Paid part of site price in cash. Can contract be voided?

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Lorz

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We purchased a site a number of years ago and at the insistence of the developer paid an amount in cash. We initially refused but the developer insisted he would not sell us the site without a cash payment. It was not "cash" in the true sense (undisclosed funds) it was money earned after tax and was withdrawn from our bank account. The developer was contracted to install the services but failed to do so. We took a case against him and after nearly 30 court appearances where the case was "listed for mention" the services were eventually installed. However we are now seeking reimbursement of our expenses owing to the delays encountered by his failure to install the services - his legal team are now arguing that because of our payment of cash, the contract is illegal and the case should be thrown out. Incidentally we made a full disclosure to the Revenue some time ago and paid the increase in stamp duty - there were no fines or penalties imposed.

Will the case definately be struck out or is it at the judges discretion?
Is there any argument we can make which may keep the case open?
 
What difference does it make? Money is money. You paid, he did not deliver.
 
The developer will have to prove that you were aware that he was asking for the cash to facilitate him in the evasion of tax or other liabilities.

When you say you made a disclosure to Revenue, was this some time after the fact? Did the contract state all costs including this cash payment? If the contract did not include these details, and the disclosure to Revenue was only made after you started experiencing difficulties with the developer, then legally the contract can be declared null and void. But that's up to the judge to decide.
 
I would guess that the other side is trying to discourage your case on the grounds that you might be embarrassed by Revenue's interest in the case. But if you have made a full disclosure, you have nothing to fear.

What did your solicitor advise at the time? Did you tell them about the cash payment?

Was it actually cash and not a cheque? He presumably has acknowledged the cash payment?
 
Brendan Burgess said:
But if you have made a full disclosure, you have nothing to fear.
Click to expand...

Except costs.

What was on your contract to purchase the site- the full amount ( including cash) or the amount less the cash. This is the relevant point, not what you have done since and not how the money was earned.
 
Lorz said:
his legal team are now arguing that because of our payment of cash, the contract is illegal and the case should be thrown out.
Click to expand...

I'd be very worried if I were you. It is quite clear from your post that you paid cash to evade stamp duty. And therefore this amount is not in the contract. It doesn't matter that this was money from taxed income, nor does it matter that you've since declared it to revenue (incidentally I'm amazed they didn't fine you).

You really need your solicitor and more particularly your barrister to tell you your options, including letting the case go as it seems all you are doing is racking up costs. How on earth have you been able to pay for 30 court appearances?
 
The cash amount was not included in the contract. We did not advise our solicitor of this payment at the time.

Again, I must reiterate that it was not our suggestion to pay the cash amount, we did not want to pay cash (and neither did we have cash) but when we were initially asked to pay cash and refused, the developer refused to sell us the site. We were not trying to evade stamp duty. The stamp duty that was initially "saved" was €2,500 - hardly a large amount. It was the developer that was trying to evade tax.

The reason that the Revenue didn't impose fines or interest is because they could see that we were not the ones who instigated the cash payment - the developer had insisted on cash from all other sites sold in the same development. He did have to pay fines and interest. We made a declaration to Revenue before we appeared in court on the matter.

We have not had to pay any legal costs to date and have had our legal costs todate awarded to us in the Circuit Court before the Judge had even heard the case (it was always down for mention only). The developers barrister was quite surprised by the Judges decision to award costs before hearing the case but the developer was continuosly in breach of court orders and lying in court so the Judge lost his patience with him.
 
Lorz does the developer have money? You do realise if he doesn't pay the costs that you will have to pay. Do you know how much you have racked up in legal fees?

I suspect a developer who has acted the way you've outlined so far has no intention of ever paying, he will do a bunk or dissipate his assets before you will be paid. Have you asked your solicitor what happens if the developer doesn't pay.
 
The developer has both money and assets. We have considered that he may put his assets out of the reach of the courts and at one stage asked that his assets be frozen pending the outcome of this case but his barrister assured the court and us that this would not happen. We have recently conducted a search on his assets which confirmed that he still has vasts amounts of land in his name.

We have explained to both our solicitor and barrister on numerous occassions that we simply do not have the funds to pay their legal fees. As advsied, our legal fees for the 30 days in the Circuit Court have been awarded to us as indeed have our fees for attending court. It is our fees from this point forward that will be the issue.
 
Illegality of Contract?

I was wondering .... if the developer takes the stand and our barrister asks...

Who owns the lands at X
Is there a building on these lands
Who owns the building
How did X come to be in possession of these lands
(Answer - I sold the land to Y on a date)

Does the fact that the developer testifies that we own the lands and the house and bought and paid for the land on a given date not confirm that he believes the contract is valid and that we are the legal owners?

OR ...

Does this open another can of worms and if the contract is deemed to be illegal could one argue that we don't own the land - are we in danger of losing our property?
 
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