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Cite as: [2002] IEHC 171
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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Higgins v. Argent Developments [2002] IEHC 171 (1 February 2002) URL: http://www.bailii.org/ie/cases/IEHC/2002/171.html Cite as: [2002] IEHC 171 |
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RECORD NO. 1998 NO. 13446P
BETWEEN
PLAINTIFF
DEFENDANT
Judgment of Mr. Justice O'SuIlivan delivered the 1st of February 2002.
The plaintiff seeks specific performance of an agreement made on the 24th September, 1998 whereby he agreed to buy certain identified lands at Clonmel for £380,000 with a closing date of the 2nd of October, 1998 and with a booking deposit of £10,000. The plaintiff reached the said agreement personally with one Robert T. Nugent, auctioneer, as agent, he says, of the defendant.
Subject to an agency point there is no dispute that a concluded agreement was reached on the above terms but several points are made with regard to the sufficiency of a memorandum in writing prepared at the direction of Robert Nugent and signed by both parties on the 24th September, 1998.
BACKGROUND
Some background information is relevant. One John Butler who is the individual who personally gave instructions to Robert Nugent, was the owner of ninety nine of one hundred £1 shares issued in the defendant, the registered owner of the remaining share being his sister Josephine Butler who was also company secretary. John Butler bought the lands (comprising some 10.7 acres) which surrounded the plaintiffs residence at Davis Road, Clonmel in 1996. The defendant was incorporated the year before this transaction, the lands being taken in the name of the defendant company. Both the plaintiff and John Butler were interested in land development among other things and both can be regarded as experienced businessmen. The plaintiff was concerned about the development proposals of the defendant when it applied for planning permission for housing development on the lands and had a number of discussions in relation to this with John Butler. These resulted in an oral agreement whereby part of the site would be sold to the plaintiff but nothing came of these discussions because, the plaintiff says, the defendant failed to send on a contract.
On the 24th of September, 1998 the plaintiff was in Dublin on business and got a telephone call from Robert Nugent the auctioneer. I will go into what was said in more detail later; suffice to say at this point that Mr. Nugent indicated to the plaintiff that he had instructions from John Butler to sell these lands, and some others in Clonmel, and he wanted to know whether the plaintiff was interested. Negotiations followed and the agreement already referred to was reached on the telephone and it was then arranged that the plaintiff would call into Mr. Nugent's office in Clonmel at about 6.30 p.m. to sign the agreement and pay a booking deposit of £10,000.
This happened in due course and the plaintiff was given an original copy of this agreement. Both parties had the same Solicitors at the time, namely Messrs. Kieran T. Flynn and Co. of Tipperary. Mr. Flynn agreed to act for both parties provided there was no disagreement but insisted that if there were then he would act for neither. Mr. Nugent contacted Mr. Flynn on the 25th of September and furnished him with a copy of the agreement (or memorandum of agreement - there is an issue on this) but with the closing date now altered from the 2nd to the 26th of October, 1998. Mr. Flynn sent out a standard form Law Society contract on the 28th September, 1998 with a closing date of the 22nd October, 1998 and it is clear from a discovered note of his attendance on John Butler that the latter expressed the hope that the sale might be completed on the 22nd of October rather than the 26th of October which was a Monday. The solicitors wrote to Mr. Nugent's firm on the 12th October, 1998 making the point that the ownership of the land is vested in the company as distinct from John Butler, that there cannot be any binding agreement with the company unless and until the latter holds a meeting and passes a resolution that such a meeting would be convened and he would be informed of the outcome. This letter stated "you may wish to inform Mr. Higgins of the position as set out above".
The plaintiff was duly informed of this situation but not until ten days later namely on the 22nd of October, coincidentally the closing date on the contract which had been sent out by Mr. Flynn on the 28th of September. On the 21st October, 1998 the plaintiff wrote to his solicitors Kieran T. Flynn and Co. replying to their letter of 28th September (enclosing the contract) referring to an archaeological problem which had been more serious than envisaged but professional advice had indicated that these difficulties could be overcome and he indicated that he would be in a position therefore to return the contract signed with deposit very shortly. In fact the letter under reply had enclosed a standard form contract with a closing date for the 22nd of October, the next day. On the 22nd of October (the closing date) Messrs. Flynn wrote to the plaintiff enclosing a copy of their letter of the 12th instant to the auctioneer (dealing with the ownership and company resolution). On the 28th of October they acknowledged receipt of the contract together with a cheque for £28,000 (being the balance of the contractual deposit of 10%). They told him that they would advise the defendant of receipt of same and would hold the cheque.
On the 5th of November the plaintiff wrote to his own solicitors wondering whether the vendors intended to close the sale and on the 10th of November his solicitors write to advise that they have heard from the defendant to the effect that the board has resolved not to enter into a contract with him and directing the return of any deposit that he may have received. They returned the cheque for £28,000 with that letter. The plaintiff initially asked for a return of his booking deposit of £10,000 from Mr. Nugent but quickly corrected this (clearly on advice of his new and present solicitors) and indicated that he was going to call for the immediate closure of the sale as per contract. These proceedings were commenced on the 18th of December of the same year.
THE DISCOVERED ATTENDANCES
Before considering the evidence I will at this point set out in summary form the relevant contents of a number of attendances by the parties' common solicitors, Messrs. Kieran T. Flynn and Co. of Tipperary on John Butler and his sister in the days immediately following the making of the agreement on the 24th September. Whilst these attendances were discovered late in the day (following argument relating to relevance and privilege between the parties) they form a contemporaneous record of the attitude of the defendant in particular at a highly material time and have been admitted in evidence by consent.
On the 28th September, 1998 Mr. Raymond Flynn attended on John Butler. The latter indicated he was hoping if at all possible that the sale might be completed on the 22nd of October rather than the 26th which was a Monday. There was discussion about way-leaves and planning permission and Mr.Flynn emphasised that the sale was not subject to planning. He said he believed the purchaser was aware of an existing convenant regarding building on the land and that he, Mr. Higgins, had indicated he was satisfied it could be circumvented. Just after the consultation he was telephoned by Josephine Butler, querying the "rumour" that the property had been sold to the plaintiff. She indicated that she would have to have an input into any sale since she was a director of the company which held the land. She indicated that she might not be speaking to John Butler within the next few days. Mr. Flynn mentioned that properly speaking a resolution was required from the company but did not mention to her that the document of the 24th of September on the auctioneer's note paper, addressed to the plaintiff apparently committed John Butler to a sale, but did not mention the defendant, the correct owner.
A memorandum of the same date records the fact that both John and Josephine Butler are directors of the defendant company, John holding ninety nine of the hundred issued shares and Josephine the other one share. The memorandum records that apparently Josephine Butler is opposed to the proposed sale. It goes on to say 'It has been suggested that she be removed as a Director". It then indicates a legal mechanism whereby this can be achieved. It is a reasonable inference that the solicitor's instructions from John Butler were to proceed with the sale and if necessary to remove Josephine Butler from the company. This inference was explicitly drawn in court by counsel for the plaintiff and not rebutted: the defendant did not call evidence in this case.
A later attendance dated the 30th of September is on John Butler, Michael Butler (his brother) and Josephine Butler. This now records that in the previous discussion with John Butler it was evident that he obviously knew nothing of the negative attitude of Josephine Butler towards the sale. Furthermore he was quite annoyed at the negative attitude towards the sale, and the solicitors understood that he was moving towards having her removed as a director of the company. It seemed that Josephine was being encouraged in this attitude by her brother Michael Butler.
At the meeting on September the 30th however it seemed to the solicitor that John Butler now seemed to be "joining forces with Michael Butler and Josephine Butler with a view to nullifying the sale". Advice was given (but not disclosed) regarding how far the memorandum of the 24th of September would be binding but it is recorded that John Butler was disappointed with that advice and that he now wanted to get out of the transaction. He apparently believed there were other interested parties who would have paid more for the property and there is some discussion about this. There was some further discussion about John Higgins querying the authority of the auctioneer to sign on his behalf. A further attendance on John Butler dated the 8th October, 1998 records John Butler as saying that he had been offered £500,000 for all the lands excluding the covenant (which he feels can be set aside) and reference is made to a further offer of £400,000 from one Michael Reilly.
On the 9th of October there is an attendance on John Butler who is critical of the letter prepared by the auctioneer on the 24th of September against the background of a higher offer from Michael Reilly. Reference is made to a further offer of £1.25 million but subject to planning permission. Advice was given that the company would have to make up its mind one way or the other and on the 12th of October, 1998 there is an attendance on Josephine Butler who approved the letter sent on that date (dealing with a resolution of the company) once she was satisfied that such letter did not commit the company to any particular outcome of its resolution.
As I indicated John Butler did not give evidence. It is clear that following the agreement of the 24th of September he wished to proceed with the sale and at one point was considering removing his sister if she objected. However, he was persuaded by his sister and brother to change his mind and again it is clear that the context was that he thought that he could get more money from other purchasers.
THE 24TH OF SEPTEMBER. 1998
As already stated the agreement was reached on this day. The dealings between the plaintiff and Robert Nugent culminated in the signing by these parties of a letter prepared by the latter and since the issues arising relate to this letter I will now set out the text in full.
It is on the headed note paper of Stokes and Quirke, the auctioneering firm of Robert Nugent. At the head is the date 24th September, 1998 and it is in the form of a letter addressed to Mr. John Higgins, Davis Road, Clonmel. The heading in manuscript which the evidence shows was present when the letter was signed by both parties is "re lands at Davis Road. Clonmel. circa 10.7 acres". The text of the letter is as follows:
"Dear Mr. Higgins,
We, as agents, for the vendor, Mr. John Butler hereby agree the sale of the above lands to John Higgins subject to the following conditions:-
(1) Sale price £380,000.
(2) Good marketable title.
(3) Deposit £10,000.
(4) Closing date 2nd October, 1998.
We also hereby acknowledge receipt as at No. (3) above".
It was signed by Robert T. Nugent on behalf of the vendor and by John Higgins on his own behalf. Under that was a P.S. as follows:-
"P.S. We will furnish any documents required by the purchaser."
Submissions
A number of points are made in relation to this by the defendants as follows:
1. The vendor is not Mr. John Butler as stated but rather the defendant company. Robert Nugent was not acting as agent for the company and had no authority from it.
2. As the evidence shows the lands were subject to a restrictive covenant relating to building and an archaeological problem. This was known and agreed. The reference to "good marketable title" is therefore inaccurate.
3. The plaintiff agreed to pay a 10% deposit which was £3 8,000. The reference to a deposit at £10,000 is, again, inaccurate.
4. In relation to the closing date, namely the 2nd October, 1998 on the version of this letter which was given to the plaintiff (Mr. Nugent subsequently altering the closing date to the 26th of October without consultation with the plaintiff but with the approval of the defendant), time was of the essence as the evidence shows and therefore once time had gone by there was no contract. For his part the plaintiff through his counsel resists all the foregoing and also insists that the letter of the 24th September, 1998 is itself the agreement as distinct from being a note or memorandum thereof. The language used ("we... hereby agree") is the language appropriate to the creation of an agreement. Accordingly it is complete of itself and deals with all the essential terms, the other matters being collateral.
The Evidence
The plaintiff said that he received a phone call from Mr. Bobby Nugent on the afternoon of the 24th September, 1998 when he was in Dublin on business. Mr. Nugent told him that he had instructions from John Butler to dispose of these lands and wanted to know would he be interested. He said he possibly would but he made it very definite throughout that he did not believe or trust that any agreement he might make on the phone would be honoured. This was from previous experience. If he did make an offer and a price was struck "it would have to be binding". He was told that Mr. Butler was looking for £400,000 and he offered £300,000. He was persuaded to increase that to £350,000 for a definite deal and Mr. Nugent said he would telephone Mr. Butler whom he told him was at the other end of a telephone in his office. Mr. Nugent got back shortly, maybe twenty minutes later, and said the offer of £350,000 was not adequate. John Higgins suggested splitting the difference and was told he would be getting nearer the mark. Mr. Nugent again broke off to consult with his client and came back again after ten to twenty minutes. He said that if he would top it up with £5,000 making a total price of £380,000, he had authority to conclude a deal. John Higgins agreed strictly on the condition that that was the limit of the offer and that it was for a contract that was final. Mr. Nugent confirmed that he had definite instructions to dispose of the lands that Mr. Butler was happy with the price and they then made arrangements for signing the letter later that evening.
John Higgins arrived later that evening and he met Mr. Nugent and his partner in the firm. Mr. Nugent came back with the letter, requested a cheque, John Higgins signed and Mr. Nugent signed and gave him the original. The manuscript legend appearing on it was present when he signed and John Higgins said he was happy with it as it contained the price which was the main fact as far as he was concerned. He assumed it was a binding agreement, and it was not subject to contract or anything which he would not have been prepared to accept. He was conscious of the closing date but accepted it. As far as he was concerned that was a matter for the auctioneer or the vendor's solicitors. He was prepared to close whenever called on to do so.
Under cross-examination he accepted that Robert Nugent was dealing on behalf of John Butler and it was put to him that he was informed that the closing date was critically important. He said "no" and repeated this and said that it was not at all correct that he was told that if he did not close on that date the whole deal could unravel. He insisted that that was not correct. He agreed that a closing date less than 10 days after the deal was tight but said "you see, the closing date was not of my making at any point". He accepted that the closing date or various things like that remained to be agreed between the solicitors and said "any closing date I would have been called to honour. I would honour. I was in a position to honour".
He agreed that what was discussed was a 10% deposit with a booking deposit of £10,000. He also agreed that the balance of the deposit was to be paid on the signing of the contract and that the solicitors would prepare a contract. When it was put to him that he was informed that it was John Butler who was the vendor, he said "yes, John Butler was referred to and Argent Developments was referred to and I wasn't really making the distinction between the two". He had been told that Mr. Nugent had instructions from John
Butler to dispose of these lands rather than, explicitly, that John Butler was his client. He accepted that Mr. Nugent was acting for John Butler.
There was not really much discussion between him and the auctioneer as to title, he was aware that there was a restrictive covenant but he could not be sure that it was discussed. There was no discussion in relation to a national monument. There was no discussion in relation to way-leaves over the land. He accepted that these would all affect good marketable title. The arrangement regarding the deposit was that he was to pay Mr. Nugent £10,000 and the balance of the 10% deposit would be paid on receipt of the contracts from his solicitor.
It was put to him that his own letter to Mr. Flynn of the 21 st of October indicated that he himself had some reservations about the archaeological monument on the lands and that he was taking the lands subject to this. He disagreed that he was wondering whether he would go ahead because of this and responded to that suggestion by saying 'fro. I was not considering that because, as far as I was aware, at that stage. I would have no alternative but to honour the contract, or the memorandum". He accepted that the date (2nd of October) was critical but insisted that the change from that date was not of his making. He said he assumed the agreement was binding once it did not contain the phrase "subject to contract".
The only other witness in the case was Robert Nugent the auctioneer. He said he had acted for the Butlers before this occasion and was involved in advising how to develop these lands. John Butler came in to him early on the afternoon of the 24th of September and appeared to be under a lot of pressure and his wish was to sell the lands and possibly other lands as well. He was asked to get it moving as quickly as possible. As soon as he heard this the plaintiff's name sprung to mind because he had tried to negotiate with him on several occasions before. He therefore rang his orifice with Mr. Butler's agreement. Mr. Butler's instructions were to conclude a binding agreement for the sale of these lands as quickly as possible. His recollection was that Mr. Butler was present with him in the earlier part of his telephone negotiation with John Higgins when the latter offered £300,000. Mr. Butler then excused himself and went across the road to a hotel, the Clonmel Arms and Robert Nugent would have walked across to him as the negotiations progressed.
He would have said to the plaintiff something like "it has to happen quickly or it won't happen at all." When John Higgins offered £350,000 he said he would have conveyed that to John Butler and told him that he thought he could get more. John Butler was a bit concerned that he might lose John Higgins if he pushed it but he felt fairly confident that he could get more money. His next conversation with John Butler was that he had got £380.000 "and the relief on John Butler at that time, it was quite incredible". He said he discussed with John Higgins the restrictive covenant, the archaeology (briefly) and he would have been told by John Higgins that he was aware of it. When he created the document of the 24th of September his intention was to write a letter on behalf of Mr. Butler as strong as he could write it. He instructed that the date be changed (from the 2nd of October to the 26th) on the copy which he sent to Kieran T. Flynn Solicitors.
I note in passing that the plaintiff became aware of the altered closing date on the Law Society's contractual form when he received this from his solicitor under cover of a letter dated the 28th of September. The first time that the change in the closing date on the letter of the 24th of September became known to the plaintiff and his legal advisors was in court on the 1st day of the hearing when the solicitor's copy of this letter was discovered. The pleadings rely on the 2nd of October as the closing date and the evidence is that this was the closing date on the letter when the plaintiff signed it and that this date was changed by Robert Nugent after the plaintiff had signed it and without the plaintiff being aware of this change. When this document came to hand, the plaintiffs counsel discussed it with Mr. Nugent, his witness, who then recalled that he had in fact made the alteration. In evidence Robert Nugent says that he changed the closing date because in his opinion "it wasn't physically possible to close a sale in ten davs. It was a typographical error, as far as I was concerned. John Butler would have been aware that I changed the date to make it a month". He instructed the change, he did not personally make it himself. He did have John Butler's agreement to change this date. He said that John Higgins attitude to having concluded a deal was the same as that of John Butler namely he wanted to have a deal. "He wanted to have it done and dusted. He didn't want any messing."
Under cross-examination he denied that Michael Reilly had made a firm offer of £400,000 for the land. He said that John Higgins had signed the memorandum prepared to accept the closing date on the 2nd of October. Then it was put to him that in regard to the closing date he had said "this has to happen, the closing has to happen. If it doesn't happen, it won't happen at all". He said that that was correct. He acknowledged that at some stage in his conversation with John Higgins it was agreed that he would take the property "warts and all". This was a reference to the archaeological problem, the restrictive covenant and other terms and conditions. He agreed that they were essential terms but added "... covered under good marketable title". He agreed that John Butler had to get the money fast and accepted that time was critical, and of the essence and that the closing date was vital and central to the contract. That date was the 2nd of October.
In fact the deal was not closed on the 2nd or on the 22nd. On re-examination he said that his view of the 2nd of October was that it was impossible. He therefore changed the date to the 26th. Mr. Butler was aware and approved this. The 2nd of October was a typographical error and he realised when he read it properly that that was a wrong date. In his discussions with Mr. Butler he would have anticipated a one month closing or thereabouts. To myself, he said that his discussions with the plaintiff would have been on a one month's closing date basis. His reference to "this has to happen", and "if it doesn't happen it won't happen at all" referred to the closing of the deal a month after the 24th of September.
WHAT WAS AGREED?
Quite clearly the price was agreed. This was the most crucial aspect so far as the plaintiff was concerned. He also wanted a binding agreement and both himself (he was happy once the letter of the 24th of September did not contain "subject to contract" or anything like that) and Robert Nugent intended to make the letter of the 24th of September as binding as Mr. Nugent could make it.
The evidence in relation to a closing date is confused. It is clear that John Higgins would have accepted any closing date and was ready to pay the agreed price whenever he was asked. There is no challenge to this evidence. His evidence is that he accepted the 2nd of October as being a tight closing date but that was a matter for the vendor and his agent.
Robert Nugent's evidence is self-contradictory on this point. He changed the date on the letter from the 2nd to 22nd of October after the plaintiff had signed the letter without the plaintiff knowing it but with the agreement of John Butler. That was his evidence in chief. Under cross-examination he said that the plaintiff was prepared to accept the closing date on the memorandum as the 2nd of October and that he signed it knowing it was the 2nd. He agreed that he said "if it doesn't happen, it won't happen at all". In regard to that, time was critical and of the essence. On re-examination, however, he said that the date the 2nd of October was a typographical error and that once he read the letter properly afterwards he realised that that was the wrong date. He checked the alteration (to the 26th of October) with John Butler but not with John Higgins. To me he said that when he was referring to "this has to happen: if doesn't happen it won't happen at all" he was referring to closing within the month and the closing date he was discussing (with the plaintiff) was the 26th of October.
I have the distinct impression that Robert Nugent was confused. I think he was attempting to answer the questions as best he could but it is clear from the foregoing summary of his evidence that he contradicted himself and on this point I prefer the evidence of the plaintiff to the effect that the closing date was agreed to be the 2nd of October, 1998.
It does appear that Robert Nugent used a phrase such as "if this doesn't happen, it won't happen at all" but it is not clear whether this was in relation to the making of agreement on the 24th of September (as suggested by Mr. Gordan on behalf of the plaintiff) or in relation to one or other of the two closing dates referred to in his evidence. It is on the basis of this phrase, primarily, that Mr. Brady S.C. suggests that time was of the essence in this contract. Against this submission is the evidence of Robert Nugent to the effect that when he carefully read the letter of the 24th afterwards he realised that this date (2nd October) was wrong, was a typographical error and he changed it off his own bat with the authority (given either before or after the change) of John Butler but without referring back to the plaintiff. This is entirely inconsistent with an agreement which would have made time of the essence as understood by lawyers. Furthermore there is nothing in the attendances of the Solicitor acting for both parties at the time which even hints at the notion that time was of the essence (as understood by lawyers) and indeed the contents of one attendance indicates that John Butler's attitude was that he would prefer to have the closing date on the 22nd rather than the 26th of October which was a Monday. From the side of the plaintiff, on this aspect of the agreement, it is perfectly clear that he was prepared to close on any date that the vendor could deliver. It is fully acknowledged that he was a man of means and would have been able to pay the purchase price at very short notice.
I hold that it was not agreed between the plaintiff and Robert Nugent that time was of the essence. Clearly Mr. Higgins wanted a binding agreement and Mr. Butler wanted his money as quickly as possible. The matter was urgent, important and in this sense critical. It was not of the essence, as known to lawyers, however, in the sense that if the day agreed passed the whole deal was off. Mr. Nugent clearly did not take this view of what he had just agreed when he unilaterally altered the date of the agreement.
AUTHORITY TO AGREE
Clearly Robert Nugent was acting, as the letter of the 24th of September says, as agent for Mr. John Butler. The question is did he have authority, actual or ostensible, from the defendant? Clearly John Butler was giving Robert Nugent instructions. Who else could give instructions to Mr. Nugent on behalf of the company other than John Butler? In my opinion Robert Nugent had the actual authority to act as agent on behalf of the defendant Company. I note in this context the observations of Me William J. at page 10 of the unreported judgment delivered the 5th of May, 1978 inHowiin v. Thomas F Power (Dublin) Limited and also of Costello J. (as he then was) in Guardian Builders Limited v. Kelly and Anor. (19811.L.R.M. 127 at p. 131-132). All that is required is that the vendor can be readily identifiable from the written document. The plaintiff was able to achieve this task with minimum endeavour.
MEMORANDUM OR AGREEMENT?
Mr. Gordan S.C. for the plaintiff submits that the letter of the 24th of September is itself the agreement. Mr. Brady S.C. says that this cannot be the case because the solicitor subsequently sent out a Law Society contract and in any event the deal was done on the telephone not through the medium of the letter. The letter is a memorandum and not the agreement itself. Moreover, if this is the agreement the terms are not those agreed on the telephone.
The plaintiff and John Butler were experienced businessmen. They were both interested in development. They were both familiar with the lands and they had both had dealings with each other already over these lands. I accept the evidence of Robert Nugent that John Butler wanted a deal done as quickly as possible. Clearly he needed money or at least an agreement that would be binding as soon as possible. John Higgins was less concerned with speed.as with certainty. He wanted something binding. His offer which was accepted was made on the basis that it was his final offer, that he would get a binding agreement and that there would be no messing. This was based on his earlier experience.
There is much in Mr. Gordan's argument to the effect that the letter of the 24th of September, 1998 is itself the agreement. The evidence of Robert Nugent is that he wanted to make it as binding as he could. It is clear that John Higgins was prepared to accept the property "warts and all" meaning subject to the archaeological problem, the way-leave problem and the restrictive covenant. He was not concerned with these relative niceties; he felt that he could overcome some of them. He wanted the land to protect his own residence. For him the essentials of the deal were the identity of the lands and the price. For John Butler the essentials were the price and getting a deal done as quickly as possible. Both achieved their objective in the letter of the 24th of September 1998. Everything else was subsidiary and whilst I have some doubt about it I accept Mr.Gordan's proposition that it is this letter which is the agreement between the parties.
Mr. Brady S.C. in response to a question from me indicated that it is possible to have an agreement (as distinct from a memorandum thereof) as contemplated by s. 2 of the Statute of Frauds 1695 without any prior verbal communication between the parties. He instanced an agreement which came into being through correspondence. I accept his point but I do not think that this is the only example of an agreement as distinct from a memorandum thereof within the contemplation of the Statute of Frauds. Clearly John Higgins wanted a binding agreement and equally clearly he did not get that until he saw a letter which did not contain the phrase "subject to contract" which he signed. It was then and only then that he got his agreement when he paid his booking deposit. The relief which John Butler had earlier experienced was in anticipation of a deal being done that evening.
A further point is made, however, that the letter of the 24th of September 1998 is wrong because it records the title as "good marketable title" when in fact that was not ever agreed and furthermore it records the deposit as £10,000 when in fact it was 10% (£38,000).
With regard to the good marketable title point my view of the evidence is that the two individuals who reached the agreement were not using this phrase as lawyers would use it but rather, as Robert Nugent said in the evidence, as a phrase to cover the title which included the restrictive covenant and so on. In my view one must construe the agreement from the point of view of those reaching it and on the evidence those making the agreement meant no more than that the vendor would be able to make title to the property.
With regard to the point in relation to the deposit it is clear that the letter of the 24th of September is referring to a booking deposit which is formally receipted immediately before Robert Nugent's signature. The existence of or amount of a deposit was not, on my view of the evidence, an essential term of the agreement. This is more readily understandable in the context of a very short closing date. The only essential term was that the agreement be binding. [satisfy the statute], what is material or essential must be considered, at any rate primarily, from the point of view of the parties themselves".
Furthermore it seems to me that if, contrary to the above conclusion, this phrase is properly construed to mean that the purchaser was entitled to and agreed to take from the vendor (who also agreed to give) the lands free from any archeological impediment, restrictive covenant or way-leave, then this is a term exclusively for the benefit of the purchaser and he is entitled to waive it, as he does, and get his specific performance of the less advantageous title.
In this context Mr. Brady S.C. submitted that the authorities only showed that where there was no reference in the memorandum to the relevant term, then the plaintiff can waive it but he submitted that there is no case to the effect that were there is a mistake in a reference in the memorandum the Plaintiff can waive the excess of advantage, so to speak, by reason of the mistake. Not only does this seem contrary to principle, but in fact in the present instance the question of title one way or another was not an essential term at all. The plaintiff was clearly prepared to take the property as it was ("warts and all") and the primary meaning as understood by the two parties negotiating of the phrase "good marketable title " was that the land was to be marketable. If this phrase is to be construed as meaning what lawyers intend it to mean then it refers to something quite different to what was discussed and agreed and that something different is for the exclusive benefit of the plaintiff and the plaintiff is entitled to waive it. He still is entitled to have the property conveyed to him on the basis agreed and in doing this he is waiving absolutely the advantage conferred upon him at Item (2) of the letter of the 24th of September, 1998. Seen in this way, in my opinion, the authorities on waiver apply and can be availed of and are availed of by the plaintiff in this case.
Not quite the same considerations apply to the reference to the deposit. In my view this reference is simply to the booking deposit which is receipted. It is not a reference at all to the contractual deposit of 10% of the purchase price which was to be paid on signing the written contract. If the letter of the 24th of September is to be regarded as a memorandum of the agreement rather than the agreement itself then it is relevant that the parties did not consider that a deposit was essential at all: rather in relation to the deposit what was agreed was that there should be a booking deposit of £10,000 paid on the 24th of September and this is what the memorandum records.
In this context I am, of course, aware of the decision of Finlay C.J. in Boyle v. Lee [1992] 11. R. 555 . I fully accept what he said at page 571 as follows;-
"The amount of a deposit to be made, even if a purchaser is willing to make a deposit of the appropriate amount or the usual amount then experienced in transactions in Dublin, is too important apart of a contract for the sale of land in the large sum of £90,000 to be omitted from a concluded and complete oral agreement unless the parties in such an agreement had agreed that no deposit would be paid. In this case the evidence irresistibly leads to the conclusion that both the first Plaintiff and Mr. McManus agreed that there had to be a deposit, but left it over to be agreed between the solicitors when the formal contract was being settled as to its amount and form. In my view, that evidence, which was not in contest, must lead to a conclusion that there was not a complete contract...."
As has been pointed out by Geoghegan J. in Shirley Engineering Limited and Irish Telecommunications Investment Pic, unreported, High Court, 2nd December, 1999, and also by the same judge in Supermacs Ireland Limited and Anor v. Katesan (Naas) Limited andAnor [2000] 41. R. 273 Finlay C.J. in Boyle v. Lee was dealing with the issue whether there had been a concluded agreement or not. The paragraph cited has no bearing on what should be contained in a memorandum of a concluded agreement to satisfy the statute. For the latter purpose the material or essential terms only are required.
It seems to be perfectly competent for the parties to agree in relation to a deposit either that there need not be one or that once there is payment of a booking deposit that the payment of the balance of the agreed deposit is something that would happen in ordinary course. That is exactly the position that applies here. The parties wanted a binding agreement, a document that did not contain the phrase "subject to title" : once they had that the other elements of the deal (apart from price and identity of the lands) were not essential terms and as such did not require to be contained in the memorandum.
The fact that the letter of the 24th September, 1999 makes reference to the booking deposit is entirely consistent with this approach. So also, in my view, is the fact that there is no reference to the 10% deposit because this was not a term that was vital or critical to the parties. Time was, and time is referred to. (But time was not of the essence as lawyers would understand it.) The identity of the land was and that is referred to. The price was and that is referred to. These were businessmen familiar with the subject on which they were negotiating and who knew what were the crucial elements of the deal were - what were, to use the phrase "deal breakers" or "deal makers". The amount or existence of the agreed deposit was not in that category. As I understand the authorities on this point, the memorandum in these circumstances, if such be the letter of the 24th of September, is sufficient to satisfy the statute.
Finally there is the question of the closing date. The agreement specifies the 2nd of October. Such an early date was not a matter of concern to the purchaser. He would have closed on any date called upon to do so. The time agreed, I have already held, was not of the essence. The defendant through his agent adopted and ratified a later closing date. He then failed to meet it. The vendor was ready and willing to complete at all material times and this has not been questioned by the defendant.
Accordingly even if I am incorrect in holding that the letter of the 24th of September, 1998 is itself the agreement which the plaintiff is entitled to have specifically performed by the defendant, I hold that this letter contains the essential terms which were agreed upon namely the identity of the land, the amount of the price and an early closing date (subsequently and unilaterally waived by the defendant). It was also essential to the parties that this written document should be binding and in this regard it was crucial that it did not contain the phrase "subject to contract". The letter of 24th September correctly records all of these essential terms and is a good memorandum.
Accordingly the plaintiff is entitled to a decree of specific performance as claimed.