Deposit of €142,000 for prospective IPAS centre must be returned as deal fell through, court orders
High Court Reporter
The High Court has ordered the return of a €142,500 deposit paid by a company that wanted to buy a former small hotel to turn it into an International Protection Accommodation Service (IPAS) centre.
Outeniqua Ltd, which was set up by a number of people who have invested in companies that purchase and run IPAS properties, sued Tom O'Neill and his former spouse Nollaig Buckley, the owners of the former 14-bedroom hotel, Coosan Cottage, Creaghduff, Co Westmeath, which the firm sought to buy, but the deal fell through and they sought the return of the deposit.
O'Neill, in his own proceedings against Outeniqua, sought specific performance of the contract and damages. Buckley adopted a neutral position in the proceedings.
In a judgment, Judge Oisín Quinn said Outeniqua was entitled to an order for the return of the deposit. He dismissed O'Neill's claim for specific performance and damages.
The judge said Outeniqua made the joint highest bid of €1.425 million for the property when it went up for sale.
In June 2023, solicitors for O'Neill and Buckley sent a letter to Outeniqua's solicitors headed “Subject to Contract / Contract Denied” and enclosing “contracts for sale and supporting documentation”.
This is a formula which means that until such time as contracts have been signed by the purchaser and vendor, and the deposit has been paid and accepted, there is no binding contract.
On August 11th, 2023, the contracts for sale were signed by Buckley, though not exchanged. But Outeniqua had decided to withdraw saying the proposed project would not be financially viable.
Outeniqua sought the return of the deposit but this was refused and High Court proceedings followed.
Judge Quinn found that on the objective evidence contained in the correspondence, no agreement would exist until contracts were signed and exchanged and due to the use by both sides of “Subject to Contract / Contract Denied” formula.
When Outeniqua notified its withdrawal from the proposed contract in August 2023 they did so before the contract had become binding since its offer had not yet been accepted in the manner stipulated, he said.
