The High Court has refused to order the sale of two Dublin properties under 1998 contracts, finding that the purchaser waited too long to bring proceedings. It instead awarded damages, with their amount to be calculated by reference to property values at a date adjusted for the delay.
Mr Justice Roderick Murphy delivered the judgment on 11 November 2008 in two linked actions against Derek Stewart. The first concerned 14 Rutland Street; the second concerned 9 Summerhill Place, with P.J. McGrath and Thomas McGrath as plaintiffs. A third property, 13 Summerhill Place, had been sold in 1998 and was not at issue.
The contracts were signed on 8 June 1998, with completion due on 23 July. The court found that their terms entitled the purchaser to vacant possession. It rejected the defendant’s argument that the purchaser had taken the place of an earlier intended buyer, whose discussions had contemplated existing tenancies. The written contracts, the judge said, provided for vacant possession, and the purchaser had not been told of the expectation that the properties would be sold with tenants until after contracting.
The judge also rejected the contention that the purchaser’s conduct barred equitable relief. Although a prudent purchaser might have inspected the properties or made further enquiries, the court found no moral turpitude: the contracts promised vacant possession, and the purchaser had not misled the vendor.
But the court held that the purchaser’s delay was inequitable. The defendant had not completed by the agreed date; correspondence seeking completion went unanswered, and the beneficial owner later made clear that he would not agree to a sale without the tenants remaining. Proceedings began on 15 July 2004, nearly six years after the contracts. The judge accepted that a heated meeting with the beneficial owner may have intimidated the purchaser, but found it did not explain most of the delay. The rising value of the properties meant that enforcement would impose substantially greater financial hardship on the defendant and would let the purchaser benefit from his own delay.
The court therefore refused specific performance on the ground of laches. It directed that damages be calculated for each property by subtracting the contract price from its market value at mid-2005, unless the value at the date of judgment was lower, in which case that lower figure applies. The purchaser is also entitled to return of the deposits. The award relating to 9 Summerhill Place is to be held in trust for Thomas McGrath. The judgment did not state a final damages figure; it said no further losses had been proved.