The High Court has refused to read a property-sale condition into a settlement between Seamus and Marlyn McKenna and Ennis Property Finance DAC, ruling that the written agreement did not include that requirement.
The proceedings settled on 14 June 2018 on terms providing for payment of €675,000 by the defendants to the plaintiff by the end of July 2018. On payment, the Circuit Court order was to be vacated, the proceedings struck out without an order as to costs, and the plaintiff was to release its security. If payment was not made, the plaintiffs were to withdraw their appeal. The matter was adjourned for mention on 31 July 2018, with liberty to apply.
The McKennas asked the court to treat a sale of the secured property by Ennis Property, acting as mortgagee in possession, as a necessary step before payment. Their counsel said the settlement depended on a mutual understanding that the property would first be sold to raise the money. The McKennas also argued that Ennis Property’s knowledge of their financial affairs meant it would have understood that sale was necessary.
Ennis Property disputed that account. In an affidavit, its solicitor said there had been no reference during negotiations to a sale or its mechanics, and that the defendants had not said payment depended on Ennis Property selling the property. He said the defendants had not explained how they intended to fund the payment, which he regarded as their own matter.
Mr Justice Max Barrett considered the principles for implying a contractual term to give an agreement business efficacy, including authorities cited by counsel. He concluded that neither the settlement text nor the other evidence showed that both sides intended a sale by Ennis Property to be a condition. He also said the proposed sale to a family member at a discount, followed by borrowing after release of the security, did not fit the agreement’s stated sequence or make commercial sense in light of potential liability to lower-ranking mortgagees.
The court held that the settlement was complete on its face and did not include the sale condition the McKennas sought to add. The judgment addressed that request to imply a term; it did not itself record whether the settlement payment was made or determine any later enforcement step.