TWO BUSINESSMEN have been ordered by the Commercial Court to honour a 2008 contract to buy lands for €16.5 million which have since been valued at some €4.5 million.
Mr Justice Peter Kelly made orders requiring Tom Ryan, property developer Gerard McGreevy and Mr McGreevy’s company, McGreevy Enterprises Ltd, to perform a contract of May 25th, 2008, under which they would pay €16.5 million for the lands in Co Westmeath. Both men had argued they could not raise the finance required.
The 32 acres at Ardmore Road, Mullingar, have been valued by a bank at €4.5 million, the court previously heard. Mr McGreevy had told the judge he got involved to help out Mr Ryan, and had never himself been to Mullingar or seen the lands.
The case arose after Mr Ryan, of Herbert Street, Dublin, who finds development sites which builders might be interested in buying, agreed in July 2006 to buy the Mullingar lands from Adrian Murphy, of Rathdrisogue House, Castletowngeoghan, Co Westmeath, and Sean Mackin, of Morehampton Road, Donnybrook, Dublin.
The plaintiffs, as part of a “sub-sale” arrangement to save on stamp duty, bought the land from the original owner for €5.75 million before selling it on to Mr Ryan in a deal valued at €18 million.
Mr Ryan set about preparing planning applications and canvassed various developers who might be interested in developing the land as partners. It was agreed to close the sale in January 2007, but this did not happen because the property market was slowing.
Court proceedings were later commenced. Mr Ryan argued the downturn in the property and banking sectors meant he could not meet the terms of the contract. An agreement of May 25th, 2008, provided the purchase price should be reduced from €18 million to €16.5 million. A deposit of €400,000 was paid, with the rest to be paid in two tranches by September 2008.
When the monies were not paid, the plaintiffs sought orders requiring the defendants to honour the contract.
In his judgment yesterday, Mr Justice Kelly said there was no basis for a refusal of an order requiring specific performance, and he directed the contract be performed within three weeks.
