[2009] Iehc 290

Quantum of damages 25. The damages to be awarded to the plaintiffs should be such as will put the plaintiffs in as good a position as if the Contract had been performed. There is no dispute that such is the principle. If the sale had been completed in accordance with the Contract, the plaintiffs would have received the balance of the purchase price of €5,670,000.00 on 12th September, 2008, or within a short period thereafter. They have not received this sum and by reason of the option taken at the end of the proceedings i.e. not to seek an order for specific performance they are, in effect, accepting the breach of contract by the defendants and now treating the Contract as discharged. The plaintiffs therefore retain the lands and must give credit for those lands at their current value against the gross loss of €5,670,000.00. 26. There is great difficulty in present market conditions in reaching a conclusion as to the probable current value of this property. Evidence was adduced on behalf of the plaintiffs from Mr. Greene and by the defendants from Mr. Duff, both valuers. Each valued the lands, having regard to potential development in accordance with the planning permission for eighteen houses obtained in August, 2008. Nevertheless, the evidence of Mr. Duff was that, at present, there is no market for the sale of a site such as these lands, or, indeed, for the sale of individual house sites if the property were to be laid out with roads and services and eighteen individual sites sold. Insofar as he placed a value on those individual sites, those values would only apply if the market picked up and finance becomes available. The evidence of Mr. Greene on this point was less explicit but nevertheless it was clear there was great uncertainty, in his view, of what is the current market value. He gave evidence of some recent sales of houses which he considered relevant to the prices used in his valuation. I am satisfied that both valuers genuinely attempted to assist the Court in a time of great uncertainty.. 27. Mr. Greene approached the valuation of the site in two ways. First, if the property were fully developed and houses built in accordance with the planning permission obtained, for the detailed reasons given to the Court, including probable house prices and building costs, he formed a view that, taking into account a required contribution for social and affordable housing, the site has a current market value in the order of €1,884,000.00. In the context of a witness statement which had been delivered from Mr. Duff, he also considered a valuation upon a basis that approximately €300,000.00 would be spent to put services and roads on the lands and then eighteen individual sites sold off. On that basis, again with a contribution for social and affordable housing, he estimated the value of the entire site to be in the order of €2,102,000.00. There was some controversy in relation to VAT which if not applied, as he stated, might increase his value on this basis by a further €400,000.00 approximately. 28. Mr. Duff, on the other hand, expressed the view that if roads and services were put in the eighteen sites would then realise, on average, not less than €250,000.00 each and might even achieve €300,000.00. Taking into account the agreed sum of €300,000.00 for roads and services, and a social and affordable housing contribution in the order of €500,000.00, and using €250,000.00 this results in an estimated value of the site of €3.7 million. Nevertheless, as already stated Mr. Duff accepted that there is, at present, no market for the sale of this site at that price or the eighteen individual sites and an average of €250,000.00 each. Accordingly, this cannot be considered as a current market value but rather a potential value when the market picks up.

29. There was also evidence of a valuation of the site in 2005, before rezoning, at €1.8 million and, after rezoning, at €4.0 million. In Mr Greene’s view, current land values are now lower than 2005 values. He expressed a view that they were closer to 2003 or 2004 values. Unfortunately, I have no evidence of the value of this property or a comparable site in 2003 or 2004. 30. On all the evidence given by the valuers, I have concluded that the value of the property in sale has reduced from the price agreed in the Contract by more than 50%. I have concluded that the evidence given by Mr. Greene in relation to a current market value (with his VAT treatment) is at the lower end of a probable current value but that Mr Duff’s valuation is more significantly higher. I have determined that, in assessing the damages herein, the plaintiffs should give credit for the retention of the lands at a current value of €2.6 million. The balance due pursuant to the Contract was €5.670 million. This results in a net award of €3,070,000.00. 31. The remaining issue is that of interest. The plaintiffs claim interest pursuant to the Contract on the outstanding balance of €5,670,000.00. The rate of interest under the Contract is 8%. As damages are being awarded in lieu of specific performance, it appears to me that in accordance with the principle of putting the plaintiffs in the position they would have been if the Contract had been performed, and taking into account the fact that they now retain the property, interest should only be payable on the net amount of the award. If the Contract had been performed, completion should have taken place on 12th September, 2008, or within a short period thereafter. Having regard to condition 40 of the general conditions, and the fact that no completion notice was served, I have concluded that I should exercise the discretion given me by the Courts Act in relation to interest (also at 8%), to award the plaintiffs interest on the sum of €3,070,000.00 from the date of commencement of proceedings i.e. 9th October, 2008, pursuant to the Courts Act,(at the rate of 8%) until the date of judgment. Relief There will be judgment in favour of the plaintiffs against the defendants, jointly and severally, in the sum of €3,070,000.00, together with €175, 621.00 being my estimate of interest at 8% from 9th October, 2008, to the date of this judgment, giving a total of €3,245,621.00.

Extract from: http://www.bailii.org/ie/cases/IEHC/2009/H290.html Judgment Title: Collins & Anor -v- Duffy & Anor Neutral Citation: [2009] IEHC 290

High Court Record Number: 2008 8310 P Date of Delivery: 26 June 2009 Court: High Court

Composition of Court: Judgment by: Finlay Geoghegan J. Status of Judgment: Approved

Neutral Citation Number: [2009] IEHC 290 THE HIGH COURT COMMERCIAL COURT 2008 8310 P

BETWEEN ROBBIE COLLINS AND JULIE ANN COLLINS PLAINTIFFS AND GARY DUFFY AND JOE CALLAN DEFENDANTS JUDGMENT of Ms. Justice Finlay Geoghegan delivered on the 26th day of June, 2009