LEGAL ARTICLES BY MARK TIERNAN SOLICITOR RELATING TO PROPERTY MATTERS.

Article by Mark Tiernan Solicitor on a recent decision relating to Specific Performance in Property transactions.

The first case I will deal with is the December 2008 case of Kelly v Simpson. Mr. Simpson signed a contract to purchase a property for €1.5m.  While Mr. Simpson did not pay a deposit he did sign the contract. The high price reflected the planning potential of the property/site but it became apparent that the supposed potential was not going to be realised culminating in Mr. Simpson refusing to complete the purchase. Mr. Kelly then sued Mr. Simpson for specific performance of the contract.

The Judge effectively stated that on the face of it he would have been prepared to rule that an enforceable contract was in situ thus giving Mr Kelly the right to demand specific performance of the contract.

However interestingly the Judge went on to say that the remedy of specific performance is an equitable remedy and in this case he felt it necessary to look behind the legal form of the transaction. When he did so he found that the price of €1.5m was an inflated price stemming from representations made which were designed to undermine the planning code and the entitlement of the local planning authority to properly control planning in the area.

The Court ruled that it would not grant an order requiring the defendant to take the property at a price that was only achievable due to the contravention of a planning code.

To conclude therefore while Specific Performance is a powerful remedy it is an equitable  remedy. The contract that is sought to be enforced by the remedy must be legal in itself and not be a vehicle for undermining any laws.

Should you have any queries on Property/Conveyancing matters please contact Mark Tiernan Solicitor on 01 6622822.

Back to News Overview