The High Court has ordered Joseph McNamara to complete a 2007 agreement dissolving his property development partnership with Adrian O’Connor. It also declared the partnership dissolved and held that McNamara must pay interest under the agreement from 30 November 2007.
The judgment, delivered by Mr Justice Brian McGovern on 24 April 2009, concerned an agreement covering three Galway property interests: a 75% beneficial interest in lands at Tuam Road, lands at Barna and premises at 17 William Street West. The agreement assigned the Tuam Road interest to McNamara and the Barna and William Street interests to O’Connor, subject to specified existing charges and responsibilities.
The agreement set a four-week period for arranging finance and completing transfers. McNamara argued that O’Connor’s failure to complete within that period made the agreement void and entitled him to renegotiate. He said release of his Achill property, which he had provided as security for the William Street loan, within four weeks was crucial to obtaining finance. He also sought damages for breach of contract and misrepresentation.
O’Connor said he had not been told that release of the Achill property within four weeks was fundamental. The judge accepted his evidence on that point. The court noted that the defence and counterclaim referred instead to security on a property at Munster Avenue, Galway, and said that reference might have been an error.
The judge held that McNamara had not made time of the essence of the agreement at the outset, and that O’Connor did not know the significance McNamara attached to the Achill property. O’Connor had completed his part outside the four-week period, including releasing McNamara from liabilities to Anglo Irish Bank and paying Econ Developments for William Street construction work. McNamara had transferred his interest in William Street to O’Connor in October 2007. The court described this as part performance by both sides.
The judge said McNamara was not entitled to treat the agreement as void. The judgment records that his failure to complete was due to the property market downturn, and that he had not claimed he was unable to complete.
O’Connor had sent a fax on 26 November 2007 giving McNamara until 30 November to comply. The judge held that this fax appeared to make time of the essence from that point. The order was for specific performance of the agreement and a declaration that the partnership was dissolved under it. The judgment also made McNamara liable for interest under the agreement from 30 November 2007.