The Court of Appeal handed down an interesting decision in
this case involving the sale of land.
The facts were that Mr Gibbons was selling real property and
Mr Doherty signed the contract for sale in trust and on behalf of a limited
company. Mr Gibbons then nominated the beneficiary of the trust and the purchaser
as ADT Investments Limited.
ADT Investments Limited was unable to complete the purchase
and Mr Gibbons then sued Mr Doherty and ADT Investments Limited for specific performance
of the contract. Mr Gibbons argued that as the company was not incorporated at
the time of execution of the contract by Mr Doherty he was entitled to sue Mr
Doherty in his personal capacity for specific performance.
The High Court refused to agree with Mr Gibbons who then
appealed to the Court of Appeal.
The Court of Appeal agreed with the High Court decision and
dismissed the appeal.
The Court of Appeal held General Condition 30 of the Law
Society General Conditions of Sale, 2001 Edition permits a person to sign a
contract in trust or as agent.
And importantly it does not expressly provide that the
beneficiary or principal be in existence at the time of the contract. It also
observed that that commercial reality sometimes demands that contracts be
signed in trust and once the principal is in existence to complete the
transaction there is no obvious problem.
You can read the full decision of the court of Appeal here
(Gibbons -v- Doherty & anor  IECA 275)
59.— (1) Recitals, statements and descriptions of facts,
matters and parties contained in instruments, statutory provisions or statutory
declarations 15 years old at the date of the contract are, unless and except so
far as they are proved to be inaccurate, sufficient evidence of the truth of
such facts, matters and parties.
(2) Where land sold is held under a tenancy (other than a
subtenancy), the purchaser shall assume, unless the contrary appears, that the
tenancy was duly granted; and, on production of the receipt for the last
payment due for rent under the tenancy before the date of the actual completion
of the purchase, the purchaser shall assume, unless the contrary appears, that
all the covenants and provisions of the tenancy have been duly performed and
observed up to the date of actual completion of the purchase.
76.— (1) Subject to subsection (2), a conveyance of land
passes all the claim, demand, estate, interest, right and title which the
grantor has or has power to convey in, to or on the land conveyed or expressed
or intended to be conveyed.
(2) This section takes effect subject to the terms of the
Many people do not like to negotiate or haggle. But it is
essential in our daily lives and we are regularly forced to negotiate whether
we like it or not.
It may be with a loved one, with a child, with a service
worker at an airline desk, with a receptionist in a hotel, with a Judge or
member of an Garda Siochána, with a referee on a sports pitch, with an
adjudicator at a WRC hearing, or when you are buying something like a car or a
house or business.
If you accept this, you might as well learn how to do it
successfully and for the best possible outcome.
I have negotiated to buy and sell property for over 30 years
and I have learned, through practice and research, some useful tactics to the
Let’s look at what I have learned, shall we, in the context of buying a house?
1. Listen carefully and aggressively to the other side
You need to listen very carefully to what the other side is
saying because you will usually pick up some vital clue as to the other party’s
real position-their real position as opposed to what the auctioneer says is the
reason for sale. You may not meet the vendors themselves but if you do it is a
good opportunity to pick up some vital clues about the property and the
motivation for sale.
You need to practice the same aggressive listening skills
when speaking with the auctioneer and the staff working in his/her office. It
is amazing what you might hear in an unguarded moment when you speak with a
busy receptionist or support staff.
You may not hear anything but keep in mind you have two ears and one mouth for a reason.
2. Adopt a friendly/playful voice
The tone of your voice and your general demeanour are factors in how the other side will react to you and your position. A friendly, non-threatening voice is the one I have found most helpful.
3. Tactical empathy
Showing empathy for the other party’s position is valuable and is only possible when you follow the advice in number 1 above: listen carefully to the other side.
4. Be prepared to walk away
No deal is better than a bad deal and you do need to be prepared to walk away. Splitting the difference is a lazy, misguided way of negotiating.
5. Getting to ‘no’
Forget about getting to ‘yes’ because you can very easily get to a false ‘yes’ which will not be delivered upon; you are better off getting to ‘no’ from the other side as you will have a better idea of their true position.
6. Deadlines can be an ally
You can make time your ally by recognising that even if a deadline is missed a new one can easily be introduced. Don’t rush into a bad decision, though, just to meet a deadline-let the other side worry about the deadline.
7. Stay calm
Keep your emotions in check, adopt the approach that ‘it’s just business’ and there is no need to lose the head or get carried away.
8. Most important word in negotiations
The most important word in negotiations is ‘fair’. If you tell the other side you only want what’s fair or want a fair deal you are more likely to get a deal.
9. Don’t ask ‘why’
Ask how or what questions, not ‘why’ questions. For example, ‘how am I supposed to do that?’, ‘how am I supposed to pay that much?’ Such ‘how’ questions will encourage the other party to bid against themselves and try to find a solution to your problem.
10. Arrive at a precise, specific final offer
Make whatever offer you like-something between 60% and 80%
of what you are eventually prepared to pay-and increase this by reducing
increments to arrive at a final specific, odd number-never an even number.
This gives the other party the impression that this is your
true final offer and you have thrown everything at it to do a deal. Offer an
even figure and the other party will not accept you are at your limit.
Negotiation is not an art that you cannot learn, or which is
only something that you can do naturally and you are a born haggler. Far from
it. There is a science to negotiating, too, and following the 10 tips above
will help you getter better deals. Over time you will get better and better at
Vat on property is something that is easy to overlook if you are buying commercial property. It may also apply to residential property, depending on the circumstances, so you need to be careful and obtain expert tax advice if there is any doubt in your mind.
The current situation with regard to VAT and property is the regime in place since 2008.
Since then most property transactions are exempt but there are important exceptions where the option to tax the supply of the property is exercised in certain situations.
When we refer to ‘property’, remember, we are also referring to leasehold property in addition to freehold interests.
Commercial property, new buildings
Vat is chargeable at 13.5% on a new building. A ‘new building’ is
The first supply of a completed property within 5 years of completion
The second and subsequent supply of a property, if the supply is made within five years of completion, and the building has been occupied for less than two years.
Commercial property, second hand buildings
Properties developed after 1st July, 2008 are exempt but the vendor and purchaser can jointly opt to tax.
If this option is not exercised the vendor/developer will face a clawback of a proportion of the vat which he has already reclaimed from Revenue on the acquisition or redevelopment of the property. This clawback will be calculated on the vat life of the property.
After 1st July, 2008 all lettings are exempt from vat.
The landlord can, however, elect to tax and charge vat on the rent at 21%. If he does not opt to tax he will face a clawback based on the vat he has already claimed on the development and/or acquisition of the property.
This option to tax does not arise if the landlord himself or a person connected to him occupies the building.
Assignments of leases
The assignment of surrender of a long lease will be chargeable to vat if the tenant who is the assignor was entitled to reclaim vat on acquiring the original lease or the development of the property.
The first supply of new residential property is liable to vat.
This page from the Revenue Commissioners is worth reading closely if you are concerned about vat on property. You are strongly advised to obtain tax advice from an accountant or tax consultant if you suspect that the vat position is not clear in either your supply or purchase of property.
In order for any contract to be enforceable you need 5 things:
The parties must have the legal capacity to enter into a contract
They must intend creating legal relations
The contractual terms must be certain
There must be offer and acceptance
There must be consideration.
For the sale of land or real property it was the case that a written note or memorandum was made which was signed by the person to be charged with the contract. Although this requirement was relaxed by reason of the equitable doctrine of part performance.
Doctrine of part performance
This doctrine held that an oral contract for the sale of land, where no note or memorandum existed, could be enforced by the party seeking to enforce the contract has partly performed his actions under the contract and the other party has acquiesced in those acts of part performance.
Land and Conveyancing Law Reform Act 2009
This Act changed the law by repealing the old Statute of Frauds (Ireland) Act, 1695 as follows:
Section 51.— (1) Subject to subsection (2), no action shall be brought to enforce any contract for the sale or other disposition of land unless the agreement on which such action is brought, or some memorandum or note of it, is in writing and signed by the person against whom the action is brought or that person’s authorised agent.
[SF 1695, s. 2]
(2) Subsection (1) does not affect the law relating to part performance or other equitable doctrines.
(3) For the avoidance of doubt, but subject to an express provision in the contract to the contrary, payment of a deposit in money or money’s worth is not necessary for an enforceable contract.
Memorandum/Note of Agreement
The following matters should be included in the memorandum
Any other provisions agreed between the parties
Where the conditions of common law and the Land and Conveyancing Law Reform Act 2009 are satisfied an enforceable contract for the sale of land (real property) comes into being. This type of contract is known as an ‘open contract’ because all the terms of the contract are not set out in the memorandum.
A closed contract, by contrast, is one in which the parties set out all the terms of the agreement in a formal agreement. It is the practice in Ireland that the standard form Contract for Sale produced by the Law Society of Ireland is used.