High Court partially allows strike-out of specific performance claim for part performance but dismisses main option exercise claim.

THE HIGH COURT

Record No. 2024/4157 HP

[2025] IEHC 454

Between:

MADISON RETAIL LIMITED

Plaintiff

-and-

CARLOW SRH LIMITED and MUSGRAVE LIMITED

Defendants

JUDGMENT of Ms Justice Nessa Cahill delivered on 7 August 2025

1. By this application, the Defendants seek to strike out the Plaintiff’s proceedings (the “Proceedings”) pursuant to Order 19, rule 28(1) of the Rules of the Superior Courts (“RSC”) on the ground(s) that the Proceedings disclose no reasonable cause of action; amount to an abuse of the Court process; are bound to fail; and/or have no reasonable chance of succeeding (the “Application”).

2. The Defendants seek an alternative order striking out the Proceedings pursuant to the inherent jurisdiction of the Court on the grounds that they are frivolous and/or vexatious; bound to fail;

have no reasonable chance of succeeding and/or constitute an abuse of process.

3. The Proceedings concern the application by the Plaintiff (Madison Retail Limited, “Madison”)

for specific performance of an option for the purchase of a retail property. The case put forward by the Defendants is that there was no valid exercise of the option in question. The Defendants rely on the fact that the purported exercise of the option was at variance with the option agreement in terms of the manner of exercise of the option; the price of the option; and the timeframe within which the option could be exercised.

4. Madison’s position is that the technical notice requirements for the exercise of the option were waived by the Defendants or in the alternative that they are estopped from insisting on any such requirements. The Plaintiff also claims that there has been part performance of the Option. The parties are not in dispute as regards the applicable test to be applied to this application.

Factual Background

5. Madison operates a Centra supermarket at a property in Greenfield Shopping Centre, Maynooth, Co. Kildare (the “Property”). The directors of Madison are William and Georgina Donovan and William Donovan is the company’s sole shareholder. Since approximately 1994, the shop had been operated at the Property by Sean and Marie Donovan (parents of William Donovan, identified as John and Jackie in the statement of claim).

6. The head lease was entered into by Sean and Marie Donovan and Donovan’s Newsagents (Maynooth) Limited for a 25 year period from 1 March 1999 (the “Head Lease”). There were also four 500-year leases entered with Civil Engineers (Ireland) Limited and a 35-year lease entered with Deagle Limited on 12 September 1989. The head landlord under each of the leases was, at all times material to this Application, Greenfield Properties Limited (the “Head Landlord”).

7. In and around 2017 trading difficulties were encountered. On 22 December 2017 an agreement was entered between Musgraves, the First Named Defendant (Carlow SRH Limited, “Carlow”)

and Sean and Marie Donovan, whereby Carlow purchased the leasehold interests in the Property and the business for €900,000. An agreement was also entered to sub-let the Property to Madison (the “Sub-Lease”). The Sub-lease included each of the six leases identified above.

8. There was also a separate option agreement entered on 22 December 2017 between Carlow and Madison conferring on Madison the option of buying back the Property at a later date (the “Option Agreement”). The Option Agreement lists in its schedule the six leasehold interests already referred to. A deed of renunciation was executed by Madison on 22 December 2017 renouncing any entitlement to a new tenancy under the Landlord and Tenant (Amendment) Act

1980 or otherwise. These agreements are described by the Defendants as a rescue package that was put in place by Musgraves to assist the then-operators of the business.

9. The position of the Defendants is that the Head-lease and the Sub-lease expired on 28 February 2024 and Madison has been overholding since then. There is a dispute about the date of expiry but it is not of particular significance to this Application.

10. It is common case that the central issue in contention between the parties is whether the option was exercised. For the purposes of this Application, that requires an assessment of whether Madison’s claim that the option was exercised is bound to fail, has no reasonable chance of succeeding and/or discloses no reasonable cause of action.

Option Agreement

11. The Option Agreement defines Carlow as the “owner” and Madison as the “purchaser”. The “Option” is defined as “the option to purchase the Property” (clause 1.4). It refers to the lease between Carlow and Madison and provides that Carlow has agreed to grant to Madison an option to purchase the Property on the terms set out in that Agreement.

12. The term “Option Notice” is the notice served pursuant to clause 3.1:

“3.1 Subject to compliance with the conditions set out in clause 3.4, the Option shall be exercisable by service of the Option Notice in writing from the Purchaser to the Owner at any time during the First Option Period and the Second Option Period.

3.2 The Option Notice shall be served on the Owner at its registered office.

3.3 On the exercise of the Option, the Option Money shall be credited against the Purchase Price and in part payment thereof…”

13. There is a list of conditions that the Purchaser must satisfy before exercising the Option, none of which are relevant to this Application (clause 3.4).

14. Clause 4 provides that

“Immediately upon the exercise of the Option, there shall arise between the Owner and the Purchaser a binding agreement for the Owner to sell and the Purchaser to purchase the Property free of encumbrances for the Purchase Price and the Law Society’s General Conditions of Sale 2017 edition (as updated or modified by the Law Society of Ireland) shall apply.”

15. The “Purchase Price” is defined as the price “agreed or determined” pursuant to clause 5 (clause 1.9). These words “agreed or determined” are notable. Clause 5 in turn states that “in the event of the exercise of the Option the Purchase Price to be paid shall be the price determined in accordance with the terms of the Third Schedule.”

16. The Third Schedule sets out the Purchase Price as follows:

“Such sum as equals the total of:

1 The cost to Carlow SRH Limited of acquiring the Premises from Troltar Limited in accordance with the deed of transfer and assignment dated the 22nd day of December 2017.

2 The stamp duty payable by Carlow SRH on the deed of transfer and assignment stated the 22nd day of December 2017 between Troltar Limited and Carlow SRH Limited.

3 All incidental costs of acquisition of the Premises from Troltar Limited in accordance with the deed of transfer and assignment dated the 22nd day of December 2017 to include but not limited to legal costs, accounting costs, taxation costs as shall be determined by Carlow SRH Limited.

4 All costs incurred by Carlow SRH Limited and relating to refurbishment works to the Premises as shall be determined and certified by Carlow SRH Limited.

With the total of the above costs to be indexed upwards at higher of the consumer price index applicable at the date of the exercise of the Option and 2.5%.”

17. The definition of “Option Period” is “the period of 3 months ending on each of the First and Second Option Dates” (clause 1.7). The “First Option Date” is “the fifth anniversary of the Term Commencement Date as defined in the Lease” (clause 1.5). The Term Commencement Date is

22 December 2017. The First Option Date is therefore 22 December 2022. The “Second Option Date” is defined as “the sixth anniversary of the Term Commencement Date” (clause 1.6). This date if 22 December 2023.

18. There are no definitions of the terms “First Option Period” or “Second Option Period” as cited in clause 3.1, but the parties have proceeded on the basis that these terms are the option periods expiring on the First and Second Option Dates. Based on the definitions in clause 1, the option period based on the First Option Date is the period from 22 September to 22 December 2022.

The option period based on the Second Option Date is the period from 22 September to 22 December 2023.

19. The Agreement defines the date for completion of the sale, the “Completion Date”, as either the First Option Date or the Second Option Date, depending on whether the Option Notice is served in the First Option Period or the Second Option Period (clause 6.1).

20. Clause 8 of the Option Agreement is headed “Notices” and provides:

“Any notice or other communication to be served by one party hereto on the other, including a notice exercising the Option shall be in writing and shall (subject as herein provided) be sufficiently served if delivered by hand or posted by prepaid registered post to the last known address of the person to be served and any such notice shall be deemed to have been served at the time of delivery or 48 hours after the time of posting as the case may be.”

Relevant correspondence

21. The following correspondence is exhibited to an affidavit sworn by Kevin Kidney on behalf of Musgraves on 16 August 2024 in opposing the Injunction Application (which affidavit was also relied upon in the context of this Application):

(a) An email dated 25 March 2022 from Ger Blake (acting on behalf of Madison) to Sean Goggin (Musgraves) stating that “Sean Donovan is keen to prepare for the exercise of the attached Option Agreement later this year” and refers to wanting to “kick off discussion on this so the detail can be agreed” (emphasis added). The email includes the following question: “as regards the Price, as MRPI have benefitted from the depreciation charges on this asset over the past 5 years can we look at waiving the CPI increase noted?” It is also asked whether MRPI would consider contributing to certain upgrading costs and it is then said that “Ultimately I need to agree the Option Price so we can confirm what level of banking support we need to exercise the Option..” (emphasis added)

(b) A further email from Ger Blake to Sean Goggin (the date of which is not apparent from the papers furnished) in which he states

“As we discussed, we’d like to have a conversation at that juncture about accelerating the exercise of the option and indeed on the price. MRPI have been paid over €700,000 rent and availed of the capital allowances write downs so hopefully some form of reasonable compromise can be reached on price here”. (emphasis added)

(c) An email from Ger Blake to Sean Goggin of Musgraves dated 23 August 2022 in which it is stated: “we would like to propose a settlement figure with MRPI of €1.5 million wherein MRPI would agree to waive the CPI clause…” That email concludes with the offer of a meeting “with whomever is necessary to agree terms here and complete by December”.

(d) An email from Sean Donovan to Cormac Dawson (Musgraves) copied to Ger Blake, dated

30 August 2022 in which he refers to the Option Agreement stating – significantly – that “under the Option Agreement the purchase price is €1,527,734.30 plus CPI rate. When the original agreement was entered into it was envisaged that the CPI would remain constantly low and the discussion around it was that it was unlikely to be called up in the buy back….”

He refers to the rent of €700,000 having been paid and the fact that depreciation could not be claimed (as Musgraves paid for the refit), and continues, “so our ask in the buyback is to waive the CPI and also reduce the buyback amount by 66k”.

22. It is worth recording here that the Plaintiff’s case as pleaded in the statement of claim is that the Plaintiff did “informally” exercise the Option by that email of 30 August 2022 but “did not serve the notice… until August 2024”. It is also worth noting here that the correspondence in August 2022 refers repeatedly to the exercise of the Option conferred by the Option Agreement.

23. A draft contract was issued on 11 April 2023, which is stated to be subject to the consent of the “superior landlord”. There is then further correspondence from July 2023, including emails from Carlow to the solicitors acting for the Head Landlord regarding the proposed sale of Carlow’s interest in the Property to Madison and seeking consent to same.

24. The Plaintiff returned the contract, executed, on 15 September 2023. By March 2024, the Head Landlord ultimately agreed to consent to the assignments, but subject to certain conditions, including the execution of deeds of renunciation and the provision of security by Musgraves for the liabilities of Madison in the form of a deposit covering 5 years’ rent and service charges. The position of the Defendants is that they went to considerable lengths to secure the consent of the Head Landlord and the correspondence does support this position.

25. Among the correspondence exhibited to the affidavits that were relied upon were the following:

(a) Email of 11 March 2024 from Musgraves to Donovans attaching heads of terms for the assignment of the leases;

(b) Email from Ger Blake to Musgraves on 12 March 2024 raising an issue about the five-year cash deposit being required and stating that a standard deed of renunciation was acceptable and that no retrospective rent review was agreed to;

(c) Emails in July 2024 indicating that all points had been agreed/conceded;

(d) Email from Musgraves to Sean Donovan on 23 July 2024 listing the “workstreams” to include “agreement of 2 leases”, “loan documents”, “escrow agreement”, “consent to assignment of leases”, “option agreement contract”, and stating that the “rent has been paused from 20 June 2024”;

(e) Email from Sean Donovan to Musgraves of 23 July 2024 stating the request for a deed of renunciation was “a red line for us and will not be acceptable” and “needs to be removed.”

26. Ultimately, it seems that, while certain terms were agreed and a contract was drafted and executed by the Plaintiff, the requirement of a deed of renunciation (insisted on by the Head Landlord) was a stumbling block. The contract deposit was not paid and the conveyance was never completed.

27. The Defendants began to charge rent again as of 17 December 2024 (rent having been suspended in June 2024).

Procedural history

28. These Proceedings were issued on 8 August 2024. The orders sought by the Plaintiff are, in summary,

(a) An order for specific performance of the Option Agreement;

(b) An order restraining the Defendants from failing to perform their obligations under the Option Agreement;

(c) A declaration that the Plaintiff is entitled to purchase the Property in accordance with the Option Agreement;

(d) An injunction restraining the Defendants from making the deed of renunciation a condition of the Option Agreement;

(e) Damages.

29. An injunction application was issued on the same date, grounded on an affidavit of Wiliam Donovan of 8 August 2024. A replying affidavit was sworn by Kevin Kidney on behalf of the Defendants and an affidavit was sworn by Georgina Donovan in reply on 21 August 2024. A replying affidavit was in turn sworn by Cormac Dawson on behalf of the Defendants on 23 August 2024. By order dated 26 August 2024, the High Court (Quinn J.) refused the injunction.

30. The statement of claim was delivered on 31 October 2024. This motion was then issued on 6 December 2024, grounded on the affidavit of Cormac Dawson. On 23 December 2024, a replying affidavit was sworn by Georgina Donovan. Cormac Dawson then swore a replying affidavit on behalf of the Defendants on 13 January 2025.

31. Written submissions were delivered by the parties in the context of the injunction application.

Written submissions were also delivered for the purpose of this Application, with the Plaintiff delivering a second set of written submission on the second day of the hearing. The parties relied on all affidavits, exhibits and submissions delivered to date in the context of this Application.

Applicable Legal Test

32. There is no dispute between the parties as regards the principles that govern the striking out of proceedings. The jurisdiction to strike out proceedings at a preliminary stage is now largely if not entirely codified in the new formulation of O. 19, r. 28, which provides:

“The Court may, on an application by motion on notice, strike out any claim or part of a claim which:

i. discloses no reasonable cause of action, or ii. amounts to an abuse of the process of the Court, or iii. is bound to fail, or

iv. has no reasonable chance of succeeding.”

33. As noted by Simons J in In O’Malley v. National Standards Authority of Ireland [2024] IEHC

500 (para. 7),

“The amendment to Order 19, rule 28 has the practical effect of eroding the previous distinction between the jurisdiction to strike out and/or to dismiss proceedings pursuant to (i) Order 19 of the Rules of the Superior Courts, and (ii) the court's inherent jurisdiction. Nevertheless the earlier case law continues to have a relevance.”

34. A good summary of the applicable principles derived from the earlier caselaw can be seen in IBRC v. Purcell [2016] 2 IR 83 at [83]:

“The relevant principles can be summarised as follows:-

1. the court has jurisdiction pursuant to O. 19, r. 28 and also pursuant to its inherent jurisdiction to strike out proceedings if they are bound to fail;

2. in considering an application to strike out proceedings pursuant to its inherent jurisdiction the court is not limited to considering the pleadings of the parties but is free to consider evidence on affidavit relating to the issues in the case (per Costello J. in Barry v. Buckley [1981] I.R 306 );

3. this jurisdiction to strike out proceedings is one to be “exercised sparingly and only in clear cases” (see Costello J. in Barry v. Buckley);

4. moreover as McCarthy J. stated in Sun Fat Chan v. Osseous Ltd.[1992] 1 I.R 425, at p. 428 “[g]enerally, the High Court should be slow to entertain an application of this kind”;

5. in addition as was explained by Keane J. in Lac Minerals Ltd. v. Chevron Mineral Corporation (Unreported, High Court, Keane J., 6 August 1993) (and quoted with approval by the Supreme Court) in Supermacs Ireland Ltd v. Katesan (Naas) Ltd [2000] 4 I.R 273, a judge in considering an application to strike out or dismiss a claim must be confident that the plaintiff's claim cannot succeed no matter what might arise on discovery or at the trial of the action;

6. if the pleadings can be amended in such a manner as to save the action then the proceedings should not be dismissed (see McCarthy J. in Sun Fat Chan v. Osseous Ltd.);

7. the court can only exercise a jurisdiction to strike out a claim on the basis that “on admitted facts, it cannot succeed” (per McCarthy J. in Sun Fat Chan v. Osseous Ltd.);

8. the court in considering whether to strike out a claim “must treat the plaintiff's claim at its high water mark” (per Clarke J. in McCourt v. Tiernan [2005] IEHC 268, (Unreported, High Court, Clarke J., 29 July 2005, at p. 12);

9. the burden of proof lies on the defendant to establish that the plaintiff's claim is bound to fail (see Salthill Properties Ltd v. Royal Bank of Scotland [2009] IEHC 207, (Unreported, High Court, Clarke J., 30 April 2009)); and

10. the court should not require a plaintiff to be in a position to show a prima facie case, merely a stateable case, in an application to strike out (see Clarke J. in Salthill Properties Ltd v. Royal Bank of Scotland [2009] IEHC 20.)”

35. The Plaintiff and the Defendants rely on Keohane v. Hynes [2014] IESC 66 (“Keohane”) (as quoted in Moylist Construction Limited v. Doheny [2016] 2 IR 283) in which Clarke J. (as he then was) noted (at 6.9):

“In summary, it is important to emphasise the significant limitations on the extent to which a court can engage with the facts in an application to dismiss on the grounds of being bound to fail. In cases where the legal rights and obligations of the parties are governed by documents, then the court can examine those documents to consider whether the plaintiff's claim is bound to fail and may, in that regard, have to ask the question as to whether there is any evidence outside of that documentary record which could realistically have a bearing on the rights and obligations concerned. Second, where the only evidence which could be put forward concerning essential factual allegations made on behalf of the plaintiff is documentary evidence, then the court can examine that evidence to see if there is any basis on which it could provide support for a plaintiff's allegations. Third, and finally, a court may examine an allegation to determine whether it is a mere assertion and, if so, to consider whether any credible basis has been put forward for suggesting that evidence might be available at trial to substantiate it. While there may be other unusual circumstances in which it would be appropriate for the court to engage with the facts, it does not seem to me that the proper determination of an application to dismiss as being bound to fail can, ordinarily, go beyond the limited form of factual analysis to which I have referred.”

36. In Moylist, Clarke J. continued as follows (at para. 22):

“I would caution against the appropriateness of the use of the application to dismiss under the inherent jurisdiction of the court in relation to proceedings where, even if there are no factual disputes or any such factual issues as might come within the strictures identified in Keohane v. Hynes[2014] IESC 66, (Unreported, Supreme Court,

20 November 2014), nonetheless the legal issues or questions concerning the proper interpretation of documentation are complex. In such cases, the very complexity of the issues (even if the court has a fairly clear view on them) makes it difficult to determine, within the confines of a motion heard on affidavit, that the plaintiff's case is such that it can safely be said that it is bound to fail.”

37. The questions that need to be weighed in this case, in light of the forgoing principles, are whether there is a stateable case:

A. that the option was in fact exercised.

B. that the Defendants waived the formal requirements for the exercise of the Option.

C. that the facts give rise to an estoppel such as to justify the relief sought by Madison.

D. that there was part performance of the Option.

Whether the Option was exercised

Parties’ Positions

38. It is common case that the key question in this Application – and in these proceedings – is whether the Option was exercised.

39. Madison’s position in the statement of claim and written submissions is that the Option was exercised – informally – via the email of 30 August 2022 and that a formal notice was then sent on 27 August 2024 (written submissions, para. 13).

40. The three affidavits sworn on behalf of the Plaintiff for the purpose of the injunction application and this Application advance several different alternatives as to when the Option was exercised.

It was said that

- The parties “have engaged in implementation of the Option Agreement since 2023…”

(Georgina Donovan, 21 August 2024);

- “initiation of the option agreement was by email dated 30th August 2022..” (Georgina Donovan, 21 August 2024);

- The Plaintiff claims that it has “exercised the option agreement since September 2023”

(Georgina Donovan, 23 December 2024);

- “the Plaintiff did serve the Option notice in September 2024. I say the option is and was exercised previously” (Georgina Donovan, 23 December 2024);

41. William Donovan swore in the affidavit grounding the injunction application that there was evidence since June 2022 of the attempts to exercise the Option and he cites a list of emails beginning on 3 October 2023 as being relevant (affidavit of William Donovan of 8 August 2024).

42. The Defendants dispute the Plaintiff’s narrative and contend that the Option was never exercised and that the correspondence indicated an intention not to abide by the terms of the Option and, instead, to seek to renegotiate the purchase price.

43. It is contended that the negotiation for the purchase of the Property did not constitute the exercise of the Option. The negotiations resulted, it is said, in a draft commercial agreement that was separate to the lapsed Option Agreement. It is said that the Plaintiff did not wish to be bound by the terms of that Agreement and there was therefore no reference to CPI in the negotiated terms.

44. The Defendants’ position is that the Option expired on 22 December 2023 and is of no legal effect and that there is no real contest on the facts. The Defendants also point to inconsistencies in the Plaintiff’s case as regards the alleged exercise of the Option and dispute that an agreement was reached to waive CPI. The Defendants emphasise that the orders sought in these Proceedings refer to the Option Agreement as entered into and do not seek any variation of its terms.

Assessment

45. The first, and central, question is whether the Option was in fact exercised. This is not a question about whether the formalities required by the Option Agreement as to notice and timing were waived. That is a distinct point. The first question is whether there is a stateable basis to say that the Option as conferred and agreed by the Plaintiff and Carlow on 22 December 2023 was exercised at all.

46. From the affidavits, submissions and pleadings summarised above, it can be seen that there is a distinct lack of consistency as to when the Plaintiff claims the Option was exercised. This points to a weakness in the Plaintiff’s case.

47. Nonetheless, it is relatively clear that, by August 2022 (which was before the commencement of the First Option Period), the Plaintiff had decided to exercise the Option and communicated this to the Defendants. The Plaintiff also wished to vary the price agreed in the Option Agreement, but presented this as a request (“so our ask in the buyback is to waive the CPI and also reduce the buyback amount by 66k”), not an ultimatum. It was premised on the Option Price as the starting point, and then included a request to waive the CPI and a portion of the price. The correspondence from the Plaintiff at that time consistently refers to the “option” and the “option price”. It seems clear that the Plaintiff thought a variation of the terms of the Option was being agreed. It is also notable that the contract price ultimately agreed and included in the contract that was circulated in April 2023 was the Option Price of €1,527,734.30 (without the addition of CPI).

48. The Defendants appear to have agreed to “waive CPI” as the emails suggest. Georgina Donovan states “the price settled on waived the CPI of circa 10%” (21 August 2024); “over the year the contract for sale took cognisance of a variation in the option price agreed by the parties”

(Georgina Donovan, 23 December 2024);

49. While there are clear inconsistencies in the Plaintiff’s characterisation of the facts and the documents, and a lack of clarity as to the interaction and engagement between the parties, it cannot be said that the evidence at trial may not favour the Plaintiff’s case. It is possible that the evidence at trial, when analysed in full, may well support the Plaintiff’s account that the Option was exercised during the First Option Period, on the basis of an agreement of the parties to vary the price (by the waiver of the CPI element of the purchase price).

50. The Defendants have not demonstrated any principle of law or authority to the effect that the parties to an option cannot agree to vary the terms of the Option and still be bound by the initial Option Agreement. Indeed, I note that the Option Agreement defines the “Purchase Price” as the price “agreed or determined (as the case may be)” pursuant to clause 5 (clause 1.9).

51. There is a possible interpretation of the facts which could well entitle the Plaintiff to relief.

52. Applying the dicta of Clarke J. in Keohane, I am of the view that there may well be “evidence outside of that documentary record which could realistically have a bearing on the rights and obligations concerned”. This could include evidence of direct engagement between the agents for the parties, for example, which is not currently before me. If, on the other hand, the only available evidence at trial is the documentary evidence before me, I have examined that record and my view is that there is “a basis on which it could provide support for a plaintiff's allegations”. In particular, it could be found on the basis of the documents that the Plaintiff did intend, and take steps, to exercise the Option and that the correct interpretation of the engagement between the parties is that it was directed towards that end. I am of course making no such finding here, and merely point out the possibility that a more comprehensive evidential record could support the Plaintiff’s claim or that the documents now available could be construed in the Plaintiff’s favour.

53. In short, I do not believe there is no reasonable chance of the Plaintiff succeeding in its assertion that the Option was exercised (whether on 30 August 2022 or at a subsequent date). Consequently, it would represent a real risk of injustice to the Plaintiff to strike out these Proceedings.

54. In particular, the documentation is consistent with the Plaintiff (through its agents) having been of the view that the Option was being exercised and it would seem unduly rigorous on the basis of the relatively limited information available on this Application to deem that view and the claim based on it to be bound to fail. This would seem to be at odds with the obligation to exercise the jurisdiction to strike proceedings out “sparingly”. Both sides clearly intended that the Option would be exercised and the Defendants have gone to considerable lengths to support and assist the Plaintiff, and its predecessors, in retaining control of the Property. It would seem invidious to strike out these Proceedings when there is some prospect of success on the Plaintiff’s part (despite the apparent inconsistencies in the Plaintiff’s characterisation and presentation of its case identified by the Defendants).

55. From the Defendants’ side, there is no evidence before me to indicate that the Defendants formed the view that the negotiation of the price to waive CPI did remove the engagement from the scope of the Option Agreement. I have certainly seen no communication or indication to that effect in written communications to the Plaintiff. This would not necessarily defeat the Defendants’ characterisation of events, but it is a matter on which further evidence at trial may cast light and may be relevant to the plea of estoppel on which the Plaintiff relies.

56. One point of apparent confusion in the papers concerns references to a “call option” among the papers. The Defendants clarify that, if the Property was being conveyed to Madison, there was intended to be a new option agreement, a “call” option, which would confer an option on Musgraves to buy back the Property, if Madison was leaving the Musgrave (Centra) brand. This is entirely different to the Option on which the Plaintiff relies in these proceedings and the references to that call option are not relevant to this Application.

57. There is a separate question about waiver of the formal requirements for the exercise of the Option, which I will next consider.

Waiver of formal requirements

Parties’ Positions

58. Madison asserts that the Defendants (and Madison) waived “the formal notice requirements” of the Option Agreement (replying affidavit of Georgina Donovan, para. 6). This was referred to in the written submissions as a waiver of “the formal service of notice required” (para. 13). This is pleaded in the Statement of Claim as a waiver “of the timelines set out in the Option Agreement”

(para 18). It is said that this waiver of the necessary formalities can be inferred from the conduct of the Defendants in engaging with Madison in relation to the sale of the Property.

59. In particular, Madison relied on the fact that there were negotiations with the Defendants over the course of two years and it is said that this all related to the exercise of the Option. Reliance is placed on the negotiations between Sean Donovan and Musgraves (on behalf of Carlow)

(affidavit of William Donovan of 8 August 2024).

60. Madison also emphasises an averment on behalf of the Defendants to the effect that the negotiations that took place “were largely premised on” the Option Agreement (affidavit of Kevin Kidney of 16 August 2024, para. 23).

61. Madison claims that, during its interactions and negotiations with the Defendants, it believed that it was exercising the Option and relies on references in the correspondence to “the Option Agreement”. It is submitted on behalf of Madison that there is a strong basis on the facts of this case to contend that there was in effect an unspoken variation of the “service formalities” of the Option Agreement.

62. The Defendants’ position in reply is that the provisions of the Option Agreement are strict and mandatory in their terms. The Defendants rely on extracts from Wylie and Woods, Conveyancing Law (2019 at para 11.05); Fennell v. McDonagh [2017] IEHC 98; Cassidy v Baker [1969] 103 ILTR 40; and Knockacummer Wind Farm Limited v. Cremins [2018] IECA 252 (“Knockacummer”) as authority that the conditions attached to the exercise of options must be strictly complied with.

Assessment

63. In Knockacummer, the primary question was whether the option conferred could be exercised at any time or whether it could only be exercised after 2042. The Court of Appeal (Hogan J., Peart J concurring, with a separate judgment delivered by Whelan J. dissenting on this point) held that, while the option agreement expressly referred to the possibility of the option being exercised after 2042 and did not expressly preclude the option being exercised prior to that date, the provisions of the agreement as a whole must be interpreted as prohibiting its exercise at an earlier date. There was therefore an “implied prohibition” on the exercise of the right before 2042 (Hogan J., para 45).

64. The issue is quite different: the earliest specific date on which the Plaintiff contends the Option was exercised was 30 August 2022, which is just a matter of weeks before the First Option Period and is quite distinct from the facts of Knockacummer.

65. One aspect of Knockacummer that is potentially relevant here arises from the separate (partly dissenting) judgment of Whelan J. She addressed whether time was of the essence with regard to a leaseback option that was in place between the parties. Having observed that “in general time is of the essence in the exercise of an option agreement” (para. 151), Whelan J. went on to conclude that it was not in that case: “In this case the option in favour of the company is governed by the principles governing options in relation to leases where greater latitude on time provisions has been historically afforded” (para 156, Peart J concurring on this point). She relied on the decision of Charleton J. in Edward Lee & Co. Ltd. v. N1 Property Developments Ltd.

[2012] IEHC 494:

“Time will not be considered to be of the essence unless:

(1) the parties expressly stipulate that conditions as to time must be strictly complied with; or

(2) the nature of the subject matter of the contract or the surrounding circumstances show that time should be considered to be of the essence…”

66. While an option to lease is obviously different to an option to purchase, the judgment of Whelan

J. does indicate a need to consider whether time was intended to be of the essence. In this case, the Defendants’ reliance on the need to strictly adhere to time limits in the Option Agreement may need to be weighed at trial following full legal submissions on this point and in light of the extended engagement that appears to have taken place between the parties between 2022 and 2024.

67. The other authorities cited by the Defendants are not entirely on all fours with this case. In Fennell v. McDonagh [2017] IEHC 98 Eager J. states “this Court accepts that it is well established that parties are required to comply strictly with the conditions for the exercise of an option prescribed in a lease” (para 12). This is relied upon by the Defendants, but the context is somewhat different, as the Option Agreement here was a separate contract for the repurchase of a leasehold interest in the Property (which was previously owned by the Plaintiff). Further, as already noted, the impact of the judgment of Whelan J. in Knockacummer (with which Peart J.

concurred) may need to be assessed at trial.

68. Another issue with the Defendants’ reliance on the need for strict adherence to time limits for the exercise of options, is that the Plaintiff’s case (as pleaded) is that the Option was informally exercised on 30 August 2022 and that engagement in relation to it then continued throughout 2022 and 2023. The Plaintiff did communicate to the Defendants an intention to exercise the Option before the First Option Period (albeit with a variation in the price). There were then negotiations between the parties which did culminate in a draft contract.

69. If the Plaintiff’s case was to succeed (and I have decided it is not bound to fail), then there may be a good basis to contend that the Option was exercised during one or both of the Option Periods designated by the Option Agreement.

70. It is certainly difficult to see how the rules on time limits (which generally deal with notices that are sent too late, as in Cassidy v. Baker) are sufficiently clear that there is no reasonable prospect that the Plaintiff could be found to have exercised the Option within the meaning of, and in compliance with, the Option Agreement.

71. Further, there is no evidence before me that the Defendants at any time intimated to the Plaintiff that the agreement being negotiated was not based on the “option” to purchase as conferred on

22 December 2017, or that the Defendants’ agreement to waive CPI meant that the Option was no longer on the table or was cancelled.

72. Further evidence at trial may cast light on this aspect of the parties’ engagement and there may be further legal arguments to be advanced on waiver by conduct.

73. However, on the basis of the facts and law as presented to me, I cannot find that there is no reasonable prospect of the Plaintiff successfully demonstrating that the Defendants waived the formal notice requirements of the Option Agreement, by engaging with the Plaintiff towards an agreement for the sale of the leasehold interests in the Property.

74. I am satisfied that the Defendants have failed to discharge the burden of showing that the fundamental case being advanced by the Plaintiff – that the Plaintiff did exercise the Option and that the Defendants have waived the technical requirements of that exercise - is bound to fail or has no reasonable chance of success.

Estoppel

Parties’ Positions

75. Madison denies that the Option Agreement is lapsed and asserts that the Defendants are estopped from denying that the Option was exercised.

76. Madison in its written submissions sets out some very general statements about the doctrine of estoppel derived from three English cases including Grundt v. Great Boulder Proprietary Gold Mines Limited [1938] 59 CLR 641.

77. It is asserted that the Defendants are estopped from claiming the Option Agreement was not exercised, owing to (a) their conduct in inducing Madison to sign the Option Agreement and Deed of Renunciation (without the necessary Head Landlord consent) and (b) then engaging with Madison in a manner that “clearly indicated they were working towards the exercise of the Option Agreement” (written submissions, para. 42).

78. The Defendants dispute that the grounds of estoppel properly arise in this case.

Assessment

79. I do not believe the circumstances surrounding the entry into the Option Agreement can ground an estoppel in relation to the later exercise of the Option. The Defendants do not deny the existence of the Option Agreement or the rights it conferred. The question is whether it was subsequently exercised. The difficulty of establishing estoppel based on pre-contractual matters is confirmed as a matter of law in Knockacummer. Whelan J. (at para. 135) sets out the following passage from Hodge, Rectification, the modern law and practice governing claims for rectification for mistake (2nd Ed., 2016):

“The common assumption shared by the parties must be both unambiguous and unequivocal. Estoppel by convention is generally concerned with post-contractual rather than pre-contractual matters. In relation to pre-contractual matters the appropriate remedy is rectification, although the principle of estoppel by convention may be available where a particular clause or expression has an agreed mutuallyunderstood meaning.”

80. I am not persuaded there is a tenable or stateable case of estoppel based on the entry into the original Option Agreement on 22 December 2017. The situation is different with regard to the exercise of the Option. The Plaintiff’s case on this point is that the Defendants are estopped from denying that the Option was exercised, owing to their conduct in engaging in negotiations for the sale of the Property, without intimating that this was being done other than in accordance with the Option Agreement.

81. The limited material before me does demonstrate that communications were sent on behalf of the Plaintiff to the Defendants referring to “the Option” and calculating the price based on the Option Agreement. There was no correction of this apparent understanding on the Plaintiff’s part that the Option was being exercised. Further evidence at trial may allow for more conclusive analysis of the engagement between the parties and its impact. However, it is not appropriate for me to engage in a more detailed assessment of the facts on this Application.

82. As a matter of law, I am satisfied that the judgment of Whelan J. in Knockacummer provides support for the possibility that an estoppel may arise from a course of dealing such as to prevent a contracting party from disputing that an option has been validly exercised (the judgment of Whelan J. is the only judgment of the Court of Appeal in Knockacummer which addressed this issue, given that both Peart and Hogan JJ. proceeded on the basis the option could not be exercised prior to 2042). Whelan J. found that

“139. I am satisfied on the basis of the available evidence that the conduct of the respondent between March 2013 and February 2015 is consistent only with an acceptance that the first named appellant had validly exercised the option to purchase.

140. The corpus of communications that passed between the parties over that period is consistent with the parties engaging on an assumed state of facts. This assumption was shared by both sides and actively acquiesced in by the respondent.” (paras 139 and 140).

This finding underlines the heavily fact-specific analysis that must be carried out.

83. In assessing the plea of estoppel, I am mindful of the “significant limitations on the extent to which a court can engage with the facts in an application to dismiss on the grounds of being bound to fail” (Keohane, per Clarke J.). However, even if the case was to be limited to the documentary evidence adduced in this Application, it cannot be said that there is no reasonable possibility that the argument of estoppel would prevail.

84. It may also be observed that, if the Plaintiff was aware that the Defendants considered that the Option was being invalidated by a waiver of CPI or by the failure to comply with formal notice requirements, the Plaintiff could have decided to agree the full Option Price and/or could have served an Option Notice during the Second Option Period. I have seen no evidence that these issues were communicated to the Plaintiff.

85. While the evidence may be somewhat equivocal as to whether the Defendants’ conduct and communications are referable to the Option or to a new, separate commercial contract, I cannot say – on the basis of the evidence before me - that the argument of estoppel is bound to fail.

Part Performance

Parties’ Positions

86. Madison claims that the Option Agreement has been part performed and points to the suspension of rent by the Defendants, the signing of the contract for sale on 15 September 2023 and the raising of finance by Madison. The Plaintiff also points to acts of the Defendants in seeking to obtain the consent of the Head Landlord to the transaction.

87. In its written submissions that were delivered at the commencement of the hearing, Madison relies on various authorities on the question of part performance of contracts, including Mackie v. Wilde (No. 2) [1998] 2 IR 578.

88. The Defendants dispute that there has been part performance of the Option.

Assessment

89. The purpose of the doctrine of part performance is to ensure that a concluded oral contract which is performed in part by, and to the detriment of, one party is not then defeated and rendered unenforceable by the unconscionable deployment of the Statute of Frauds by the other party. This is plain from the judgment of the Supreme Court in Mackie v. Wilde (No. 2). There, Barron J (Hamilton CJ and Barringon J. concurring) cited the judgment of Lord Simon of Glaisdale in Steadman v. Steadman [1976] AC 536, including the dicta that the “part performance” must be “that of the party who had, to the knowledge of the other party, acted to his detriment in carrying out irremediably his own obligations (or some significant part of them) under the otherwise unenforceable contract”. Having analysed that and other English judgments, Barron J. noted, “… it was generally taken that the acts of part performance had to relate unequivocally to the actual contract.”

90. The doctrine is simply not applicable here. First, the Defendants are not seeking to contend that an oral agreement reached between the parties is unenforceable. Second, none of the acts relied upon can properly be characterised as acts of performance. No monies were paid by Madison or other steps taken by Madison to discharge its obligations under a concluded contract. An application for finance is an internal, preparatory step taken by the Plaintiff, not the discharge of an obligation to the Defendants. Third, even if there were acts of part performance, there is no identified basis for finding that they are referable to a contract based on the Option as opposed to a new, separate commercial agreement (as the Defendants contend): the acts would be the same regardless.

91. Finally, insofar as the Plaintiff seeks to rely on the attempts by the Defendant to obtain the consent of the Head Landlord as acts of part performance of the Option, this contention is bound to fail.

These are acts of the Defendants not the Plaintiff and cannot be relevant to showing part performance by, or detriment to, the Plaintiff. Moreover, this contention conflicts with the Plaintiff’s claim that the Option cannot properly be subject to the consent of the Head Landlord or the related requirement of a deed of renunciation (the Plaintiff contends such consent should, if required, have been obtained before the Option Agreement was entered into). Georgina Donovan avers that the requirement of landlord consent was “not reflected in the Option Agreement” and the Plaintiff did not agree to that requirement. The attempt then to rely on the steps taken by the Defendants to obtain the consent of the Head Landlord as acts of part performance of the Option Agreement is inconsistent with the Plaintiff’s own case.

92. The difficulty in reconciling these positions is readily apparent. I am of the view that the case based on part performance has no reasonable prospect of succeeding and should be struck out.

Proposed Amendment

93. On the second day of the hearing of this application the Plaintiffs, through their counsel, for the first time indicated an intention to seek to amend the plenary summons and statement of claim.

In circumstances where the motion was already part heard and the Plaintiffs had delivered two sets of written submissions as well as replying affidavits I find the timing of this to be wholly unsatisfactory. If the Plaintiffs believed that the proceedings could be amended in a relevant manner it was incumbent upon them to set forth the proposed amendments and to fairly put the Defendants on notice of those amendments and the effect they were asserted to have on this motion.

94. However, this is not a live issue, as I have already determined that the Defendants have not discharged the onus on them in this Application. It is not therefore necessary to consider the proposed amendment or whether it could save the proceedings from being struck out.

95. For the avoidance of doubt, however, I am of the view that the amendment proposed would not have assisted the Plaintiff if the proceedings were otherwise found to be unstateable. The amendment was to introduce a new claim for specific performance of the assignment evidenced in the contract that was executed in 2023 between the parties without the requirement of a deed of renunciation.

96. I have considered and accept the submissions by counsel for the Defendants that this case would be extremely difficult to reconcile with the case pleaded in the statement of claim or the evidence as presented to date. It is plain from the affidavits sworn on behalf of the Plaintiff that the central premise of the Plaintiff’s case is that the Option was exercised and that all negotiation and engagement that took place was wholly referable to the Option. Georgina Donovan, for example, avers that “at all times, the Plaintiff has acted on the basis that the Option was exercised”

(affidavit of 21 August 2024). The amendment being raised would directly contradict that case.

97. Far from saving the proceedings, I consider that the proposed amendment would in fact have undermined the case that is sought to be advanced by the Plaintiffs. As already noted, I do not need to, and do not, make findings based on the proposed amendment, as the proceedings in their current form have not been found to be bound to fail.

Conclusions

98. The Defendants have not discharged the onus of demonstrating that the Plaintiff’s claim has no reasonable prospect of success, is bound to fail or is an abuse of process within the meaning of Order 19, Rule 28. The jurisdiction to strike out a plaintiff’s claim is to be exercised sparingly and only in clear cases and I do not consider that this is an appropriate case for the exercise of that jurisdiction. The relief sought by the Defendants in this Application is therefore refused.

99. This is subject to the one qualification that the case based on part performance has no reasonable prospect of succeeding and that aspect of the Plaintiff’s claim is struck out in the exercise of the jurisdiction conferred by Order 19, Rule 28 to strike out “part of a claim”.

100. In light of the findings made in this judgment and the decision arrived at, my provisional view is that the Plaintiff is entitled to recover its costs of this Application from the Defendants. If the Defendants wish to contend for a different form of costs order, a written submission of no more than 2,000 words in length should be delivered by 20 September 2025, and the Plaintiff may deliver a replying submission of the same length by 4 October 2025. I will then list the matter before me at 10.30am on 8 October 2025 for the purpose of deciding the allocation of costs and making final orders on this Application.