The Supreme Court has allowed Derek Stewart’s appeal in two Dublin property sale disputes, setting aside High Court orders that had awarded damages to purchasers after refusing to compel the sales to proceed.
The conjoined cases concerned contracts for the sale of 14 Rutland Street to P.J. McGrath and 9 Summerhill Place to McGrath and Thomas McGrath. Both contracts were dated 8 June 1998 and priced at IR£25,000. The purchasers sought specific performance, saying they were entitled to vacant possession. Stewart’s defence included a claim that the actions were statute-barred and that the contracts were subject to existing tenancies.
The High Court found that the purchasers had contracted for vacant possession, but refused specific performance because their delay in bringing proceedings made that remedy inequitable. It then awarded damages in lieu. The Supreme Court appeal was heard on that damages issue; the purchasers had not cross-appealed the finding of laches.
In a judgment delivered on 29 July 2016, Ms Justice Laffoy concluded that a court could not award damages in lieu of specific performance where it had refused specific performance because the purchasers were guilty of laches. She distinguished that situation from one where delay did not establish laches but the court chose damages instead of specific performance.
The purchasers argued on appeal that they could receive damages for breach of contract. The Supreme Court rejected that argument because such a claim had not been pleaded or considered at trial, and the High Court had assessed damages on the basis that they were in lieu of specific performance. The court said a breach-of-contract damages claim could not be introduced for the first time on appeal.
The court therefore allowed Stewart’s appeal and vacated the High Court orders awarding and quantifying damages in both actions. It did not decide the other grounds challenging the trial judge’s findings, including arguments about whether there had been an agreement, because those issues were not appropriate to consider on the appeal.
The judgment also observed that the purchasers appeared entitled to repayment of deposits totalling IR£5,000, if they had not already been repaid. The Supreme Court took no further action on the deposits.