February 28, 2014

On 17 February 2014, His Lordship Mr Justice Deeny delivered Judgment in the case of Fernhill Properties (NI) Limited v Robert Scullion No. [2014] NICh4.

Mr Scullion had entered into a Building Agreement and Agreement for Lease in connection with an apartment at College Court Central, 14 – 20 College Square and 54 – 62 King Street, Belfast.

The Defendant paid both a nominal booking deposit and a 10% deposit in 2007. The completion date was defined as November 2008. The Contract was not subject to finance and time was not of the essence in relation to the completion date. Indeed, Mr Scullion accepted that he needed to make time of the essence by the service of a Notice to Complete, which he duly issued on 17 April 2009.

The question for determination by the Court was whether or not the Notice to Complete was valid and effective?

The key issues arising out of that question included:-

1. Whether Mr Scullion needed to be ready, willing & able to complete on or shortly after that date?

2. Whether 5 working days notice was a reasonable deadline;

The Judge held that having given 5 working days to Fernhill Properties (NI) Limited to complete, Mr Scullion ought to have been ready, willing and able to complete at that time.

Mr Scullion had previously served two notices to rescind the contract based on the alleged delay in the construction of the premises by Fernhill Properties (NI) Limited. The Learned Judge considered that the Notice to Complete dated 17 April 2009 was a “volte face” on the part of Mr Scullion and his willingness to actually complete must be doubted given that chronology of events.

Mr Scullion was in a position to produce at trial a document from a financial institution confirming that it would offer to advance monies to him but it was not a formal letter of offer which would have been binding upon the financial institution. The money had not been received by Mr Scullion’s Solicitor at the time the Notice was served, nor indeed at any later time.

In addition, Mr Scullion & his wife had also agreed to buy another apartment in the complex. The Judge stated that the evidence as to the ability of Mr Scullion to bridge the gap between the amount which the financial institution was prepared to lend & the purchase price was “very vague” & “very thin”.

His Lordship therefore concluded in light of the evidence before him that Mr Scullion was not ready, willing and able to complete on 24 April 2009, or indeed, even shortly after that date.

The inference which the Court drew was that with the fall in the property market had led Mr Scullion to attempt to escape from his contractual obligations. The Court indicated a great deal of sympathy for purchasers in such a position but held that where a binding legal contract was entered into with a developer/builder, the developer/builder was entitled to have the contract enforced.

His Lordship also indicated that 5 working days notice for completion was probably insufficient where the transaction involved a purchase “off the plan”, as opposed to the purchase of an existing dwelling house.

Please note; the content of this article is for information purposes only and further advice should be sought from a professional legal advisor before any action is taken.
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