High Court: Woman awarded damages in ‘shambolic’ claim in lieu of specific performance



High Court
High Court

A woman who brought a claim against a builder who refused to complete a contract for the sale of land which she had already started to build on has been awarded over €77,000 in damages.

Criticising the submission of fake documents in support of the claim, Mr Justice Senan Allen said the preparation of the case was “shambolic” and reduced the award of costs to reflect this.

Background

In 2015, Noel Thomas Richard Heatley bought a residential development site in Wicklow. He planned to build a number of houses and sell six serviced sites.

Mary Egan and Paul Barron (the plaintiffs) agreed orally to buy a site from Mr Heatley for €85,000, and with a letter of consent from Mr Heatley they applied for planning permission. By October 2016, the plaintiffs had been granted planning permission for the site. They sold their house and lined up a builder, Ciaran Rodgers, who began working on the house at the beginning of November 2016.

Dispute over insurance

Prior to working on the house, Mr Heatley had advised the plaintiffs that they should take out a self-build insurance policy or use an insured contractor. Mr Barron, an architect, had worked with Mr Rodgers before and believed that he had insurance – and advised Mr Heatley of the same.

By the start of December 2016, Mr Rodgers had still not produced a copy of his insurance policy. Mr Heatley saw some of Mr Rodgers’ workers going onto the site without personal protection equipment, causing Mr Heatley to tell Mr Barron that he wanted Mr Rodgers off the site. Thereafter Mr Heatley and Mr Barron had an argument which Mr Heatley claimed amounted to an assault.

On 15 December 2016, the plaintiffs had a meeting with Mr Heatley and his solicitor. By this stage, Mr Barron had taken out a self-build insurance policy – however Mr Heatley insisted that Mr Rodgers produce evidence of his insurance for the period between 3 November and 15 December 2016.

Nevertheless, Mr Heatley’s solicitor sent out draft contracts to the plaintiffs’ solicitor, showing a purchase price of €73,775 and a deposit of €7,377.50. The named purchaser was Ms Egan only. In the special conditions of the contract, nothing was mentioned about insurance. Ms Egan signed the contract and sent a cheque for the deposit, and after further negotiations throughout January 2017, Mr Heatley signed the contract. At this point, a new special condition was written into the contract – for the plaintiffs to provide insurance indemnifying, inter alia, Mr Heatley and his company.

The argument regarding Mr Rodgers insurance, or lack thereof, continued, and in February 2017, Mr Heatley advised that he was not completing the contract and told Mr Barron to take anything he wanted off the site.

High Court

In August 2017, the plaintiffs commenced the present action for specific performance, or for damages in lieu of specific performance, of the contract.

Mr Heatley admitted the contract but pleaded that it was unenforceable owing to a misrepresentation of fact as to the existence of insurance, by which he was induced to enter into the contract. Mr Heatley counterclaimed for a declaration that he was entitled to rescind the contract, as well as damages for misrepresentation and assault.

Claim for damages in lieu of specific performance

At the start of the hearing, the plaintiffs decided that they no longer wished to purchase the site but asked for damages of €138,115.85 in lieu of specific performance. Mr Justice Allen grouped the heads of claim into:

  • The premium paid for the self-build insurance policy for two years;
  • Fees for Barron Architectural Services;
  • Solicitors’ fees;
  • Monies paid out for the building work;
  • Expenditure allegedly incurred for work not done one the site – i.e. for the timber frame, the windows, storage, and scaffolding;
  • Costs associated with purchasing another site in April 2018, including the increased stamp duty;
  • Rent since they sold their house and costs for moving house four times.

Considering the enforceability of the contract, Mr Justice Allen was satisfied that it was not a condition of the contract that Ms Egan should provide evidence of insurance for the period between 2 November and 15 December, and that if it was, Mr Heatley could have refused to sign the contract until he saw evidence of such. However, Mr Heatley did not do that, and then relied on the contract to purportedly forfeit the deposit.

Fake documents

In relation to insurance, Mr Justice Allen explained that, in August 2018, Mr Barron had submitted a document which purported to be a cover note from AXA insurance to Mr Rodgers.

Mr Justice Allen described the AXA logo as being obviously copied and pasted, and said “at a glance, it is a fake”.

The document held out that a new policy had been activated on 3 October 2016, but could not be activated “on this particular site due to the increased requirement over £6.5 million and the inclusion of another company”. Mr Justice Allen said that the document was “risible on its face”, adding “…it is a fake certificate purporting to confirm that Mr. Rodgers had no insurance. You couldn’t make it up.”

There were also fake documents submitted to support the claims for work not done on the site.

Stating that the case came before the court because Mr Heatley refused to complete the sale, and that this predated the submission of the fake documents, Mr Justice Allen said this did not disentitle the plaintiffs to relief but did go to the question of costs.

Award of damages

Mr Justice Allen allowed the claim in respect of the insurance premiums, half of the sum claimed for solicitors fees, €29,391.72 for the value of the work done on the site, €29,200 for over two years in rental costs, €2,500 for costs moving house four times, and €10,000 for general damages. He dismissed all other heads of claim.

Together with the decree for €77,435.72, Mr Justice Allen said Ms Egan was entitled to the return of her deposit.

Mr Heatley’s counterclaim was dismissed.

Stating that the preparation of the case was “shambolic”, particularly the failure of the plaintiffs and their solicitors to recognise obviously fake documents, Mr Justice Allen limited the award of Ms Egan’s costs to “two thirds of two days”.

  • by Seosamh Gráinséir for Irish Legal News

© Irish Legal News Ltd 2019



Other judgments by Mr Justice Senan Allen