Baines v Tweddle
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE ROMER,LORD JUSTICE PEARCE |
| Judgment Date | 17 June 1959 |
| Judgment citation (vLex) | [1959] EWCA Civ J0617-2 |
| Court | Court of Appeal |
| Docket Number | 1956. B. No. 80 |
| Date | 17 June 1959 |
[1959] EWCA Civ J0617-2
In The Supreme Court of Judicature
Court of Appeal
On Appeal From The High Court of Jusice Chancery Division
The Master of the Rolls
Lord Evershed) and
LORD Justice Romer and
Lord Justice Pearce.
MR. JOHN E. VINELOTT (instructed by Messrs. Corbin, Greener and Cook, London, Agents for Messrs. Dowling and Hewitt, Bishop Auckland) appeared on behalf of the Plaintiff (Appellant).
MR. A.C. SPARROW (instructed by Messrs. Butt and Sowyer, London, Agents for Messrs. Latimer, Hinks, Marsham and Little, Darlington) appeared on behalf of the Defendant (Respondent).
: This appeal, which has arisen in an action for specific performance of a contract for the sale of land, has raised some points of no little difficulty. The actual question with which alone we must deal may, however, be shortly stated; it is whether in the circumstances which I shall state the Defendant (the Respondent) who was the Vendor under the contract, was entitled to rescind that contract in the way in which, and at the time when, he did. It will be necessary to lay the foundation for what follows with some statement of the facts which must be detailed at any rate as to part of them.
The contract itself is dated the 29th August, 1955. It related to a piece of land illustrated on the plan attached to the contract, plot number 4-22, which was, as we understand, part of a larger area owned by the Vendor; and it was required by the Purchaser in order to be used by him in connection with his other land, for agricultural purposes. The sale, judged by the purchase price, was not one of very great substance; for that price was £580, of which, in accordance with normal practice, £58 was paid by way of deposit. The property is described as follows: "All that close or parcel of ground containing according to the Ordnance Map" a certain area which is identified on the plan "together with a right of way" and so on. Then: "Except and reserved unto the Church Commissioners for England their successors and assigns the mines quarries and minerals in or under the said hereditaments" etc.; "and also except and reserved unto the Vendor and his successors in title and his or their servants workmen and others authorised by him or them the right to enter the said close or parcel of land" for limited purposes.
The contract, after stating the root of title, said further: "The property is sold subject to (a) a proportionate part of a it he Redemption Annuity of £1.6.3." There was no statement of the nature of the interest which the Vendor was to convey, but in the circumstances as I have stated them it cannot be open to any doubt whatever that the bargain was for the sale of the fee simple of the land, unencumbered, subject only to the reservations and qualifications which I have stated. Mr. Sparrow, for the Defendant, has not contended - indeed he could not possibly have contended - otherwise.
At the time when this bargain was made the Vendor had, in fact, executed two mortgages which affected this plot; the first was to a Building Society, the Darlington Building Society, and the total amount outstanding on the mortgage was £2,900-odd. Not only so, but it also emerged that the Vendor had fallen into serious arrears with the instalments payable under that mortgage, five instalments then being outstanding, a total of some £105. In addition, there was a second mortgage or equitable charge on the property, and I assume (although I do not exactly know) other property also, for £600; that mortgage was in favour of a Mr. Solomon Abrahams. It will be appreciated that neither of these encumbrances was referred to in the contract and if, therefore, the Vendor was to perform the contract according to these terms, it would be necessary for him either to discharge the mortgages (or discharge them as far as related to plot 422) or to procure the mortgagees and charges to join in the conveyance to the purchaser.
I must finally state, because it is of great importance, that the situation between the Vendor and the Building Society, namely the fact that he was five instalments in arrears, was obviously one which he in his own mind thought might possibly make the Building Society not entirely amenable to every suggestion which he might make. It appears to have been in his mind somewhat vaguely that Mr. Abrahams would get a small percentage, and that the total purchase price to be received, namely £580, would go to the Building Society. To jump ahead in my introduction, it must be said that when the Building Society were asked if they would assist the Vendor by joining in the conveyance, they flatly refused and from their refusal they have never since, so far as I know, resiled at all.
It is, I think, not entirely insignificant to state that the refusal of the Building Society to assist the Vendor became, according to the Pleadings, known to the Vendor within a very few days after the contract, namely the 1st September. We were informed that the purchaser was told of this particular difficulty a month after the contract. But I note that on the 19th September the Vendor allowed the purchaser to pay the entire balance of the purchase price which was put on deposit in the joint names of the two Solicitors concerned, and the purchaser thereupon, in accordance with a clause in the conditions of the contract, went into possession. As things have turned out, I need not say anything more about that aspect of the case. I understand it was an argument in the Court below that even though the Vendor should be is entitled to rescind he did rightly determine his licence to the purchaser to occupy the land, so as to give him the right to a claim for damages for trespass which is a subject matter of the Counterclaim; but as it has now transpired, it can be taken that if the right to rescind was not available then no such right for damages subsists in favour of the Vendor.
I must now turn to the contract in order to refer to the particular clause which gives rise to this question. By virtue of the contract it self there was incorporated into the contract the Law Society's Conditions of Sale, 1953. That is a substantial document, and clauses 8, 9 and 10 relate to the matter of "Abstract, Requisitions and Power to Rescind". In particular, clause 10 reads as follows: "(1) If a purchaser takes or makes any objection or requisition as to title, conveyance or otherwise which the Vendor is unable or, on the ground of unreasonable expense, unwilling to remove or comply with, and does not withdraw the same within ten days after being required in writing so to do, the Vendor may rescind" subject as therein stated "the contract by notice in writing delivered to the purchaser or his solicitors." Sub-paragraph (2) deals with certain consequences to which I need not allude.
I have said that it became unfortunately, but quite clearly, manifest that this Vendor would not be able to obtain the mortgagees, concurrence in the conveyance. It therefore followed that the best he could do by way of compliance with his bargain was to offer to the purchaser a conveyance of the equity of redemption subject to the Building Society mortgage of nearly £3,000 and to Mr. Abrahams' Second Charge; in other words he could not convey that which he had contracted to convey, namely the unencumbered fee simple. Not only so, but instead of something which I assume would have been worth £580 or thereabouts, the equity of redemption, the subject of these charges, quite clearly would not be worth a penny piece. It is, therefore, not to be wondered at that the purchaser was unwilling to accept as a completion of this bargain a conveyance of the equity of redemption. Accordingly, after the passage of a good deal of time, when, I do not doubt, great efforts were probably made by the Vendor to see if he could persuade the mortgagees to help after all, the Vendor's solicitor wrote the letter which the condition I have read requires, calling upon the purchaser to withdraw the objection within ten days. It will be observed that in order to bring himself within the condition the Vendor has to say that the purchaser is taking or making an objection to the title, conveyance or otherwise, and that if the Vendor is unable or, for the reasons stated, unwilling to comply with the objection and thereupon calls upon the purchaser to withdraw it, then if the purchaser does not withdraw it, his contractual right to rescind arises.
I confess that for my part I felt some doubt whether the situation which arose here between these two contracting parties, fits within the scope of this condition at all. This after all, was not in the ordinary sense an objection or requisition of the kind that arises when Requisitions on Title are delivered; it went to the root of the whole subject matter of the contract. But I shall assume for the purpose of this Judgment that since an encumbrance is clearly something affecting the title, it should be properly said that a refusal by the purchaser to accept a conveyance of the equity of redemption, instead of the unencumbered fee simple which the Vendor had promised to convey, did constitute an objection within clause 10.
Upon that point I should, perhaps add this: We were referred - and it is, for present purposes, really the foundation of the case law on the whole subject matter of this appeal — to the case in this Court of in re Jackson and Haden's Contract, which is reported in 1906 (1) Chancery Division, page 4-12. In that case the Vendor had contracted to sell to the purchaser a villa - a residence - and the terms of the contract made it quite plain that he was contracting to sell the entire interest in the villa and the land on which it stood, including mines...
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