Supreme Court upholds €320k damages award against developer Gerry Gannon over lease

By Ann O'Loughlin

The Supreme Court has upheld an order requiring developer Gerry Gannon to pay an investment company €320,667 damages over his failure to complete the purchase of a lease for a building next door to his Dublin 4 headquarters.

Mr Gannon had appealed to the Supreme Court against the order made in 2009 by then High Court judge, Ms Justice Mary Laffoy. That order was stayed pending the appeal on the basis of Mr Gannon undertaking to pay rent on the property.

Liberty Asset Management (LAM), a subsidiary of Friends First, had taken proceedings against Mr Gannon over a 2006 deal in which he was supposed to take over the lease, valued at more than €120,000 per annum, on LAM's old offices at 54, Northumberland Road. Mr Gannon's offices are in number 52.

The lease agreement was part of a bigger deal whereby Mr Gannon rented to LAM new offices in Clonskeagh owned by him.

While the Clonskeagh element went ahead, Mr Gannon refused to complete the Northumberland Road aspect of the agreement on grounds he was not given a break clause in the lease which LAM had enjoyed while it was in No. 54.

In her October 2009 High Court judgment, Ms Justice Laffoy found the break clause was personal to Mr Gannon.

The 2006 deal was unenforceable unless Liberty was entitled to reply on the doctrine of part performance and it was so entitled, she ruled.

The doctrine of part performance arises where a party, to the knowledge of the other party, acts to their detriment in carrying out irredemiably their obligations, or some significant part of them, under an otherwise enforceable contract.

Giving the unanimous Supreme Court judgment today, Ms Justice Iseult O'Malley, with whom Ms Justice Elizabeth Dunne and Mr Justice Peter Charleton agreed, found Mr Gannon had not demonstrated the High Court had erred either concerning the facts of the case or the law.

The High Court was entitled to find the facts of this case gave rise to the application of the doctrine of part performance, the judge said.

The judgment means the damages award by the High Court, based on assessment of damages in relation to rent, rates, insurance and insurance for number 54, stands.

The €320,677 sum was agreed by the parties pending the Supreme Court appeal.

Costs issues will be decided later.


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