Alchemy Estates Ltd v Astor and another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Sales |
| Judgment Date | 05 November 2008 |
| Neutral Citation | [2008] EWHC 2675 (Ch) |
| Docket Number | Case No: HC08C01712 |
| Court | Chancery Division |
| Date | 05 November 2008 |
[2008] EWHC 2675 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Sales
Case No: HC08C01712
Mr Edward Francis (instructed by Vizards Tweedie) for the Claimant
Mr Martin Hutchings (instructed by Iliffes Booth Bennett) for the Defendants
Hearing dates: 6.10.08 – 8.10.08
Mr Justice Sales:
This is an application under CPR Part 24 for summary judgment, alternatively for determination of certain preliminary issues. The application is made by the Defendants to the claim. By it they seek resolution of points of construction on a contract of sale dated 15 January 2008 between the Claimant and the Defendants of a long-term leasehold (“the Contract”) and specific performance of the Contract. The Contract relates to leasehold property at 27 Walton Street, London SW3 3AQ (“the Property”). The Defendants, Judith Astor and Polly Astor (“the Astors”), are the personal representatives of Joan Antoinette Valerie Shorter. At her death Ms Shorter was the registered proprietor of the Property. She held the Property under a lease dated 30 June 1977 between Viscount Chelsea as lessor, the Chelsea Land and Investment Company Limited (“the Company”) and Guy Shearer as lessee, (“the Lease”). The background to the present proceedings is the falling property market in the current economic climate.
The Claimant, Alchemy Estates Limited (“Alchemy”), is a small property development company. Alchemy had been interested in acquiring the Property for a period before the Contract was eventually entered into in January 2008. On 28 November 2007, the solicitors for Alchemy, Vizards Tweedie LLP (“Vizards”), wrote to Iliffes Booth Bennett (“IBB”), the solicitors for the Astors, to confirm that they were instructed in relation to the proposed purchase of the Property at a price of £1,311,525. On 30 November 2007 IBB sent to Vizards a pack of relevant documentation relating to the Property, including a draft contract. There were then exchanges concerned with enquiries before contract. The terms of the contract were essentially agreed in the course of these exchanges in late 2007. It was agreed that the main framework for the Contract would be based on the Standard Conditions of Sale (4 th edition). IBB provided in addition a set of special conditions. These appear to have been based upon a general precedent rather than being directly formulated by reference to the particular circumstances of this transaction. Vizards for their part proposed the addition of what became special condition 22.
The terms of the proposed agreement were all agreed subject to contract by 10 January 2008, but on that date Vizards wrote to IBB to say that, although their client was prepared to enter into the agreement on the terms which had been negotiated, it would only do so if a significant reduction in the price was accepted. They referred to the economic storm clouds which were gathering, and offered a revised sum of £1,265,525 as “a more realistic price”. Vizards asked IBB to take their clients' instructions on this new proposed contract. Meanwhile IBB continued to seek information from Olswang, the solicitors for the landlord, in order to deal with certain outstanding matters which needed to be resolved apart from agreement on the price. On 14 January 2008 IBB wrote to Vizards to say that the Astors would accept the reduced price. IBB sent a slightly amended version of the contract to Vizards for signature by Alchemy. The Contract in its final form was exchanged on 15 January 2008. Upon exchange, Alchemy paid the deposit of £126,152.50.
The Lease contained lessee's covenants in the following terms at clause XVIII:-
“a) Not to assign, transfer, underlet or part with possession of part only of the demised premises
b) Not to assign, transfer, underlet or part with possession of the demised premises as a whole (except by way of mortgage or charge) without the previous consent in writing of the Company, such consent not to be unreasonably withheld
PROVIDED, however, that should the Lessee desire to assign the demised premises to a limited company, the Lessee shall, before such assignment (if required to do so by the Company), procure that two directors thereof (or two other persons first approved by the Company) as sureties for the limited company enter into a joint and several covenant with the Lessor and the Company that so long as the term hereby granted is vested in the limited company they will pay and make good to the Lessor and the Company all losses costs and expenses sustained by the Lessor or the Company through the default of the limited company to pay the rent hereby reserved or the failure of the limited company to observe and perform the Lessee's covenants and conditions herein contained.”
Clause XIX provided:
“That every assignment of the demised premises as well as every Grant of Probate or Administration Mortgage or Charge Transfer Assent Underlease assignment of Underlease (where underletting is permitted under the terms of this Lease), Order of the High Court of Justice or other document affecting the demised premises or part thereof or the term hereby granted or (where underletting is permitted under the terms of this Lease) the term granted by any Underlease shall, within 21 days after the execution or date thereof respectively, be left for registration at the Registered Office of the Company together with notice thereof in writing and that the Lessee will pay a fee of £2 for every such registration, such fee to be increased to £3 if such document be not left at the said office within the said period of 21 days.”
The Contract provided for a completion date of 13 March 2008 or earlier by agreement. It incorporated the Standard Conditions of Sale (4 th edition). The Contract also contained the agreed special conditions. Part of the difficulty of construing the terms of the Contract relates to the interaction between the special conditions overlaid as they were upon the Standard Conditions.
The Standard Conditions included the following provisions:
“4.1.1 Without cost to the buyer, the seller is to provide the buyer with proof of the title to the property and to his ability to transfer it, or to procure its transfer. …
6.1.1 Completion date is 20 working days after the date of the contract but time is not of the essence of the contract unless a notice to complete has been served.”
The specific contractual stipulation that the completion date was to be 13 March 2008 overrode the provision as to the timing of the completion date in condition 6.1.1, but the provision that time should not be of the essence of the Contract remained part of the agreement between the parties. Other standard conditions included the following:
“6.8.1 At any time on or after completion date, a party who is ready, able and willing to complete may give the other a notice to complete.
6.8.2 The parties are to complete the contract within 10 working days of giving a notice to complete, excluding the day on which the notice is given. For this purpose, time is of the essence of the contract.”
Condition 7.5 made provision in relation to the buyer's failure to comply with a notice to complete, providing that the seller could then rescind the contract, forfeit and keep any deposit with accrued interest, resell the property and claim damages. Condition 7.6 dealt with the seller's failure to comply with a notice to complete, providing that, in that case, the buyer may rescind the contract and require the deposit to be repaid with interest.
Section 8 of the Standard Conditions is headed “Leasehold Property”. Condition 8.3, headed “Consent”, is central to the present case. It provides:
“8.3.1 (a) The following provisions apply if a consent to let, assign or sub-let is required to complete the contract.
(b) In this condition “consent” means consent in the form which satisfies the requirement to obtain it.
8.3.2 (a) The seller is to apply for the consent at his expense, and use all reasonable efforts to obtain it.
(b) The buyer is to provide all information and references reasonably required.
8.3.3 Unless he is in breach of his obligation under condition 8.3.2, either party may rescind the contract by notice to the other party if three working days before completion date (or before a later date on which the parties have agreed to complete the contract):
(a) the consent has not been given, or
(b) the consent has been given subject to a condition to which a party reasonably objects. In that case neither party is to be treated as in breach of contract, and condition 7.2 applies.”
Condition 7.2 provides that if either party rescinds the contract then, in the absence of breach of contract by the buyer, the deposit is to be repaid to the buyer with accrued interest and the buyer is to return any documents he received from the seller and is to cancel any registration of the contract.
The special conditions attached to the Contract reiterated at condition 1(a) that “this contract incorporates the Standard Conditions of Sale (4 th edition)”; and provided at condition 1(b) that “the terms used in this Contract have the same meaning when used in the [Standard] Conditions.” Clauses 5 and 11 of the special conditions made specific provision to amend or disapply terms stipulated in the Standard Conditions. There was no specific provision disapplying or amending clause 8 of the Standard Conditions. However, clause 16 of the special conditions provided:
“The Buyer will comply with all requirements of the Lease in relation to its assignment to him and shall where necessary enter into all documents required by the Landlord but at the Buyer's own expense and the Seller shall not be required...
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