wrote saying he was terminating negotiations for the acquisition of No. 54.
Gannon later argued that his willingness to take the Northumberland Road lease depended on Liberty exercising a break clause in its existing lease. That break option had expired in June 2007.
Ms Justice Laffoy rejected that account. She found there had been no agreement requiring Liberty to exercise the break clause and that Gannon had known both about the clause and that it was personal to Liberty before he signed draft contracts concerning No. 54.
The judge held that once the Richview lease was concluded, the earlier agreement in principle became a binding contractual arrangement requiring Gannon to take the Northumberland Road interest.
Although there was no sufficient written memorandum satisfying the Statute of Frauds, the court held that Liberty could rely on the equitable doctrine of part performance. Liberty had performed its side of the bargain by taking the Richview lease, vacating No. 54 and being ready to assign it.
The court ordered specific performance, requiring Gannon to complete the acquisition. Liberty was also awarded damages for costs incurred from January 1, 2008, including rent, rates, insurance, €7,381 in rent-review professional fees and €4,494.60 in maintenance. Some amounts remained to be quantified.