The Supreme Court has dismissed a Donegal farmer’s appeal seeking to compel a property developer to complete the purchase of a final lot of land, while ruling that the developer remained a party to the original contract.
John Gibbons agreed in December 2006 to sell three lots at Woodlands, near Letterkenny, to Daniel Doherty, who signed the contract “in trust”. The total price was €4 million. ADT Investments Limited, formed after the contract was signed, bought the first two lots for €3 million. The company could not fund the purchase of the third lot, due by March 2009.
The High Court ordered specific performance against ADT alone. The Court of Appeal upheld that decision. Gibbons appealed to the Supreme Court, seeking specific performance against Doherty personally.
In a judgment dated 11 December 2020, Mr Justice John MacMenamin rejected the Court of Appeal’s interpretation of General Condition 30. That condition made a person who signed “in trust” or as an agent personally liable until the principal’s name was disclosed. The Court held that the condition did not allow Doherty to nominate a company that did not exist when he signed the contract and thereby shed his liability. Doherty remained a party to the contract.
However, the Court said Gibbons had accepted ADT as purchaser in the place of Doherty when the company was named in the transfer deeds for the first two lots and paid for them. Gibbons and his solicitors raised no objection at the time. The judgment said their subsequent conduct treated ADT as the principal and led Doherty to understand that he had no continuing obligations.
The Court applied, by analogy, the principle of estoppel by convention in exercising its equitable discretion over specific performance. It concluded that Gibbons was barred by his conduct from obtaining that remedy against Doherty. The Court upheld the Court of Appeal’s order, but for different reasons, and dismissed the appeal.
The judgment noted that Gibbons had received €3 million for the first two lots and retained the third lot. It said he had succeeded on the appeal’s first issue, concerning the interpretation of Condition 30, but that this did not entitle him to specific performance against Doherty. The judgment noted that this might have a bearing on costs; it did not determine costs in the concluding order quoted in the source.