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GAZETTE
JULY
RECENT IRISH CASES
AUCTIONEER - COMMISSION
Plaintiff auctioneer's claim for
commission dismissed as defendant's
premises were not sold by auction.
The plaintiffs, a well-known firm of
auctioneers, claim from the
defendants £2,560, being 2|% on
£106,000 which defendant vendors
received on a sale of licensed
premises in Ballyfermot on 11
September, 1975. The first defendant
and his deceased brother, whose
widow the second defendant is, had
been co-owners of these licensed
premises in the proportion of six
tenths, and four tenths respectively.
The widow, on account of death
duties, was willing to sell her
husband's share to the first
defendant, but their respective
solicitors and accountants could not
agree on terms. While in nego-
tiation, the defendants agreed to put
the property up for public auction by
the plaintiffs. On 1 May, 1975,
plaintiffs wrote to the first
defendant about the proposed
auction of the premises and
mentioned that their fees were 2|%
of purchase price. No other terms
were agreed. Between 9 and 19 May,
1975, the plaintiffs published seven
newspaper notices advertising the
auction for the 28th May, but
instructions were given on 21 st May,
to cancel the auction. No auction was
subsequently held, but the property
was ultimately sold privately to a Mr.
Regan on 11 September, 1975. Mr.
Regan gave evidence that the first
time he did anything about purchas-
ing the property was when he
saw
the
advertisement
post-
poning the auction. In June,
there were negotiations between
the auctioneers and the defendants
for a possible sale for £105,000. At
the meeting in June, there were
conflicting versions of the events that
had taken place. But the plaintiffs do
not found their claim upon the June
meeting, but on the terms of the
letter of 1 May. The plaintiffs
maintain that their services were
engaged by the defendants for the
purpose of finding a purchaser, and
that the mode of sale was of no
significance. However the plaintiffs
were expressly employed in terms
stated by themselves to sell the
property by public auction on a
specified date at a specified place.
The plaintiffs were employed to use
12
their skill to carry out a specific
work. The contract contains no
provision for remuneration in the
event of no auction being held. The
defendants are thus not in breach of
their contract, and no claim is
maintainable on a
quantum meruit.
Accordingly the plaintiff's claim for
commission is dismissed with costs.
Daniel Morrissey & Sons Ltd. v.
Joseph and Bridget Nalty — Gannon
J. — unreported — 18 April, 1977.
CONTRACT -
SPECIFIC
PERFORMANCE
Specific performance refused as
contract for sale was illegal, as an
attempt to defraud the revenue.
Claim for specific performance of a
contract of sale by the plaintiffs to
the defendants of the Croffon House
Hotel, Dun Laoghaire, for £190,000.
The contract, dated 7 January, 1974,
was prepared on the Law Society's
standard form. A deposit of £2,000
was paid, and it was signed by the
two first defendant brothers, Francis
Woods and Thomas Woods "in
trust". Nevertheless the contract
provided that the purchaser's liability
thereunder is jointly and severally
binding on them. The plaintiff
company was controlled by two
brothers, Brian and Anthony
Rhattigan, with the Anglo-Irish Bank
having a substantial interest. The
third named defendant, Investment
Holdings International Ltd. is
controlled by the Woods brothers.
This company was first disclosed to
the Vendors by letter from
purchaser's solicitor on 19 August,
1974.
The whole transaction was far
from being the straightforward sale
appearing on the contract in writing.
T7ie solicitors concerned took part in
the conduct of this contract although
aware that their clients were dealing
in ancillary transactions of which
they had no notice. The main
ancillary transaction referred to lands
at Castletown which the Woods
brothers had agreed to sell to the
Rhattigan brothers for £25,000. There
was a conflict of evidence in relation
to most of the incidents in
the transactions. At the time the
contract for the sale of the Croffon
House Hotel of 7 January, 1974,
was duly signed by the Woods
brothers, the solicitor for the plaintiff
left the parties together to complete
another transaction; the solicitor for
the defendants was not present. In
the absence of solicitors, the parties
signed a supplementary agreement,
to the effect that if the sale of the
Crofton House Hotel was not
completed due to a failure on the part
of the vendors, the vendors would
pay the Woods brothers the sum of
£25,000. This agreement was duly
signed by the Rhattigan brothers and
by the Woods brothers. The back of
this supplementary agreement
referred to purchase of 13 acres of
land at Castletown, Celbridge for
£170,000 by Janus Securities, a
company controlled by the Rhattigan
brothers, and the sum of £25,000
related to this purchase. The real
purchase price of the Croffon House
Hotel was £190,000 plus £25,000
payable in respect of the Castletown
lands.
In the early summer of 1974, the
Woods brothers cleared the Crofton
site preparatory to development.
Owing to the recession and lack of
demand for office blocks, the Woods
brothers were not able to complete
this transaction.
It was argued on behalf of the
Woods brothers -
(1) That there was no sufficient
memorandum in writing to
satisfy the Irish Statute of
Frauds. McWilliam J. was
satisfied that the memorandum
did not set out all the material
terms of the contract, but he was
also satisfied the demolition of
the Croffon premises was an
unequivocal act of part
performance which takes the
case out of the Statute of Frauds.
(2) That the contract is illegal, as it
constitutes an attempt to defraud
the Revenue authorities and as
constituting a fraud on the
shareholders of one company to
the advantage of the other
company. Undoubtedly both
parties were trying to conceal
from the Revenue authorities the
true nature of the transaction.
Although the issue of illegality
should have been pleaded, in the
circumstances it cannot be
ignored. The plaintiff's claim for
specific performance of the
cont ract is ac cord i ng ly
dismissed.
Starling Securities Ltd. v. Francis
and Thomas Woods and Investment
Holdings International Ltd. —
McWilliam J. — unreported — 24
May, 1977.