AN INVESTMENT company has won a High Court order requiring developer Gerry Gannon to complete the purchase of a lease for a building next door to his Dublin 4 headquarters. The company is also to receive damages.
Liberty Asset Management (LAM), a subsidiary of Friends First, claimed it was “trapped” into having to pay €120,000 rent a year on its old offices at 54 Northumberland Road because Mr Gannon refused to complete an agreement to buy Liberty’s leasehold interest in the building.
That May 2006 agreement was intended as part of a larger deal in which Mr Gannon rented LAM another premises in Clonskeagh and was to take over the lease on LAM’s former offices beside his business headquarters at 52 Northumberland Road.
LAM sought High Court orders to compel Mr Gannon to complete the agreement to purchase the lease. It also sought damages for losses incurred through having to pay rent, maintenance and insurance on the vacated building.
Mr Gannon denied he entered into any such contract in relation to number 54.
Even if he had, he argued, any such agreement was not enforceable because there was no completed memorandum of agreement and therefore no binding contract.
Mr Gannon had told the court he was only interested in taking over the lease for number 54 if LAM exercised “a break clause” under which the lease could be assigned to new tenants usually after five to seven years. This was not done and he pulled out of that aspect of the deal, he said.
Ms Justice Mary Laffoy yesterday ordered Mr Gannon to complete the contract to take over the lease for number 54.
She said Mr Gannon was well aware the break clause was personal to LAM and any takeover of the lease for number 54 was not subject to a condition requiring LAM to exercise that break option.
There was no proposal put to LAM and no commitment from it to exercise the break clause, she said.
Nothing had occurred which released Mr Gannon from his contractual obligation to take over the lease for number 54, the judge ruled.
She noted Mr Gannon, in evidence, “took umbrage” at the suggestion that he did not carry out the deal.
While there was no memorandum of a concluded agreement, the judge said, LAM was entitled to have the contract completed because it had fully entered into the agreement to lease the Clonskeagh property.
LAM was “not precluded” from relying on the the equitable doctrine of part performance.
She ruled that LAM was entitled to damages for rent, rates, insurance, and professional fees in relation to number 54 and adjourned the case so those items could be quantified between the parties.
