By Niamh Ellis
The High Court has ruled that Cootehill landowner Thomas Lynch may forfeit a €400,000 deposit and resell property after two purchasers failed to comply with their obligations to pursue planning permission promptly.
Lynch agreed in April 2007 to sell Desmond Duffy and Pauric Duffy two lots at Lisnasaran, Cootehill, County Cavan, including lands in two registered folios and a leasehold interest in part of the former Cootehill Workhouse. The agreed price was €4 million.
The contract was conditional on planning permission for private residential development. It required the purchasers to use all reasonable endeavours to secure permission as soon as possible. It also allowed either side to terminate after October 31st, 2007 if permission had not issued.
An initial planning application was lodged in summer 2007, but the accompanying cheque was not honoured and the application was returned. A fresh application was not made until October 24th, one week before the contractual deadline.
Two days later, the purchasers' solicitors told Lynch that planning permission was not expected by October 31st and sought return of the deposit. They later said the buyers had spent about €190,000 preparing the application and alleged that Lynch had frustrated the original planning process by refusing arrangements concerning an entrance and sight line. Lynch disputed responsibility for the delay.
Mr Justice Roderick Murphy found that the effective planning application had been made more than five months after the contract became binding. He held that lodging it only a week before the deadline was too late to satisfy the obligation to use all reasonable endeavours to obtain permission promptly.
The judge also found that the purchasers' October and November letters did not validly exercise the contractual right to terminate. Because the buyers themselves were in breach of the planning condition, they were precluded from relying on that termination provision.
The court therefore ruled that Lynch could invoke the contract's general conditions, retain the €400,000 deposit and resell the property.