The High Court has ordered the return of a €142,500 deposit after finding that a proposed €1.425 million sale of Coosan Cottage near Athlone never became legally binding.
Outeniqua Limited had agreed terms in principle to buy the 14-bedroom guesthouse at Creaghduff from joint owners Tom O’Neill and his former spouse Nollaig Buckley. The company, whose investors have interests in hotels used as International Protection Accommodation Service centres, paid a 10% deposit and signed contracts in July 2023.
The central issue was whether a binding contract arose once both vendors had also signed, or only when a signed counterpart was returned to the purchaser’s solicitor.
Mr Justice Oisín Quinn found that the parties’ correspondence consistently made the transaction “subject to contract” and expressly stated that no agreement would exist until contracts had been signed, the deposit paid and accepted, and contracts exchanged.
Outeniqua withdrew on August 15th, 2023, after concerns arose about whether four bedrooms used as Mr O’Neill’s private residence could be incorporated into the guesthouse for IPAS purposes. Although both vendors had signed by then, no signed contract had yet been returned to Outeniqua’s solicitor.
The court held that Outeniqua’s signed contract and deposit amounted to an offer to purchase. Under the arrangement adopted by the parties, acceptance had to be communicated by returning a contract signed by the vendors. That had not happened before withdrawal.
The judge also rejected arguments that there had been an earlier oral agreement or acts of part performance. He found that pencil markings made by a builder and the gift of an old coal bucket did not amount to legally significant part performance.
Mr Justice Quinn was also critical of parts of Mr O’Neill’s evidence, finding his account that the purchaser later tried to renegotiate while already bound by contract was inconsistent with the documentary record.
Outeniqua was therefore entitled to recover its €142,500 deposit. Mr O’Neill’s claims for specific performance, forfeiture of the deposit and damages were dismissed. Interest and costs were left for further argument.