The High Court has overturned a Circuit Court order entitling a chemist who had paid a £2,000 booking deposit to buy a £66,000 Cork city apartment from a developer.
Mr Justice Smyth found Ms Clair Murphy had no enforceable contract for the purchase of the apartment at the Headlands, Wilton, Cork. He upheld an appeal by Pierse Developments (Cork) Ltd against a decision in Cork Circuit Civil Court in favour of Ms Murphy.
The judge also awarded costs of the appeal to Pierse Developments and vacated the order for costs made in favour of Ms Murphy in the Circuit Court. Mr Joseph Finnegan SC for Pierse, made no application for the costs in lower court.
Ms Murphy (29), of Cobh, had claimed that after paying a booking deposit for the apartment, she was entitled to buy it for £66,000. Pierse Developments said it withdrew the contract of sale after Ms Murphy had held it for 10 weeks without signing it.
After withdrawing the contract, the company offered the apartment for sale - at the same price offered to Ms Murphy - to another couple on its waiting list.
In a statement after the High Court upheld his company's appeal, Mr G.T. Pierse, the managing director of the company, said he was disappointed the case had been portrayed in the media as "gazumping", which was "clearly not the case".
He said the company had not sought to make a profit on the sale of the apartment although it could have done so.
Mr Justice Smyth said when Ms Murphy paid the booking deposit, she received a receipt from the auctioneer which was clearly marked "subject to contract". In her evidence, Ms Murphy had clearly admitted that some matters had not been specifically agreed upon. It had not been agreed what was the exact sum of deposit to be paid on the signing of the contract and there were other matters such as management fees and service charges which were not agreed. The judge also quoted Ms Murphy as saying that to continue, she knew she would have to sign a contract. He further refer
red to the sales advice notice which had a special condition to the effect that no agreement would be binding upon the parties until a formal contract had been signed and a full deposit paid.
The judge found Ms Murphy had no contract of sale and also had no note of memorandum in writing. He also accepted there was no part performance of a contract and no concluded oral agreement.
He said Ms Murphy had bought some bed linen and domestic appliances but those purchases could not be held to be part performance and they were never brought to the attention of the vendors. He noted payment of £140 was demanded by the building company from Ms Murphy in August 1997, which she paid on October 24th, 1997.
Mr Justice Smyth said he found it "somewhat strange" that the money was paid by Ms Murphy directly to the builders and not through the developers, although proceedings had already been issued in the matter and a lis pendens (an objection to anything being done with the apartment) had been registered on the property.
He said the building company cashed the cheque in ignorance but then returned the money. He was satisfied none of the matters alleged to be part performance was referable to Pierse Developments.
For all those reasons, he found the contract was not specifically enforceable and ordered that the lis pendens which had been registered on behalf of Ms Murphy be immediately vacated.