Irish High Court Finds Billionaire Racing Magnate Was Flogging a Dead Case
A recent high-profile case in the Irish High Court has reaffirmed the principle that when it comes to contracts for sale between parties, a handshake agreement falls well short of creating a binding and enforceable contract.
That was the bad news for billionaire former Manchester United owner John Magnier, who took a case to the High Court seeking, inter alia, an order for specific performance of an agreement against the Defendants, Richard Thomson-Moore and Barne Estate Limited, in respect of what the Plaintiff claimed was an agreement to sell the land at Barne Estate, a 751 acre plot, for an agreed sum of €15 million.
The Plaintiff’s claim was that a binding sale agreement was struck on 22nd August 2023 at a kitchen meeting in Coolmore House, where the Plaintiff owns a world-renowned stud farm. He also claimed there was a subsequent exclusivity agreement agreed, which stipulated that the Defendants would not permit its representatives to solicit or encourage any expression of interest, inquiry or offer on the property from anyone other than the Plaintiff.
Mr. Thompson Moore defended the proceedings on the basis that:
· No binding contract was ever concluded
· Negotiations were still subject to contract
· The people present at the meeting did not have the authority to agree the sale and therefore bind the vendors – Barne Estate Limited – to an enforceable contract for sale.
The case ran for over a month in the High Court before Mr. Justice Max Barrett and, given the high-profile nature of the Plaintiff, was extensively covered in the media.
An early issue which arose before a witness could be cross-examined was the consistency of pleadings. The Statement of Claim had been altered three times in the case and submitted subsequent affidavits to clarify earlier pleadings, seemingly in response to rebuttal evidence put forward by the defence.
Ultimately, the claim fell short of proving that a valid and binding contract for sale was agreed. Mr. Justice Barrett made no less than fourteen preliminary findings in his decision, all of which undermined the Plaintiff’s claim.
Aside from a failure to discharge the burden of proof with regard to a valid and binding contract, the most condemning findings for the Plaintiff’s case were as follows:
It was found that Mr. Thomspon Moore did not have the ability to bind Barne Estate Limited to a sale, and that a follow-up communication sent the next day was marked ‘Subject to Contract’, evidencing that this was not a concluded agreement.
The idea that a concluded contract was in place was inconsistent with the exclusivity agreement that was subsequently entered into, Mr. Justice Barrett noting that the rationale put forward by the Plaintiff – to stop anyone ‘getting up on Coolmore’s inside’ before the sale was agreed - is irreconcilable with the existence of a completed bargain.
Credibility was undermined by ‘the alteration of sworn testimony on the key question of trustee approval’ which ‘give the appearance of recollection altered in light of the evolving case presenting’ (in other words, the specifics of the Plaintiff’s case seemed to change as the facts developed).
The case did not set any new precedents, nor is it likely to be the subject of legal debate in years to come. It was, in truth, an emphatic decision by Mr. Justice Barrett for the defence.
Nevertheless, it serves as a useful reminder that you can have an agreement on price, sealed with a handshake, in respect of a property deal however that will not be sufficient to complete an effective and binding contract for sale.
It also underlines the importance of clearly and accurately pleading one’s case from the outset, as the evolving nature of the Plaintiff’s case only served to undermine it.
For further advice on contract law and dispute resolution, please contact Shane McVeigh or any member of our Disputes Resolution Team.
Shane McVeigh
shane.mcveigh@davidsonmcdonnell.com