Donegan & Ors v Kenny (Unapproved) [2020] IECA 90 (08 April 2020)

Donegan & Ors v Kenny (Unapproved) [2020] IECA 90 (08 April 2020)

The respondents were entitled to recover the deficiency on resale under General Condition 41(a) as the property was resold within the stipulated one-year period. The trial judge erred in awarding interest at the contractual rate of 10% for the period between the original closing date and the resale; instead, damages should reflect the actual interest incurred by the respondents on their borrowing from AIB during the delay. The respondents took reasonable steps to mitigate their loss, and the appellant failed to discharge the burden of proof to show otherwise.

Citation
[2020] IECA 90
Parties
Plaintiff/respondent: Des Donegan; Plaintiff/respondent: Alan O’Connell; Plaintiff/respondent: James Doran; Defendant/appellant: Denis Kenny
Jurisdiction
Ireland
Judgment Date
08 April 2020
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
Appeal allowed in part; High Court order varied.
Legal Topics
Specific Performance, Damages for Breach of Contract, Mitigation of Loss, Interest Rates in Sale Contracts, Penalty Clauses
Contract Law Property Law Specific Performance Damages for Breach of Contract Mitigation of Loss Interest Rates in Sale Contracts Penalty Clauses

Case Brief

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Parties

Des Donegan

Plaintiff/respondent

Alan O’Connell

Plaintiff/respondent

James Doran

Plaintiff/respondent

Denis Kenny

Defendant/appellant

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the respondents took reasonable steps to mitigate their losses in the resale of the property
  2. 2 Whether the trial judge was correct in applying the contractual interest rate of 10% as the metric for damages
  3. 3 Entitlement to recover deficiency on resale under General Condition 41(a)

Ratio Decidendi

The respondents were entitled to recover the deficiency on resale under General Condition 41(a) as the property was resold within the stipulated one-year period. The trial judge erred in awarding interest at the contractual rate of 10% for the period between the original closing date and the resale; instead, damages should reflect the actual interest incurred by the respondents on their borrowing from AIB during the delay. The respondents took reasonable steps to mitigate their loss, and the appellant failed to discharge the burden of proof to show otherwise.

Court Disposition

Appeal allowed in part; High Court order varied.

Orders

  • Declaration that respondents are entitled to recover actual interest accrued on AIB borrowing for the delay period as damages, not 10% contractual interest.
  • Affirmation of entitlement to recover deficiency on resale and retention of deposit.