The High Court found that the sellers of an apartment in Amiens Square, Dublin, were able to provide the title required by their contract, even though the development’s management company was listed for strike-off on the agreed closing date.
In a judgment delivered on 9 July 2008, Ms Justice Laffoy said the company’s status did not make the sellers’ title defective. The court indicated that it would declare the sellers were in a position to furnish title in accordance with the contract. It had not yet settled the precise form of that order and said it would hear the parties on that issue.
The case concerned a contract under which Eamon and Paula McCann agreed to sell Apartment 12, Amiens Square, to Mahmoud and Nouj S Zahedi for €317,500. The sale was agreed on or about 21 February 2007, with 16 March 2007 accepted as the closing date.
The apartment was held under a long lease. The lease provided for the development’s management company to become responsible for the estate’s reversions and common areas, and each unit lessee was to be a member. On 16 March, a Companies Registration Office search showed the company was “Strike Off Listed”, with that designation dated 18 February. The buyers’ solicitors said they would not accept the position without a satisfactory explanation and proposed resolution from the managing agent. The sellers’ solicitors responded that the company had not yet been struck off and directed the buyers to make enquiries themselves.
The buyers argued that the management company was integral to the title and the development’s management, and that the sellers could not complete until its status returned to “normal”. The sellers argued that the company was still in existence on the closing date, that the leasehold interest and associated rights could be transferred, and that the company’s status was not a title defect.
Justice Laffoy noted that the company remained registered on the closing date and that strike-off was not inevitable. The sellers assigned the leasehold interest, including the benefit of appurtenant easements and the lessor’s covenants, and the assignment also gave the buyers entitlement to membership of the management company. The lessor’s obligations remained with the developer.
The company was dissolved on 11 May 2007 for failing to file annual returns, but the court was told it was restored to the register within 12 months. The judgment noted that dissolution can lead unit owners to incur restoration costs, but concluded the sellers had no contractual duty to ensure the company was listed as “normal” on the closing date.
The court could not resolve disputes in the affidavits about whether the keys were provided or the basis on which the purchase money was paid. The parties were to address the consequences of the court’s finding between themselves.