Court adjusts damages in failed property sale by deducting stamp duty and interest from purchase price balance.

THE SUPREME COURT

040/2006 and 53/2006

Kearns J.

Macken J.

Finnegan J.

BETWEEN

DONAL DUFFY

PLAINTIFF/RESPONDENT

and

RIDLEY PROPERTIES LIMITED

FIRST NAMED DEFENDANT/APPELLANT

and

EDWARD STOKES

SECOND NAMED DEFENDANT

Judgment of Mr Justice Finnegan delivered on the 30th day of April 2008

By an Agreement for Sale dated the 7th May 2003 made between Ridley Properties Limited (“the Vendor”) of the one part

and the respondent (“the Purchaser”) of the other part the Vendor agreed to sell and the Purchaser agreed to purchase lands

(hereinafter “the lands”) being part of the lands comprised in Folio 12382 of the Register County Longford therein described

as follows:-

“ALL THAT AND THOSE part of the property of the townland of Edgesworthtown in the Barony of Ardagh and County of

Longford being part of the property described in Folio 12382 of the Register of the County of Longford comprising 2.05

acres or thereabouts statute measure being the property shown shaded green on the attached map hereto held by the

Vendor in fee simple.”

The Agreement for Sale was in the Law Society of Ireland form of General Conditions of Sale 2001 edition. The following

Special Conditions are relevant:-

“Special Condition 6

The Vendor shall grant a right of way to the Purchaser on completion over the access road at present being constructed

by the Vendor. The grant of said right of way shall be incorporated into the transfer to the Purchaser. The access road

shall be completed to the satisfaction of the Purchaser’s architect prior to completion.

Special Condition 7

The Vendor shall arrange for a wall to be constructed on the area marked red on the map attached hereto

prior to completion and the construction of the said wall, the dimensions and materials used shall be agreed

with the Purchaser’s architect before the commencement of the said works.”

The map attached to the Agreement for Sale was a photocopy of the Land Registry map marked as indicated. It contained

the following legend:-

“Area shaded green 2.05 acres excl. public road”.

The legend was signed Mary O’Hara B.E. M.I.E.I., Mary O’Hara and Co. Limited, Civil Engineering Consultants, Market

Street, Ballaghaderreen. The purchase price was €520,000 with a deposit of €52,000. The closing date was two weeks from

the date of the Agreement for Sale. The interest rate specified was 12% per annum.

On the 2nd September 2003 the Vendor issued a completion notice requiring completion of the purchase within a period of

28 days after service of the notice and making time of the essence. In circumstances which I will detail hereafter the

purchase was not completed in accordance with that notice. The Vendor issued the present proceedings on the 25th

November 2003 seeking specific performance of the Agreement for Sale and damages in lieu of or in addition to specific

performance. In February 2004 the Purchaser became aware that an Agreement for Sale had been entered into in respect of

the same or substantially the same lands between the Vendor and the second named defendant. That Agreement for Sale

was dated the 10th November 2003. The second defendant completed that purchase on the morning of the 28th November

2003.

Progress of the Transaction between the Vendor and the Purchaser

Kilrane O’Callaghan & Company Solicitors acted for the Vendor and Collins Crowley & Company Solicitors for the

Purchaser. Prior to returning the executed Agreement for Sale Collins Crowley & Company obtained confirmation that the

wall mentioned in Special Condition 7 would be constructed by Mr Kane (the Purchaser of an adjoining plot) and that the

right of way provided for in Special Condition 6 would be coloured and identified clearly on a map. Both Special Conditions

were the subject of discussion between the parties after which it was agreed that the Purchaser would be free to connect to

the access road when completed and that the wall was to be between two and three metres in height. On the 15th May 2003

the Purchaser’s solicitors raised requisitions on title and submitted a draft transfer for approval. The Vendor’s solicitors

replied to the requisitions on title on the 16th May 2003 and promised to forward a map showing the right of way duly

marked in the coming days and this was done on the 21st May 2003. However the map furnished also contained a legend

signed by Mary O’Hara which referred to the area to be transferred as 2.2 acres rather than 2.05 acres as provided for in

the Agreement for Sale. By letter dated 3rd June 2003 the Purchaser’s solicitors queried this. By letter dated 4th June 2003

the Vendor’s solicitors explained that the measurement in the Agreement for Sale excluded the public roadway whereas the

second map provided included one half the roadway adjoining the lands agreed to be sold. The Purchaser’s solicitors

submitted the map to an architect for approval and a digital survey was carried out by him. His conclusion was that the area

as marked on the second map excluding the roadway comprised 1.95 acres and including one half the roadway 2.031 acres:

there was also a difference in the boundaries along the western side of the lands agreed to be sold between the two maps.

The Vendor’s solicitors responded by letter dated 15th August 2003 in the following terms:-

“The map attached to the contract entered into between our respective clients was for identification purposes only. The

discrepancy arises from the fact that the map furnished with the contracts was a copy map only which resulted in the

dimensions of the map being distorted.

The map furnished with a letter of 21st May is also a copy of the original map file plan which may explain the

discrepancies. In any event, a digital survey of any property will reveal discrepancies as between the

boundaries and the file plan and those on the ground.

Notwithstanding the above our client is prepared to accommodate your client insofar as the corner points of

‘plot C’ is concerned and amend the corner points accordingly.”

There was delay in replying to the letter of 15th August 2003 as the solicitor dealing with the matter in the Purchaser’s

solicitors’ office was on holiday and on the 2nd September 2003 the notice to complete was served. On the 3rd September

2003 the Purchaser’s solicitors did reply in the following terms:-

“We refer to your letter of 15th August last in response to our letter of 4th July 2003 and confirm that we have forwarded

a copy of the same to our clients architects Messrs J.P. McHugh & Company and requested a further report from them as

a matter of urgency.

Our client has, however, requested us to point out to you that Special Condition No. 7 of the contract for sale

has not yet been complied with. We understand that the wall has been completed but does not comply with the

condition as the dimensions and materials used in the wall were never agreed directly with the Purchaser and

his architect J.P. McHugh & Company. The wall itself is not plastered. It is of varying heights ranging from

metre to 1.75 metres. There are also pillars constructed protruding on to the proposed site. The wall should be

3 metres high in order to conceal the rear of the adjoining premises.”

The Vendor’s solicitors replied by letter dated 5th September 2005 in the following terms:-

“We refer to yours of the 3rd September. The issue of the wall cannot hold up closing of this sale as this is the first time

we have heard from your client in relation to this specific requirement regarding the wall. In any event, we note he now

requires a 3 metre high wall. We have informed our clients of this and they have stated that this wall will be in place by

Monday 8th September. We therefore wait hearing from you as a matter of urgency regarding closing and in that regard

our client still intends to rely on the completion notice served herein.”

A further survey by the Purchaser’s architect disclosed that the area to be transferred as shown on the second map

comprised 1.95 acres resulting in a shortage of .10 of an acre. There was an offer by the Purchaser to complete the

purchase on the basis of a pro rata reduction in the purchase price of €25,366. The Vendor’s solicitors replied that the lands

to be sold were clearly defined on the ground at all times: the lands to be sold comprised 2.05 acres or thereabouts. Further

that it is not a valid exercise to rely on digitally generated maps which will differ from Land Registry maps based on

Ordnance Survey Sheets. The suggestion of an abatement in the purchase price was rejected. Correspondence continued

between the parties without prejudice to the completion notice but there was no resolution on the matters in issue. On the

31st October 2003 the Vendor’s solicitors wrote that his client was relying on the completion notice served and proceeding

accordingly. On the 6th November 2003 the Purchaser’s solicitor wrote that counsel had been briefed to draft High Court

proceedings. By the 11th November 2003 the Purchaser believed that the Vendor was in the course of re-selling the lands.

The plenary summons herein was issued on the 25th November 2003 and a lis pendens was registered on the 27th

November 2003.

It appears from affidavits filed in the matter that the Vendor entered into an agreement with the second named defendant to

purchase the Lands on the 10th November 2003 at a purchase price of €465,000. Requisitions on Title were raised on the

12th November 2003 and replied to on the same day. The requisitions were in the Law Society of Ireland standard form

2001 edition and included the following requisitions:-

14.4 Is there any litigation pending or threatened or has any Court Order been made in relation to the property or any part of

it or the use thereof or has any adverse claim thereto been made by any person.

14.5a Has any person other than the Vendor made any direct or indirect financial contribution or being the

beneficiary of any agreement or arrangement whereby that person has acquired an interest in the property or any

part of it.

b If so furnish now details of the interest acquired or claimed.

The Purchaser registered a lis pendens on the 27th November 2003. The defendant completed his purchase on the 28th

November 2003 having carried out searches on the afternoon of the 27th November at 4 p.m. which did not disclose the lis

pendens. The defendant’s dealing was lodged in the Land Registry on the 10th February 2004 and registration of the same

has now been completed.

Findings of Fact

The learned trial judge heard evidence over three days. Evidence was given by the Purchaser, two directors of the Vendor,

the second named defendant, the solicitors for the Purchaser, the solicitors for the Vendor, the Purchaser’s architect and the

Vendor’s engineer. The learned trial judge made findings of fact as follows:

1. The lands the subject matter of the Agreement for Sale form part of Folio 12382 of the Register County Longford and

are situate on the main road from Edgesworthtown to Longford and close to Edgesworthtown.

2. The Vendor, a development company, owned an adjacent site upon which it proposed to build houses. Planning

permission for that development required the use of portion of Folio 12382 of the Register County Longford for an access

road and footpath and open space. Prior to entering into the Agreement for Sale the Vendor sold a small portion of Folio

12382 to Mr. Kane who owned an adjacent garage business.

3. The lands comprised in the folio are the site of the old Mart in Edgesworthtown and the Mart buildings remained on the

site.

4. From 2001 to April 2003 the lands were on offer for sale. In April 2003 the second named defendant entered into

negotiations to purchase the same. At that time there were no physical features to indicate the proposed boundary of the site

on the south-western, western and north-western sides (“the western boundary”). The boundary of the small portion sold to

Mr. Kane was not identified on the lands. Yellow markings had been placed at certain points to roughly identify the western

boundary.

5. The purchase price of €480,000 was agreed with the second named defendant and a deposit paid. Before a contract was

signed the Vendor withdrew as a result of a dispute between its directors.

6. The Purchaser is a supermarket owner operating a supermarket in Edgesworthtown. The Purchaser commenced

negotiations for the lands on 14th April 2003 with the Vendor’s auctioneer but concluded the terms of an agreement directly

with the Vendor. He was informed by the Vendor’s auctioneer that the lands comprised 2.3 acres, was made aware that the

Vendor was retaining a portion of the Mart site for the purposes of an access road, footpath and green area but was not

made aware of the yellow markings.

7. Prior to signing the contract the Purchaser was aware of the area of the site being sold and had seen the yellow markings

on site but was not told that they were definitive boundary marks.

8. The Agreement for Sale was signed and matters proceeded between solicitors as hereinbefore detailed.

9. There were two site meetings as follows:-

(a) On the 6th May 2003 the Purchaser, his architect Mr. McHugh and Mr. Groarke a director of the Vendor attended on

site.

(b) On 5th June 2003 the same persons together with Ms O’Hara the Vendor’s engineer attended on site. There was a

conflict in the evidence and the learned trial judge made the following findings in relation to the meetings. There are thirteen

findings of fact in relation to these meetings.

(i) Prior to the first meeting Mr. McHugh had been instructed by the Purchaser that he was purchasing 2.05 acres excluding

the public road.

(ii) Mr. Groarke confirmed that the area being transferred was 2.05 acres.

(iii) At the first meeting there were yellow markings on the walls of the Mart and elsewhere and Mr. Groarke indicated that

he had put on those marks as a rough guidance of the proposed western boundary. Further the marks could not be relied

upon to properly determine that boundary. The Purchaser did not suggest that the marks had previously been given to him

as definitive markings.

(iv) Mr. Groarke, at Mr. McHugh’s request, agreed that he would have his engineer mark definitive points from which the

western boundary of the site could be deduced.

(v) The purpose of Mr. McHugh attending the site was to advise the Purchaser as to the area he was obtaining by reference

to the actual western boundary marked on the ground.

(vi) There was considerable uncertainty at the first meeting as to what was the accurate line for the western boundary. In

particular it was pointed out by Mr. McHugh that on the map attached to the contract the western boundary was a straight

line whereas on the ground it was “meandering somewhat”.

(vii) At all times Mr. Groarke made clear that his main concern was that he would have enough space between the western

boundary of the property being sold and the western boundary of the lands comprised in the folio to construct a road and

footpath to serve the housing development which the Vendor proposed to commence at the rear of the Lands.

(viii) On 5th June 2003 Ms. O’Hara met with Mr. Groarke at the site prior to meeting with the Purchaser and Mr. McHugh.

(ix) Ms. O’Hara was the person who had prepared the map attached to the Agreement for Sale and the second map. The

maps had been prepared by her reference to a map used in the application for the planning permission for the housing

development at the rear of the Lands. Her instructions were to include in the property for sale that portion not required for

the access road footpath and green space as per the planning permission. She prepared the maps by indicating a boundary

which she considered excluded those requirements.

(x) There were no physical features on the western boundary which identified the boundary of the site being sold as marked

on the map. The fact that part of the old Mart building went through the proposed boundary line at certain points made

identifying and marking the boundary line on the ground more difficult. Ms. O’Hara and a colleague identified certain

physical features such as a bridge on the road and a drain at the north-eastern point which she considered were identifiable

from the copy folio map and from those points scaling back the maps had been prepared. She attempted to mark with red

paint appropriate points to identify the intended boundary line on the ground. Certain of these were on the old Mart building.

Others were on the ground, a wall and one on a sheet of galvanised iron.

(xi) Ms. O’Hara has no recollection of using a ranging rod. Mr. McHugh was clear in his evidence that a ranging rod was

there and appeared to him to have been used as a marker. The learned trial judge concluded on balance that a ranging rod

was used by Ms. O’Hara and her colleague as a marking point on the site. On 5th June 2003 when Mr. McHugh and the

plaintiff arrived Ms. O’Hara indicated the points marked. She did not give to Mr. McHugh any dimensions she had used.

Mr. McHugh identified the marks on that day.

(xii) Mr. McHugh returned to the site a third time a few days later and carried out a digital survey using electronic equipment

known as a total station and data logger. He measured the total area enclosed by the site now identified with red markings as

1.95 acres. Mr. McHugh sent to the Purchaser’s solicitors a report dated 27th June 2003 following this survey. Whilst an

attempt was made at the hearing to explain the difference in area by reference to the possibility of the red mark on the

galvanise sheet having been moved the learned trial judge concluded as a matter of probability it was not so caused.

The learned trial judge made a number of findings in relation to the evidence as to what transpired between the solicitors.

The following which are relevant:-

1. The Vendor maintained that it was entitled to rely upon the completion notice. The Purchaser at all times asserted that it

was an invalid completion notice.

2. The Purchaser’s solicitor continued to seek a meeting on site between the Vendor’s engineer and the Purchaser’s

architect. This was resisted by the Vendor’s solicitors. The Purchaser’s solicitors as a ground for contending that the

completion notice was invalid maintained that there remains substantial uncertainty as to the identity on the ground of the

Lands.

3. On receipt of a letter from the Vendor’s solicitors dated 31st October 2003 informing them that the Vendor was relying

on the completion notice the Purchaser’s solicitors proceeded to instruct counsel and instituted the present proceedings on

the 25th November 2003 and the registered a lis pendens on the 27th November 2003.

4. The second named defendant’s purchase was completed on the morning of the 28th November 2003.

Proceedings before the High Court

On the pleadings the issues arising between the Vendor and the Purchaser are as follows.

1. Was the completion notice valid?

2. If the completion was not valid should the court exercise its equitable jurisdiction and refuse an order for its specific

performance.

As to the validity of the completion notice it was contended on behalf of the Purchaser that at the date of service of the

same the Vendor was not ready willing and able to complete for two reasons:-

1. Special Condition 7 had not been complied with as the boundary wall had not been built.

2. In relation to the identity of the lands agreed to be sold the Purchaser could not be certain of the identification on the

ground of the Lands.

It was not in dispute that the wall had not been built. Equally it was not in dispute that the Purchaser had

not given the Vendor his specifications and requirements for the wall and that no request had been made by

the Vendor to the Purchaser for such specifications. On this ground the learned trial judge was satisfied that

the Vendor was not ready, willing and able to complete the Agreement for Sale on 2nd September 2003 the

date of the completion notice and accordingly she held the completion notice to be invalid. In relation to the

second reason the learned trial judge held that the Vendor was not ready, willing and able to complete the

sale to the Purchaser of the lands as the Purchaser could not be certain of the identify on the ground of the

lands. On this ground also the learned trial judge held the completion notice is invalid. The particulars in the

Agreement for Sale refer to 2.05 acres as did the map attached to the same, the latter clarifying that this

area excluded the public road. The second map differed from the map attached to the Agreement for Sale

at the western boundary and it is not possible to determine with certainty where the western boundary is

located. A discrepancy of 0.10 of an acre might be considered to be insignificant and covered by the words

“or thereabouts” in the particulars and accordingly there was no uncertainty as to the area to be transferred.

The area shown on the second map intended to be attached to the transfer is shown as 2.22 acres. The

learned trial judge found that the area of the land to be transferred as shown on the second map excluding

the public road was 1.9 acres and that it was obvious to the naked eye that there were differences in the

location of certain of the corner points on the western boundary between the map attached to the

Agreement for Sale and the second map intended to be attached to the transfer. There was no agreement as

of the 2nd September 2003 as to the identity on the ground of the lands to be transferred. The learned trial

judge went on to find as follows:-

“There was no Special Condition included in the contract as to how the new western boundary was

to be identified on the ground. Having regard to the evidence of Ms. O’Hara as to the nature of the

map used for the contract I have concluded that it was not possible to identify in accordance with

any general condition in the contract the western boundary of the site to be sold by reference to the

map attached to the contract”.

The learned trial judge continued:

“Counsel for the first named defendants submitted that even if there were what was considered to

be a significant difference in the area enclosed by the red markings and that agreed to be sold in

accordance with the particulars of a contract, that such matter could be dealt with under Condition

No. 33 of the General Conditions of Sale. It does not appear to me that on the facts herein having

regard to the uncertainty surrounding exactly the lands agreed to be sold that condition 33 applies.

However even if it does so, in accordance with the decisions of the High Court in Keating v. Bank

of Ireland [1983] I.L.R.M. 295 and O’Brien v. Carney [1995] 2 I.L.R.M. 232 (with which I agree)

a Purchaser is not obliged to comply with a completion notice where the question of compensation

for mis-description has not been settled”.

Accordingly the learned trial judge found that the completion notice was invalid.

The learned trial judge then proceeded to consider whether or not applying equitable principles the remedy of specific

performance being discretionary she should order specific performance of the Agreement for Sale. She referred to Farrell

Irish Law Specific Performance at p. 223 where the author stated:-

“The relief may be withheld as an exercise of that discretion even where a plaintiff proves a valid

contract and no particular defence or ground for refusal is established.”

The Vendor contended that specific performance should not be granted for reasons of the uncertainty surrounding the lands

to be transferred under the contract. While this case was made in written and oral submissions no such plea was contained

in the defence. The submission was only made at the end of the evidence and the learned trial judge concluded that it would

be an unfair procedure to the Purchaser if she were to entertain a submission at that stage of the proceeding that the

uncertainty was such to render the contract invalid. In the alternative the Vendor relied upon a further passage in Farrell

Irish Law of Specific Performance at p. 7 where it is stated:-

“If a contract is ‘completely uncertain’ it is equally void at law and in equity. Occasionally there is a degree

of uncertainty which will lose the right to specific performance without also destroying remedies at law. As

Lord Redesdale pointed out in 1805

‘If it is certain to a degree, but doubtful as to the extent, equity would, I think would act infinitely

more wisely in leaving the party to the old remedy by action for damages, than to run the hazard of

doing injustice, in doing what is said to be more complete justice, by decreeing a specific

performance’.

The burden is on the plaintiff to satisfy a court of an agreement, the terms of which ‘are sufficiently certain to

justify a decree for specific performance’. He may expect to fail if he does not satisfy the court of the certainty

of the material terms even though it may believe that some complete and binding agreement was reached”.

On this submission the learned trial judge found as follows:-

“For the reasons which I have already set out above I have concluded that the contract for sale of the 7th May 2003,

between the plaintiff and the first named defendant did not desribe with certainty the lands to be transferred herein nor

did it include either in the general conditions nor by way of a Special Condition a mechanism by which the western

boundary of the plot to be transferred was to be identified on the ground.

I have concluded that this is a case where the uncertainty surrounding the determination on the ground of the

plot to be transferred is such that the court should depart from the normal rule and should now exercise its

discretion to refuse an order for specific performance and to award the plaintiff damages in lieu thereof. I am

reinforced in that view by reason of the attitude of the plaintiff as demonstrated in the correspondence sent on

his behalf by his solicitor in the month of September and first half of October 2003. At that time, following the

service of the alleged completion notice, as already stated there was at the time, what on the first defendant’s

side were “without prejudice” offers as to the terms on which the sale might be completed. For much of the

month of September 2003 at least it appears that both parties were genuinely interested in completing the sale

but yet no agreement could be reached as to the terms according to which the sale would be completed. In

September 2003 the plaintiff was both seeking a reduction in the purchase price and a meeting between

respective engineers the purpose of which was to attempt to agree new boundaries from those marked with the

red paint on the site. The plaintiff at this stage was resisting any attempt to compel him to complete the

transaction and the solicitor stated in the letter of the 23rd September 2003 ‘no court would compel our client

to close a transaction where the land to be transferred to him has not yet been definitively identified’.

At no stage throughout this correspondence did either party suggest that the contract provided a mechanism

for determining the boundary of the lands which were to form part of the sale. Even when, in October 2003,

agreement appears to have been reached upon a reduced purchase price the solicitor for the plaintiff was

maintaining as in the letter of the 22nd October 2003, that the boundaries are not adequately defined.

By this point in time the solicitors for the plaintiff had introduced the requirement of the lending institution

and created, whether unwittingly or not, what appears to have been a justifiable apprehension on the part of

the defendant as to the plaintiff’s then enthusiasm for completing the transaction.

I wish to make clear that the behaviour of the plaintiff in September and early October 2003 simply confirms me in the

view which I have formed. It of itself is not the primary reason for which I have determined the court should refuse an

order for specific performance. It hardly seems equitable to grant an order for specific performance in favour of a party

who has resisted completing a contract for sale upon the basis that the boundaries are not adequately defined when the

contract itself does not provide any mechanism or Special Condition as to how those boundaries should be defined. Such

definition in a manner acceptable to both parties remains dependant upon agreement being reached between the parties

or their respective engineers or architects. The court has no power to compel such an agreement.”

The learned trial judge went on to hold that the Purchaser was entitled to damages in lieu of specific performance.

The learned trial judge having so decided an issue arose in the following circumstances. The statement of claim sought

damages for breach of contract in the following terms:-

“Further, or in the alternative, damages for breach of contract and/or negligence against the first defendant, its servants

or agents.”

The learned trial judge asked the Purchaser’s counsel on the opening of the case if the claim being pursued was for specific

performance only. The effect of counsel’s reply was that the Purchaser was pursuing a claim for specific performance with

the alternative of damages in respect of the damage, loss and expense sustained by the plaintiff by reason of the wrongful

repudiation of the Agreement for Sale. In the course of the exchanges counsel said:-

“I am asking basically for an affirmation of the contract, My Lord, and a decree of specific performance.”

The learned trial judge understood that the Purchaser was seeking specific performance but was not seeking any special

damages; rather general damages were being sought on the basis that the proposed development of the lands by the

Purchaser had been delayed. No evidence was given to support a claim for special damages as to the difference in value of

the site between May 2003 and the date of the hearing. At the conclusion of the Purchaser’s evidence counsel on behalf of

the Vendor asked that the Purchaser should then elect as to the remedy he was seeking. It was submitted that if the

Purchaser elected to seek specific performance he is not entitled to damages. As a result of exchanges it was quite clear that

the Purchaser was seeking specific performance but if for whatever reasons that relief were not granted he was seeking

damages in lieu of specific performance. Further if specific performance should be granted the Purchaser was seeking

damages in addition thereto for the delay in completion. In relation to damages in addition to specific performance counsel

said that he was not seeking special damages but general damages for delay for the loss of business opportunity. Accordingly

the Purchaser’s claim for damages encompassed the following:

1. In the event that specific performance is not awarded, damages in lieu of specific performance.

2. In the event that specific performance is granted, damages in addition thereto by way of general damages for

delay and the resulting loss of business opportunity. The Purchaser’s evidence had been that he proposed

building a new supermarket on the lands which would be twice as big as the one which he operated and would

have resulted in a natural expansion of the business and that that has been delayed.

The learned trial judge decided to leave over the hearing of further evidence should that be necessary in relation to damages

in lieu of specific performance. She then made the following ruling:-

“Notwithstanding this ruling I have concluded that it is necessary for me in order to determine the

appropriate amount of damages to which the plaintiff is entitled against the first named defendant to obtain

further evidence in relation to the following matters only:-

(a) Whether the solicitor’s for the first named defendant still retain the deposit paid by the plaintiff pursuant to the

contract. If so the amount of interest earned thereon to date. If not, the date upon which the same was paid to the first

named defendant.

(b) Whether any fees were paid by the plaintiff to Mr McHugh or are due and owing by the plaintiff to Mr McHugh for

the work done by Mr McHugh for the plaintiff in connection with the contract in 2003.

(c) Whether any fees have been paid or are due and owing by the plaintiff to his solicitor in connection with the work

done in connection with the contract up until the 22nd October 2003.”

Having determined that an order for specific performance should be refused it was unnecessary for the learned trial judge to

consider the claim against the second named defendant.

The damages hearing and the award of damages

When the matter was re-listed in relation to the time and mode for taking of the additional evidence referred to in the learned

trial judge’s judgment counsel for the Purchaser informed the court that the learned trial judge had misunderstood the

plaintiff’s position in relation to his claim for damages in lieu of specific performance and that it had been the intention of the

plaintiff at all times to pursue a claim for loss of bargain based on the increased value of the property since the date of the

contract in the event that specific performance should be refused. He sought to adduce evidence of the current value of the

lands. Counsel for the Vendor objected to the admission of any evidence other than that referred to in the judgment of the

learned trial judge. The learned trial judge had understood from counsel for the Purchaser that he was not making any claim

for special damages whether in relation to a claim for damages in addition to specific performance or in relation to damages

in lieu of specific performance. Counsel for the Purchaser informed the court that in dealing with the questions raised as to

the nature of the claim for damages he was addressing only the claim for damages in addition to specific performance. The

additional evidence which the learned trial judge directed in her judgment of the 7th July 2005 was so directed on the basis

of her misunderstanding of what she had been told by counsel for the Purchaser that no claim for special damages was being

made. She had understood counsel to have informed her that no claim was being made, that the lands had increased in value

between May 2003 and the date of the hearing. The learned trial judge carefully re-considered the transcript of the

exchanges which took place on the second day of the hearing. No order had been made up on foot of the learned trial

judge’s ruling. The learned trial judge determined that in the circumstances she was entitled to alter the ruling which she had

given.

The learned trial judge proceeded to hear evidence of valuation. In relation to the deposit of €52,000 she held that the

Purchaser was entitled to the return of the same together with interest earned thereon. The Purchaser’s valuer placed a

valuation on the lands as at the 7th July 2005 of €2,000,000. The Vendor’s valuer placed a valuation on the lands at that

date of €900,000. The learned trial judge held that the 7th July 2005 was the appropriate date by reference to which the loss

of bargain should be calculated. The learned trial judge determined that the value of the lands as at the relevant date was

€1,400,000 and the measure of damages for loss of bargain was accordingly €880,000. She refused to assess damages at an

earlier date on the basis of the Vendor’s submission that the proceedings ought to have been heard and determined in July

2004 and also refused to take into account that the Vendor had not been enriched by the second transaction the same having

been at the reduced price of €485,000.

The Notice of Appeal and Notice to Vary

The vendor in its Notice of Appeal relies upon the following grounds:-

1. The learned trial judge erred in law in determining that the plaintiff was entitled to an award of damages in lieu of specific

performance.

2. The learned trial judge erred in law in awarding damages in lieu of specific performance where it was determined that the

court did not have the power to compel the Agreement by reason of the fact that the contract did not describe with certainty

the lands to be transferred and did not contain a mechanism by which the boundaries were to be defined.

3. Since the reason why the learned High Court judge refused to grant specific performance was that the alleged contract

neither specified the lands to be sold nor provided a mechanism for those lands to be ascertained it followed that there was

no binding contract between the plaintiff and the first defendant and consequently there could be no breach of that alleged

contract by the first defendant, so that it was inappropriate to award the plaintiff damages for breach of contract by the first

defendant.

4. The learned trial judge erred in law in awarding damages in lieu of specific performance when the logic of the judgment

required a finding that there was not a binding contract between the plaintiff and the first defendant.

5. The learned trial judge erred in law in awarding damages in lieu of specific performance when specific performance could

not have been decreed because no valid or enforceable contract existed between the plaintiff and the first defendant.

6. Since the learned trial judge could not have decreed specific performance it was not open to her to award damages in lieu

of specific performance.

7. The learned trial judge erred in law in not finding that there was no concluded contract between the plaintiff and the first

defendant.

8. The learned trial judge erred in law in allowing the plaintiff adduce evidence of loss of bargain after the issues had been

determined and judgment handed down on the 7th day of July 2005.

9. The learned trial judge erred in law in measuring damages for loss of bargain.

10. The learned trial judge erred in law in not assessing damages for loss of bargain by reference to the current market price

at the date of the judgment. (sic)

11. The learned trial judge erred in law in not assessing the quantum of damages by reference to a date earlier than the date

of judgment.

12. The learned trial judge erred in the method of assessment of the current market value of the said property.

13. The measurement of damages by reference to current property values where there has been a dramatic increase in those

values is unfair and inequitable and does an injustice to the first defendant.

14. The learned trial judge ought to have taken into account the finding that there was a justifiable apprehension on the part

of the first defendant as to the plaintiff’s enthusiasm for completing the transaction when measuring damages herein.

15. The amount of the award of damages was excessive and amounts to a windfall profit for the plaintiff.

The Purchaser’s notice to vary challenges the learned High Court judgment insofar as she refused specific performance and

granted damages in lieu and seeks an order for specific performance.

The following grounds are relied upon:-

1. The finding of the learned trial judge that there was uncertainty in relation to the identity of the property to be sold when

the respondent agreed to purchase the property is not borne out by the weight of the evidence.

2. The learned trial judge failed to take account of the fact that the appellant altered the boundaries of the lands to be sold

after the initial agreement with the respondent.

3. The learned trial judge was mistaken in fact in finding that the respondent was not told that the yellow markings on the

site where definitive boundary marks.

4. The learned trial judge was mistaken in fact and in law in failing take account of the fact that the appellant by agreeing to

take a reduced purchase price had acknowledged that it had reduced the size of the property to be sold from that originally

offered to the respondent.

5. The learned trial judge was mistaken in fact and in law in holding that the uncertainty, if any, in relation to determining

the lands to be transferred was such as to deprive the respondent of his entitlement to a decree for specific performance.

6. The learned trial judge was mistaken in fact and in law in holding that the uncertainty if any in relation to the western

boundary of the lands to be transferred was such as to deprive the respondent of his entitlement to a decree for specific

performance.

7. The learned trial judge was mistaken in fact and in law in holding that the uncertainty, if any, in relation to determining

the lands to be transferred was such as to justify her exercising her discretion to refuse a decree to a specific performance.

8. The learned trial judge was mistaken in fact and in law in failing to take any or any sufficient account of the fact that the

appellant having conceded that the corner points of the boundaries should be adjusted failed to take any further steps in that

regard notwithstanding the repeated requests of the respondent that the respective engineers meet on site for that purpose.

9. The learned trial judge was mistaken in fact in finding that the appellant had justifiable apprehension as to the

respondent’s enthusiasm for completing the transaction.

10. The learned trial judge was mistaken in fact in holding that the respondent had any reasons other than his justifiable

requirement that the boundaries of the lands be properly defined on the ground for not completing the transaction.

11. The learned trial judge was mistaken in fact and in law in finding that the contract should have included a mechanism for

the finding the western boundary of the lands.

12. The learned trial judge erred in law when, having found that there was a validly subsisting contract and that the twenty

eight day completion notice served by the appellant was invalid and of no effect failed to exercise her discretion by granting

specific performance.

13. The learned trial judge erred in failing to take cognisance of the fact that the appellant had subsequently constructed

boundaries around the lands the subject matter of the contract and that the lands enclosed by the said boundaries comprised

just short of 2.05 acres resulting in the removal of the uncertainty, if any, in

relation to the identity of the lands to be sold.

14. The learned trial judge erred in not taking any or any sufficient cognisance of the conduct of the appellant purporting to

enter into a contract with the second named defendant for the sale of the said lands when there was already an existing

contract with the respondent.

15. The learned trial judge erred in not taking any or any sufficient cognisance of the fact that the appellant in purporting to

enter into a contract with the second named defendant was prepared to accept a purchase price which as €55,000 less than

that in the contract with the respondent for the same lands a reduction of 10.5% in rising market.

16. The learned trial judge erred in not taking any or any sufficient cognisance of the conduct of the appellant in giving false

and misleading replies to requisitions to the second named defendant in which they knew to be false and misleading in order

to avoid disclosing the existence of the prior contract with the respondent.

17. The learned trial judge erred in not taking any or any sufficient cognisance of the conduct of the appellant in giving false

and misleading replies to requisitions and which they knew to be false and misleading in denying that there was any dispute

or any litigation pending in order to avoid disclosing that another party had an existing interest in the property.

On the hearing before this court the Vendor’s grounds of appeal were reduced and consolidated to four grounds as follows:-

1. That the learned trial judge was in error in determining that the plaintiff was entitled to an award of damages in lieu of

specific performance.

2. That the learned trial judge was in error in allowing the plaintiff to adduce evidence of loss of bargain after the issues had

been determined.

3. The learned trial judge was in error as to the relevant date for assessing damages.

4. That the learned trial judge was in error in the method of assessing valuation.

I propose dealing with each of these submissions in turn.

1. That the learned trial judge was in error in determining that the plaintiff was entitled to an award of

damages in lieu of specific performance.

The learned trial judge found that that there was a subsisting contract, the notice to complete being invalid. Nonetheless she

found that it was not possible to identify the Lands on the ground in accordance with any general condition in the contract,

in particular the western boundary of the Lands, nor was it possible by reference to the map attached to the contract.

Further she found that the general and special conditions of the Agreement for Sale did not provide a mechanism whereby

the western boundary of the Lands to be transferred was to be identified on the ground. On this basis she concluded that the

uncertainty surrounding the identity on the ground of the Lands is such that the court should depart from the normal rule

and should exercise its discretion and refuse an order for specific performance. In the course of her judgment she said:-

“It hardly seems equitable to grant an order for specific performance in favour of a party who has resisted

completing a contract for sale upon the basis that the boundaries are not adequately defined when the contract

itself does not provide any mechanism or special condition as how those boundaries should be defined. Such

definition in a manner acceptable to both parties remains dependant upon agreement being reached between

the parties or their respective engineers. The court has no power to compel such an agreement.”

The Vendor sought to point to an apparent inconsistency between the finding that there remained in existence a subsisting

contract and the finding of uncertainty as to the boundaries of the Lands on the ground and argued that by reason of that

uncertainty there could be no concluded agreement. This issue arose at the trial and the learned judge found that while the

case had been made in written and oral submissions that there was no concluded agreement, no plea to that effect was

contained in the defence. The submission was made at the end of the evidence and the learned trial judge concluded that it

would be an unfair procedure to the Purchaser if she were to entertain a submission at that stage of the proceedings that the

uncertainty was such as to render the contract invalid.

On behalf of the Vendor it is also submitted that notwithstanding the existence of a concluded and still subsisting Agreement

for Sale the court had no jurisdiction to award damages in lieu of specific performance. Firstly, it is submitted, that specific

performance could not be granted because of lack of mutuality. A Court of Equity will not grant a decree for specific

performance of an agreement unless at the time the agreement was entered into it might have been enforced by either of the

parties against the other. By reason of the uncertainty as found by the learned trial judge neither party was entitled to

specific performance of the Agreement for Sale they contended for and accordingly neither would be entitled to damages in

lieu. As I understand it this is merely to restate the argument that there was no concluded agreement in the first place. In any

event mutuality is a matter to be considered in relation to the exercise of the court’s discretion as opposed to a bar on the

award of specific performance: Price v Strange [1978] Ch. 337. Again it is submitted that Lord Cairn’s Act section 2

conferred upon the court jurisdiction to award damages in lieu of specific performance only where it had jurisdiction to grant

specific performance. Reliance is placed on Ferguson v Wilson [1866] 2 Ch. App. 77 where Lord Cairn’s held that the

Act:-

“did not in any way give the court a power where it had no jurisdiction to decree specific performance for want of the

subject matter whereon its decree would operate to give damages by reason of some antecedent breach of contract.”

Again in Lavery v Purcell [1866] 39 Ch. D. 508:-

“The jurisdiction to give damages in substitution or in addition to specific performance has not been extended to cases

where specific performance could not possibly have been directed.”

I have no difficulty in accepting that this is undoubtedly the law.

For the Purchaser it is submitted that the learned trial judge having found that there was a subsisting contract exercised her

discretion in refusing to decree specific performance and instead under Lord Cairn’s Act to award damagers in lieu. She

relied on a passage in Farrell, Irish Law of Specific Performance at page 7: 1.11:-

“If a contract is ‘completely uncertain’ it is equally void at law and in equity. There is a degree of uncertainty which will

lose the right to specific performance without also destroying remedies at law. As Lord Redesdale pointed out in 1805

(Harnett v Yielding [1805] 2 Schoales & Lefroy 549):-

‘…if it is certain to a degree, but doubtful as to the extent, equity would, I think, act

infinitely more wisely in leaving the party to the old remedy by action for damages, than

to run the hazard of doing injustice, in doing what is said to be more complete justice,

by a decree of specific performance.’

The burden is on the plaintiff to satisfy a court of an agreement, the terms of which ‘are sufficiently

certain to justify a decree of specific performance (Williams v Kenneally) [1912] 46 I.L.T.R. 292 at

294.) He may expect to fail if he does not satisfy the court of the certainty of the material terms

even though it may believe that some complete and binding agreement was reached.”

In this case the learned trial judge had found a completed and subsisting agreement and her refusal to order specific

performance was merely an exercise of her discretion. The power to award damages in any event existed at common law

and was not dependant on Lord Cairn’s Act.

I am satisfied that it was no part of the Vendor’s case that the contract was uncertain. That case was not pleaded nor was it

canvassed in evidence. No application was made to amend the pleadings. In those circumstances I am satisfied that it was

within the learned trial judge’s discretion to refuse to allow that issue to be raised. Quite apart from this insofar as the

learned trial judge held that there was a subsisting contract I am satisfied that she was correct in so doing. It is the

experience of conveyancers’ that there are very many contracts for the sale of registered land where the lands to be sold are

identified by reference to a Land Registry Map. For the entire of the folio this would generally give rise to no difficulty

notwithstanding that Land Registry Maps are not conclusive as to boundaries. Where part of a folio is being sold almost

invariably a photocopy folio of the Land Registry Map is marked and even if there are boundaries ascertainable on the

ground by way of hedges and ditches there remains the difficulty identified in the course of the evidence in this case that

scaling from such a map onto the ground cannot be conducted with complete accuracy: the same is true of an original

Ordnance Survey Sheet. Such sales are in general completed without difficulty and where difficulty is encountered it can be

resolved. The reason for this is the obligation which the law places on the parties to a contract for the sale of land as

identified by Costello J. in Northern Bank Limited & Ors v Duffy [1981] I.L.R.M. 309. He cited with approval a passage

from Bayley-Worthington and Cohen’s Contract [1909] 1 Ch. 648 in the context of a default by a party to a contract as a

result of which it was not completed but it is clear from the passage which I now cite that it is of wider application. The

passage cited by Costello J. with approval is the following:-

“Default must, I think, involve either not doing what you ought or doing what you ought not, having regard to

your relations with the other parties concerned in the transaction; in other words it involved the breach of

some duty you owe to another or others. It refers to personal conduct and is not the same thing as breach of

contract. If A contracts that B shall do something by a certain day and B does not do it by the day named A

commits a breach of contract; but if the question arises whether delay be due to A’s default, A’s personal

conduct has to be considered, and the question will be whether he has committed some breach of his duty

towards B. So in contracts for the sale of real estate providing for completion at a certain date and containing

provisions as what is to happen if completion be delayed beyond that date by or without the default, or wilful

default, of either party, the conduct of that party has to be considered; and if he has been guilty of no breach

of duty he will not, I think be in default within the meaning of the contract. Of course, the duties of each party

towards the other must be determined by all the circumstances, including the nature of the contract and its

provisions; and in determining these duties the complexities of the English law of real property must be borne

in mind. The duties of, at any rate, the Vendor under contract for sale of real estate cannot be gauged by the

standards applicable to other contracts, for example the sale of goods.”

Costello J. remarked:-

“Just as a Purchaser owes a duty to his Vendor in the course of the implementation of a contract for sale so

does a Vendor owe a duty to the Purchaser. The nature and extent of that duty will, of course, be different as

the sale progresses.”

A consequence of this is that there is a duty on a Vendor to deal with the reasonable requisitions and objections of a

Purchaser. Failure to do so would, as in this case, prevent a Vendor from relying on a Completion Notice. In the present

case it was common case that the map attached to the Agreement for Sale and the map proffered by the Vendor to be

attached to the transfer did not admit of the western boundary being accurately delineated on the ground. There was a

difference in area between the two maps. There was a difference in the configuration of the western boundary of the Lands.

I am satisfied that notwithstanding the provisions of General Condition 14 the Purchaser was entitled to an accurate map to

be attached to the transfer from which boundaries could be accurately ascertained most likely by accurate dimensions

marked thereon or alternatively to have delineated on the ground those lands which the Purchaser proposed to transfer in

performance of the Agreement for Sale: see Lindsay & Forder’s Contract [1895] 72 L.T. 832 where a plan attached to

Particulars of Sale had endorsed thereon a note “this plan is simply prepared as a guide to intending Purchasers, and its

accuracy in regard to area, measurement, abuttals, or otherwise is in no way guaranteed” and it was held that the map

formed part of the contract and the Purchaser was entitled to a conveyance of the whole of the lands coloured thereon. The

precise boundary in this case was a matter of considerable importance to the Vendor who required access to other lands and

to ask the Purchaser to complete in the circumstances which prevailed at the date of service of the notice to complete was to

invite the Purchaser to run the risk of future disputes and litigation. The Purchaser’s insistence in having the lands marked

on the ground was reasonable and appropriate in the absence of a plan from which the Lands could be scaled. In the event

that a dispute then existed the Special Conditions provide an appropriate and well tested remedy in General Condition 33 for

any discrepancy that might result between the lands as delineated on the map attached to the Agreement for Sale, the second

map and the lands as marked out on the ground. If the discrepancy was of trifling materiality no compensation shall be paid.

No compensation is payable in relation to any error in a plan furnished for identification only as here. However under

General Condition 33 the Vendor cannot be required to accept property which differs substantially from the property agreed

to be sold whether in quantity, quality, tenure or otherwise. If the Purchaser will be prejudiced materially by reason of any

such difference the Agreement for Sale provides that the applicability of General Condition 33 and the amount of any

compensation shall be determined by arbitration. Neither party sought to invoke General Condition 33. Even if the contract

contained no provision to deal with discrepancies the court will resolve any difficulty and may award specific performance

with an abatement and where appropriate will direct an inquiry as to the amount of the abatement: Barnes v Wood 8 Eq.

424. It is well settled that where an issue as to compensation arises the Vendor may not rely upon a notice to complete:

Keating & Ors v Bank of Ireland [1983] I.L.R.M. 295.

Upon the basis that the court had no jurisdiction to grant specific performance there being no concluded agreement the

Vendor argues that the court likewise had no jurisdiction to grant damages in lieu of specific performance. If the premise

were correct in this case, that there was no concluded agreement, the court would have no jurisdiction to award damages in

lieu of specific performance. However the issue as defined in the pleadings and as presented to the court was whether there

being a concluded agreement that agreement had been determined by a notice to complete. Where there is a concluded

agreement but the court in its discretion refuses to grant specific performance the court has jurisdiction to award damages.

Having regard to the ruling of the learned trial judge, which in my opinion was correct, it is not open to the Vendor on this

appeal to argue that there was no completed agreement.

The award of a decree of specific performance is discretionary. The award of damages whether at common law for breach

of contract or under Lord Cairn’s Act in lieu of a decree for specific performance arises where there is a breach of a

concluded subsisting agreement. It is a matter for the plaintiff to seek whichever remedy he wishes. The circumstances in

which the court will exercise its discretion and refuse to award specific performance are myriad. Both of the cases referred

to in Farrell in the passage cited above require some scrutiny. In Williams v Kenneally Barton J. held that there was a

binding agreement for a lease of the exclusive right of fishing on the River Lee where it passed through the lands of the

defendant. There was no memorandum and the plaintiff relied on part performance. The plaintiff alleged that the agreement

was for a term of five years for the season 1909 and the following four seasons. The plaintiff entered into possession in

January 1909 and again in January 1910. The learned trial judge found that there was uncertainty as to the date from which

the Agreement was to run, whether 1909 or 1910 and as to liability for rates. He purported to follow Harnett v Yielding and

on the basis of that uncertainty dismissed the action without costs. The decision appears at variance with the well established

law that an agreement for a lease is enforceable only if the parties, the property, the length of term, the rent and the date of

commencement are fixed. I do not regard it as correct in law.

The brief head note in Harnett v Yielding reads as follows:-

“Equity will not decree specific execution upon a contract, the terms of which are uncertain as to its extent.

Nor will equity decree specific execution against a party not lawfully competent to execute the contract.

Nor, where it is doubtful whether the party meant to contract to the extent that he is sought to be charged.”

The facts were as follows. The defendant demised lands to the plaintiff’s father for a term of twenty one years. The lease

contained a covenant by the defendant “for and during the term of his life to renew the said lease for the said D.H., his

executor’s administrators and assigns, by giving unto him or them a lease for twenty one years of said demised premises

when applied to by him or them so to do.” The lease contained a break clause which the lessee exercised. The defendant

then agreed with a third party to grant to him a lease of the lands and attended at the lands to accept the surrender of the

original lessee and to give possession to the third party. The third party did not appear and the defendant entered into an

agreement for a fresh lease to the original lessee and an endorsement was made on the original lease as follows:-

“I promise and agree to perfect a fresh lease to Mr Daniel Harnett, at any time he shall demand the same at £5 a year

less than the within mentioned rent.”

The endorsement was duly signed and the lessee continued in possession for a further seventeen years paying the reduced

rent but without having a new lease executed. He assigned the lease to his son, the plaintiff, and when the term granted was

close to expiration the plaintiff applied for renewal which the defendant refused. On behalf of the defendant it was argued:-

1. That the endorsement did not import an agreement for any more than one term of twenty one years.

2. That he was tenant for life with a power to demise for twenty one years only in possession at the best improved rent.

The plaintiff indicated that he would accept a lease for twenty one years commencing on the expiration of the original lease.

The court construed the endorsement and expressed it clear and effectual to grant a term of twenty one years but that it did

not import into the endorsement the provisions of the original lease providing for renewal. Having construed the

endorsement the court refused to grant specific performance of the agreement as that agreement was beyond the powers of

the defendant as a tenant for life and this being known to the plaintiff. The conclusion of the judgment reads as follows:-

“…nothing can be more mischievous than to permit a person who knows that another has only a limited power, to enter

into a contract with that other person, which if executed, would be a fraud on the power; and when that is objected to, to

say ‘I will take the best you can give me’. A Court of Equity ought to say to persons coming before it in such a way ‘make

the best of your case with a jury’.

On the whole, I think, (though I have had considerable doubts) that this Bill ought to be dismissed. If the plaintiff shall

think fit to waive any action at law against the defendant, I will dismiss it without costs; if otherwise, with costs. This is

frequently being done in cases of this kind to put an end to litigation.”

The judgment must be seen in its historical context. Equity did not award damages although in certain circumstances it

would award compensation. A party seeking damages for breach of a contract for the sale of lands had his remedy at

common law or as Redesdale L.C. said “make the best of your case with a jury”. The ruling on costs equally recognise that

an action lay at common law for damages for breach of a contract for the sale of lands where specific performance was

refused. This action predated Lord Cairn’s Act (Chancery Amendment Act 1858) and the Judicature Acts which

empowered courts of chancery to award damages. Specifically Harnett v Yielding is a case involving a concluded subsisting

Agreement where in exercise of its discretion the court refused to order specific performance of the same, such performance

being in excess of the powers of the defendant as a tenant for life but also on the grounds that from the circumstances it was

doubtful whether the defendant meant to contract to the extent that the court found him liable. It recognised the entitlement

of the plaintiff to damages at common law where the court in its discretion refused specific performance: after Lord Cairn’s

Act and the Judicature Act it is not necessary for two separate actions to be brought. It does not support the vendor’s

contention that the court has no power to award damages where it refuses to order specific performance.

2. That the learned trial judge was in error in allowing the plaintiff to adduce evidence of loss of bargain

after the issues had been determined.

In outlining proceedings at the trial I have dealt with the misunderstanding between counsel for the Purchaser and the

learned trial judge as to whether the Purchaser was maintaining a claim for damages in lieu of specific performance should

the learned trial judge in her discretion refuse to grant specific performance. No evidence was led in relation to such

damages. The claim for damages in lieu was not dealt with in the Purchaser’s written submissions in the High Court. The

Vendor submits that once the judgment of the court was given it was not open to the Purchaser to pursue a claim for

damages: reliance was placed on the judgment of the Supreme Court in McMullan v Clancy [2002] I.E.S.C. 45 and In the

Matter of Greendale Developments Limited (in liquidation) [2000] 2 I.R. 514.

It is customary in the indorsement of claim and statement of claim in an action for specific performance, as here, to claim

damages in addition to or in lieu of specific performance but also to claim as a relief if necessary an inquiry as to title and an

inquiry as to damages. It is not necessary to do so. Special damages should be claimed and particularised in the Statement of

Claim. Prior to Lord Cairn’s Act the Court of Chancery in refusing to grant specific performance of a concluded agreement

did so without prejudice to the right of the plaintiff to bring an action at common law for damages. After Lord Cairn’s Act

the Court of Chancery and after the Judicature Act the High Court in refusing specific performance will proceed to consider

the question of damages even where such question is not raised by the pleadings. See Daniell’s Chancery Practice 10th

edition page 1134 and cases there cited. In recent times at least, the common practice for the court in refusing to award

specific performance is to direct an inquiry as to damages: see In the Matter of Greendale Developments Limited (in

liquidation). In this case the learned trial judge found that the Purchaser had not in opening the case waived its claim to

damages in lieu of specific performance. She was entitled to so find and I would not interfere with that finding. Accordingly

on refusing to award a decree of specific performance the learned trial judge was entitled under Rules of the Superior

Courts, Order 36 Rule 38 and well established practice to adjourn the case for further consideration before her. Both

McMullan v Clancy and In the Matter of Greendale Developments Limited (in liquidation) have no application here the

former concerning amendments to an erroneous order and the latter the setting aside by the Supreme Court of an earlier

order. The learned trial judge was clearly entitled to proceed as she did.

3. The learned trial judge assessed damages for loss of bargain as of the date of the judgment. Thus

damages were calculated on the basis of the difference between the value of the lands on that date and

the contract price.

The general common law rule as to damages for breach of contract is that where a party sustains a loss by reason of a

breach of contract, he is, so far as money can do it, to be placed in the same situation, with regard to damages, as if the

contract had been performed. The general rule accordingly was that damages should be assessed as at the date of breach.

Thus in a contract for the sale of generic goods should the seller fail to deliver, the buyer can at once spend his money in

purchasing like goods from another and can recover any increased price as damages. In Wroth v Tyler [1970] 1 Ch. 30 the

court considered the position in relation to contracts for the sale of land. In that case the contract price was £6,000 and the

value of the house at the date of breach was £7,500. By the date of hearing the value of the house was £11,500. Megarry J.

at p.57 in reference to these circumstances said:-

“How, then, it may be asked, would the award today of £1,500 damages place them in the same

situation as if the contract had been performed? The result that would have been produced by

paying £1,500 damages at the date of the breach can today be produced only by paying £5,500

damages, with in each case the return of the deposit. On facts such as these, the general rule of

assessing damages at that the date of the breach seems to defeat the general principle rather than

carry it out.”

He considered the terms of Lord Cairn’s Act section 2 which provides as follows:-

“In all cases in which the Court of Chancery has jurisdiction to entertain an application for an injunction

against a breach of any covenant, contract or agreement, or against the commission or continuance of any

wrongful act, or for the specific performance of any covenant, contract, or agreement, it shall be lawful for the

same court if it shall think fit, to award damages to the party injured either in addition to or in substitution

for such injunction or specific performance, and such damage may be assessed in such manner as the court

shall direct.”

In the course of his judgment at p.58 Megarry J. said:-

“On the wording of the section the power ‘to award damages to the party injured,…in substitution

for such…specific performance’ at least envisages that the damages awarded will in fact constitute

a true substitute for specific performance. Furthermore, the section is speaking of the time when the

court is making its decision to award damages in substitution for specific performance, so that it is

at that moment that the damages must be a substitute. The fact that a different amount of damages

would have been a substitute if the order had been made at the time of the breach must surely be

irrelevant….A choice between the inadequate and the equivalent it seems to me to be no real choice

at all.”

He concluded:-

“In my judgment, therefore, if under Lord Cairn’s Act damages are awarded in substitution for specific

performance, the court has jurisdiction to award such damages as would put the plaintiffs into as good a

position as if the contract had been performed, even if to do so means awarding damages assessed by

reference to a period subsequent to the date of the breach.”

He proceeded to award the plaintiff damages as of the date of hearing.

Wroth v Tyler was followed in this jurisdiction in O’Connor v McCarthy & Ors [1982] I.L.R.M. 201 where however it

was accepted by counsel that damages should be assessed at the date of judgment.

It is submitted on behalf of the Vendor that it is open to the court in awarding damages in lieu of specific performance to fix

a date other than the date of breach or the date of judgment and I accept that this was held by Megarry J. at page 60 and

that that represents the law in this jurisdiction also.

The Vendor relies on Suleman v Savari & Ors [1989] 2 All. E.R. 460. In that case damages were assessed as at the date of

the judgment. While not material it is to be noted that that was a claim against the solicitor for a vendor who signed a

contract without the authority of the vendor and the measure of damages in these circumstances would be the same as in an

action against a vendor. In the course of his judgment Andrew Parke Q.C. summarised his conclusions on the cases as

follows:-

(a) A purchaser who loses his purchase is entitled to damages at common law as well as to damages in lieu of specific

performance under Lord Cairn’s Act.

(b) The usual measure of damages at common law has in the past been the difference between the contract price and the

price at completion plus interest from completion until judgment.

(c) This is not an absolute rule of law, and damages may be assessed by reference to the value at a different date if it would

be more just to do so.

(d) Where, as often in recent years, there have been dramatic changes in property values, it may be more just to assess

damages at a different date.

(e) This is particularly so where the innocent party reasonably continues to try to have the contract completed: in such a

case it is logical and just to assess damages as at the date when (otherwise than by his default) the contract is lost.

On behalf of the Vendor it is argued that in the present case the Vendor comes within paragraph (e) above. At the hearing

on damages it was submitted on behalf of the Vendor that by reason of the delay of the plaintiff in prosecuting the

proceedings that the damages for loss of bargain should be assessed by reference to the market value of the property at a

date earlier than the date of judgment, the 24th July 2004 being suggested, that being the date when the proceedings ought

to have been heard and determined. It was further submitted that the court should take into account the attempts by the

vendor to complete the sale at a reduced price in the autumn of 2003 and the fact that the Vendor sold the property to the

second defendant for £485,000, that is less than the purchase price and the Agreement for Sale with the plaintiff, and as a

result has not been enriched. Neither of these submissions found favour with the learned trial judge. No submission was

made to the learned trial judge on the basis of Suleman v Savari & Ors. Again in this court the Vendor argued that the

present case can be distinguished from Wroth v Tyler. In that case damages were measured on the basis that the plaintiff

should be put in a position to purchase a replacement or alternative property of an equivalent nature: in the present case the

evidence was that the lands represented a once-off or unique site and therefore the approach in Wroth v Tyler was not

appropriate.

The purchaser relies on Wroth v Tyler as authority for the damages being assessed as of the date of the judgment.

I am satisfied that damages were correctly assessed as of the date of the judgment and that Wroth v Tyler represents the

law in this jurisdiction. I am not satisfied that either of the earlier dates suggested by the Vendor are appropriate. The

chronology of the proceedings is as follows:-

Chronology

1. 31st October 2003 theVendor’s solicitor notified Purchaser’s solicitors that the Vendor would rely on the Notice to

Complete.

2. 23rd November 2003 plenary summons issued.

3. 2nd January 2004 the Vendor entered appearance.

4. 19th February 2004 the Purchaser delivered statement of claim.

5. 8th April 2004 the Purchaser issued motion to join second named defendant.

6. 30th April 2004 the purchaser issued motion for judgment in default of defence.

7. 4th May 2004 the Vendor delivered defence.

8. 2nd November 2004 second named defendant joined.

9. 6th December 2004 second named defendant delivered defence.

10. 24th February 2005 the Purchaser served notice of trial.

11. 26th April 2005 hearing commenced.

12. 7th July 2005 judgment delivered on liability issue.

13. 28th November 2005 hearing on damages.

14. 7th October 2005 judgment delivered on damages.

I am not satisfied that this chronology discloses any material delay on the part of the purchaser. I do not see that the resale

at a lower price is relevant. If, as the Vendor argues, the lands are unique then it should be recalled that underlying the

remedy of specific performance in contracts for the sale of lands is the notion that each property is unique. The availability

of similar properties will assist the court in arriving at the measure of damages as the price at which such properties can be

acquired be relevant. Where there are no similar properties available the court must have regard to expert evidence as with

the case here. To apply the test postulated in Suleman v Savari & Ors at (e) above will not avail the Vendor. In that case

damages were assessed at the date at which the plaintiff lost his purchase with interest thereon. The earliest date at which

the purchaser could be said to have lost his purchase in this case is the date of judgment when specific performance was

refused. Even at that date, however, the possibility of being awarded specific performance on appeal remained and that

possibility was only lost when in the period between the hearing in the High Court and the hearing of the appeal the second

named defendant became registered as full owner of the Lands. In these circumstances I am satisfied that in assessing

damages the learned trial judge correctly had regard to the value of the lands at the date of judgment. The Vendor was only

ever willing to complete on its own terms: no satisfactory map was offered and the Vendor was unwilling to mark

boundaries on the ground.

4. That the learned trial judge was in error in the method of assessing valuation.

The Purchaser’s valuer relied on two comparators and placed a valuation on the Lands as of the date of judgment of

€2,000,000. The Vendor’s valuer placed a valuation of €900,000 on the Lands. The learned trial judge held that the

comparator the latter relied on was less relevant. Faced with such a conflict of expert evidence the learned trial judge

discounted the evidence of the Purchaser’s valuer and concluded that the value of the lands at the date of judgment was

€1.4 million. In Wroth v Tyler the valuers on each side did not give evidence but agreed a graph which showed the value of

the premises in question on successive dates and which graph was agreed between counsel. It was submitted on behalf of

the Vendor that a similar exercise ought to have been carried out in the present case looking at the increase in property

values by reference to independent indicators such as the Consumer Price Index, rates of inflation and so forth in the

country generally and in the area in which the Lands are situate and the likely effect of Rural Renewal Tax Incentive. Finally

it is submitted that the dramatic increase in the value of the Lands worked an injustice on the Vendor who no longer owns

the property and did not benefit from the increased and enhanced value.

I am satisfied that the learned trial judge was entitled to adopt the approach which she did. She dealt with the matter on the

basis of the evidence which the parties chose to adduce. She rationalised clearly the basis upon which she assessed the

evidence of the valuers each of whom gave oral evidence and were cross-examined. This court should not interfere with her

finding.

Where specific performance is refused and damages for loss of bargain awarded in lieu the difference in value as of the date

of judgment and the date of contract as the measure of loss requires adjustment to arrive at the correct measure of damages.

The object of an award of damages is to give the claimant compensation for the damage, loss or injury he has suffered. The

question to be asked is what if the plaintiff lost and not what the defendant ought fairly and reasonably to pay: General Tire

and Rubber Company v Firestone Tyre and Rubber Company [1975] 1 W.L.R. 819. In In re Daniell [1917] 2 Ch. 405 it

was held that a Purchaser awarded damages in lieu of specific performance cannot claim his conveyancing costs as these

would have been incurred if the contract had been completed: no such claim as made here. From this, however, it logically

follows that the Vendor could claim to deduct from the damages costs, expenses and stamp duty which the Purchaser would

have paid had the transaction been completed: see Court of Appeal in Ridley v Geerts [1945] 2 All E.R. 654. Applying these

principles to the present case has the following effects:-

1. The transaction had proceeded to the point of completion and the Purchaser has incurred liability for his solicitors’ fees.

Accordingly it differs from a case where a contract having been entered into the Vendor takes no steps to complete and

accordingly no conveyancing fees or minimal conveyancing fees are incurred by the Purchaser. In these circumstances the

Vendor is not entitled to a deduction in respect of solicitors fees.

2. Had specific performance been ordered the Purchaser would have incurred stamp duty on the consideration passing. As

the transaction did not proceed to completion he is saved this expense. It is accordingly appropriate that the Vendor should

receive credit against the difference in value at the date of contract and the date of judgment for the amount of the same.

3. Had the purchase been completed the Purchaser, if in funds, would have been at the loss of the balance of the purchase

price from the contractual date of completion up to the date at which damages are assessed. If not in funds he would have

incurred borrowing costs. While it is clear from the evidence that the Purchaser proposed to borrow this is the extent of the

information available. To reflect loss of use of funds or borrowing costs which would have been incurred by the Purchaser it

is appropriate that a deduction be made from the difference in value at the contract date and date of judgment. In the

absence of evidence this allowance should be the amount calculated at Courts Act rate on the balance of the purchase price

from the completion date to the date of judgment that is on the sum of €468,000 from the 21st May 2003 to the 7th July

2005. In the Matter of Fuller and Company Limited (in liquidation) [1982] I.R. 161 the vendor claimed a similar

deduction and was unsuccessful. That case concerned urban property and the ratio for the refusal is that had the contract

been completed by the vendor the purchaser would have had the rents and profits of the lands: in this case the court is

concerned with development lands and no claim was advanced by the Purchaser that he was at the loss of rents and profits.

It will be possible for the parties to compute and agree the sum which would have been payable by the Purchaser for stamp

duty and the amount of interest calculated at Courts Act rate on the balance of the purchase money for the period which I

mention.

Conclusion

For the reasons set out above I would dismiss the appeal and affirm the order of the High Court save and except that the

award of damages would be adjusted as hereinbefore indicated by the deduction of the amount of stamp duty which would

have been incurred by the Purchaser and a sum equal to interest at Courts Act rate on the balance of the purchase price

from the 21st May 2003 to the 7th July 2005.