Property Market in UK Law

But, in a case where there is no evidence of any discussion between them as to the amount of the share which each was to have – and even in a case where the evidence is that there was no discussion on that point – the question still requires an answer. It must now be accepted that (at least in this Court and below) the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property.

That decision is entirely consistent both with the nature of a deposit and with the general approach of the law to repudiation and renunciation of contracts. Since the payment of a deposit at the executory stage of the contract is an earnest (or guarantee) of further performance, it is no surprise that a failure to pay the deposit on time is taken to demonstrate that the buyer is unwilling to perform the contract as a whole.

In the exercise of his rights over his security the mortgagee must act fairly towards the mortgagor. His interest in the property has priority over the interest of the mortgagor, and he is entitled to proceed on that footing. He can protect his own interest, but he is not entitled to conduct himself in a way which unfairly prejudices the mortgagor.

Yet the householder must surely be entitled to say that he chose to obtain from the builder a promise to produce a particular result because he wanted to make his house more comfortable, more convenient and more conformable to his own particular tastes; not because he had in mind that the work might increase the amount which he would receive if, contrary to expectation, he thought it expedient in the future to exchange his home for cash.

For my part I find Mr Walker's argument persuasive. Given that in December 1994 BCL became free to sell or retain their estate as they chose, why should the risk not then be regarded as switching back to them? Had they sold, no one doubts that that sale would have crystallised their loss and thus ended their risk. Why should it be otherwise merely because they chose instead to retain the property? True, as the judge observed when later giving judgment on the question of interest, BCL

It may well be that if, on learning of the real condition of the house, he had decided to leave and re-sell, be would have been entitled to recover from the Defendant, in addition to the £4,000, his costs and expenses of moving in and moving out and of the re-sale. As, however, he elected to stay, after all the facts had become known to him, this point does not arise.

I therefore am of the same view as my Lord the Master of the Rolls that the right measure of damage is the measure suggested in both Philips v. Ward and Ford v. White, which is simply the difference between what the plaintiff paid for the property and its value at the date when he obtained it.