The Gazette 1976

J UNE /J U LY

1976

GAZETTE

VENDOR AND PURCHASER Rescission of contract of sale of licensed premises and return of de- posit to purchaser granted in view of misrepresentation. The two plaintiffs claim rescission of an agreement made on 15th November, 1973, for sale by the de- fendant to the plaintiff for £95,000 in respect of licensed property in Roosky, Co. Leitrim. They also claim £20,000 deposit by them to the defendant as deposit for said agreement, and £4,700 auction fees, together with 13% interest on said sums from 15th November, 1973 to latest date. They also claim addi- tional damages for misrepresenta- tion, breach of warranty, fraud and deceit. The plaintiffs allege that prior to an auction in Dublin on 15th November, 1973, on the auc- tion premises, the defendant vendor expressly warranted to a solicitor of plaintiff's firm that he had returned a turn-over of between £60,000 and £65,000 to the Revenue Commis- sioners in respect of the property. On the faith of the said warranty, the plaintiffs signed the memoran- dum, and paid the deposit and auction fees. The plaintiffs have since discovered that this warranty was untrue, inasmuch as the turn- over was much lower. The plaintiffs accordingly repudiated the agree- ment by letter of 8th March, 1974. The defendant attempted to deny that he had quoted any figure of turn-over to the plaintiff, and at- tempted to claim a counterclaim that the deposit of £20,000 be for- feited to the defendant; he also attempted to claim the alternatives of specific performance, re-sale, in- terest on outstanding purchase money, and damages for breach of contract. The two plaintiffs were anxious to purchase a licensed premises, and had ascertained that the going price was one and a half times the turn- over, and that consequently the turn- over was an important factor in determining the price. At a lunch before the auction, the plaintiff arranged for the solicitor to repre- sent him at the auction. The de- fendant stated verbally at the auc- tion to the solicitor that, according to the returns he had made to the Revenue Commissioners, the turn- over was between £60,000 and £65,000. This statement induced the solicitor on behalf of the plain- tiff to bid high, and the premises were finally knocked down for £95,000. The plaintiff stated that the defendant called to his house in January, 1974, and had assured him

18 brandies and 22 glasses of Harp Lager on 3rd August, and that he was consequently intoxicated. The defendant's evidence is so heavily burdened with improbability that it must be rejected, and the plaintiff's version must be upheld. The defendant further claims that the agreed price of £6,000 was so much below the fair price for the property that it was unfair and unconscionable. The onus of proof to establish this lies on the defen- dant, who is a publican. The de- fendant bought the premises in Dublin Street, Monaghan, for his son, then aged 18 years, for £7,000 in 1970, and made a few minor alterations. A local auctioneer gave evidence that the state of repair was below average. The plaintiff said that normally these premises were not open save on Saturday evenings. The furniture was old. The plaintiff would have to pull the whole in- side out, take off the back wall, and put a new roof on. He expected to spend about £10,000 on it. He was basing his price on what he would have to spend. The Court considers that there is not such a disparity between the price of £6,000 agreed upon, and the price which the de- fendant might reasonably have ex- pected from any other buyer. The defendant was anxious to get rid of the premises, and to be paid in cash in full, and there had been ample negotiation. The defendant was in no position, after his very short period to show any evidence of trading returns attractive to a pro- spective purchaser. The defendant claimed there had been delay by the plaintiff; there was no evidence to show that the plaintiff intended to abandon his claim, nor is there evidence of any injury to the defendant. There is implicit in a contract of sale of licensed premises a term that, if the vendor is the occupier and licensee, he will not permit the licence to be lapsed or forfeited, nor will he sur- render it. But the plaintiff claims an injunction, for which there appears to be no basis, instead of a declara- tion that the defendant is a trustee for him of the premises and of the licence. It is therefore proper in this case that the plaintiff should be awarded damages which in all the circumstances are estimated at £4,500, in order to enable him to carry out this purchase. The plain- tiff is also entitled to the costs of the action.

that he could prove that the amount of the turn-over was genuine. The plaintiff admitted that the cheque for £24,750 was cancelled by arrangement with the auctioneer. The second plaintiff stated he had visited the auction rooms some days before the sale, and had a dis- cussion with the auctioneer about turn-over. Although no books were produced, the amount was stated to be about £50,000. At the auction, when the solicitor asked whether there were any records about turn- over, he was told there were no figures available. An accountant practising in Co. Longford stated lie dealt with defendant's income tax affairs for the two years ending 30th September, 1973, and the total turn-over for the two years was £32,000; the accountant said that he told the first plaintiff the turn- over would be about £40,000. From all the evidence given, it is quite clear that the plaintiffs attached great importance to the question of turn-over. The Court accepts that the solicitor bid for the property up to £98,000 on the sole understand- ing that the defendant had stated the amount of the turn-over to be from £60,000 to £65,000. This statement was not only untrue, but was made knowing it to be untrue, and was thus a misrepresentation. Accordingly the plaintiffs are en- titled (1) to rescind the contract, (2) to the return of the deposit and the auction fees, and (3) to stated interest. The irregularities in the bidding sanctioned by the defendant were an infringement of the Sale of Land by Auction Act 1867. Airlie and Keenan v. Fallon — Hamil- ton J. — unreported — 27th January, 1976. HABEAS CORPUS Unruly prisoner subject to special restrictions is not undergoing in- human and degrading treatment. Habeas Corpus refused. Application to make absolute Con- ditional Order of Habeas Corpus. The applicant is detained in Mount- joy, having been convicted on a number of counts of breaking and entering and robbery with violence, was sentenced to two years on 28th February, 1975, and, if of good con- duct, could be entitled to be re- leased in July, 1976. Various psy- chiatric doctors have given evidence to the effect that the applicant is suffering from a socio-pathic per- sonality trait disturbance. He is not specifically insane, nor is he a psycho- path. He had been brought up 15

White v. McCooey — Gannon J. — unreported — 26th April, 1976.