Buckland v Farmar & Moody
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BUCKLEY,LORD JUSTICE GOFF |
| Judgment Date | 10 February 1978 |
| Judgment citation (vLex) | [1978] EWCA Civ J0210-3 |
| Docket Number | 1975 B No. 2658 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 February 1978 |
[1978] EWCA Civ J0210-3
Lord Justice Buckley
Lord Justice Goff
and
Lord Justice Cumming-Brruce
In The Supreme Court of Judicature
Court of Appeal
On Appeal from the High Court of Justice
Chancery Division
Group A
(His Honour Judge Finlay Q.C., Sitting as an additional judge of the Chancery Division)
MR. JOHN MacDONALD Q.C. and MR. C.L. PURLE (instructed by Messrs. Gouldens, Solicitors, London) appeared on behalf of the Plaintiffs (Appellants).
MR. P.K. DILLON Q.C. and MR. J.A. MONCASTER (instructed by Messrs. L. Watmore & Co., Solicitors London) appeared on behalf of the Defendants (Respondents).
In this action the plaintiffs, Mr. Buckland, Mr. Dailey and Mr. Edwards, sue a firm of solicitors, Messrs. Farmer & Moody, for damages for negligence in relation to an excursion which the plaintiffs made into the field of property speculation in 1973.
On 19th September of that year a contract was entered into between a company called Marldec Property Co. Ltd. of the one part and the three plaintiffs of the other part for the sale by Marldec Property Co. Ltd. to the plaintiffs of a property at Margate at the price of £135,000. The contract incorporated the National Conditions of Sale, 18th Edition, so far as they were applicable to a sale by private treaty and were not varied by, or inconsistent with, the terms of the contract, save that the rate of interest payable on the purchase price outstanding was to be 9 per cent instead of 5 per cent.
The solicitors acting for the vendor company were a firm called Bellamy, Bestford & de Lattre, and the member of that firm who was actually concerned with this transaction was Mr. Bestford. The solicitors acting in the transaction for the plaintiffs were the defendant firm, Farmer & Moody, and the particular member of that firm advising the plaintiffs was Mr. Moody. The moving spirit in Marldec Property Co. Ltd. was a Mr. Bowl, and the learned judge proceeded upon the footing that for all practical purposes Mr. Bowl could be regarded as the vendor; certainly he was the mind and the voice of the vendor company in relation to this transaction. The late for completion was not stated in the contract, but was later agreed as being 31st October 1973.
The plaintiffs had not had the prescience to provide themselves with finance sufficient to provide the purchase price of the propertyindeed, they had considerable difficulty in mustering the deposit of £13,500 which was paid. In consequence of their difficulties they did not complete on 31st October 1973, and on 2nd November 1973 Mr. Bestford, acting as solicitor for the vendor, served a notice to complete which, it is common ground, expired on 1st December 1973 at the latest; it was a notice requiring completion within 28 days from the date of the notice, which was 2nd November 1973; it was served by post and the learned judge expressed doubts whether in those circumstances it really was a 28-day notice in accordance with Condition 22 of the National Conditions of Sale incorporated in the contract. But whether or not it was a notice which complied with the terms of that condition, it is common ground between the parties that the effect of the notice to complete was to make time of the essence of the contract for completion not later than 1st December 1973.
The plaintiffs, attempting to escape from their financial difficulties, were introduced to a gentleman about the spelling of whose names there seems to be some doubt; he is sometimes spelt M-a-i-n-i and sometimes M-i-a-n-i, but he has been referred to throughout the appeal as "Mr. Miani". They were introduced to him by Mr. Bestford, he being one of Mr. Bestford's clients. He comes on the scene in this story on, or shortly before, 20th November 1973, and it was first proposed that he should come in with the plaintiffs to participate in the purchase of the property with a 40% share in the venture. But at a later stage he became unwilling to do that, and the proposal was then put forward that he should take over the whole contract from the plaintiffs with the benefit of the deposit which they had paid, and should indemnify them against further liability under the contract, so that although the plaintiffs wouldStill remain primarily liable under the contract, they would be able to seek indemnity from Mr. Miani if he failed to complet it.
On 20th November Mr. Moody wrote to Mr. Bestford a letter in which he referred to the first Miani project, that is to say, the proposal that Mr. Miani would come in for a 40% share in the venture; and in the final paragraph of that letter Mr. Moody wrote: "With so little time to spare we think it unlikely that we shall be in a position to comply with your notice to complete, but we understand our client has spoken to your client on the matter direct and provided that substantial progress has been made towards a satisfactory mortgage your client will not insist on completion by the date specified in your notice". The words "our client" there evidently refer to Mr. Edwards, one of the plaintiffs.
In fact no substantial progress, or indeed any progress at all, was at any time made towards obtaining a mortgage, and accordingly, even if what is written in that letter be accurate, which may be doubtful, the condition of not insisting on completion by the date specified in the notice to complete there referred to was never satisfied.
On 30th November 1973 a meeting took place, by arrangement, at Mr. Bestford's office. That meeting was attended by Mr. Edwards and Mr. Dailey, another of the plaintiffs, by Mr. Miani and by Mr. Bestford acting as solicitor for the vendor company, and presumably also as solicitor for Mr. Miani. The plaintiffs, as purchasers, had expected that at that meeting Mr. Miani would provide the purchase monies and pay them over to Mr. Bestford, but that did not take place. It was suggested that the assignment of the contract to Mr. Miani should then be executed, but Mr. Bestford advised the purchasers that they should have separate legal advice on the formof the assignment. That was no doubt very proper advice, the document having been in fact prepared by Mr. Bestford.
During this meeting Mr. Miani had a conversation with Mr. Bowl which was not overheard by Mr. Edwards or Mr. Dailey. In the course of that conversation Mr. Miani said that he would complete the purchase within a week, and it would seem possible that at that time there was some kind of agreement between Mr. Miani and Mr. Bowl that the price which Mr. Miani should pay in satisfaction of the purchase price should not be £135,000, but £125,000, and Mr Bowl was apparently agreeable to Mr. Miani's postponing completion for the period of a week which, as the learned judge found in his judgment, Mr. Bowl understood to mean within a week ending on Thursday 6th December. However, Mr. Miani did not complete within that week, and on 13th December a further agreement was reached between Mr. Bowl and either Mr. Miani or Mr. Bestford acting for Mr. Miani, to allow Mr. Miani until 28th January 1976 to complete the purchase. The learned Judge found that the plaintiffs in the present action, the purchasers, were ignorant about the telephone conversation between Mr. Miani and Mr. Bowl on 30th November, and were also ignorant about the agreement extending the time for completion to 28th January 1976, which was reached on 13th December. He also found that Mr. Moody knew nothing about these matters.
Mr. Miani still did not complete the purchase and consequently, on 7th February 1974, Mr. Bestford wrote to Mr. Moody a letter in the following terms: "Re: Site at Margate. It does seem now that despite the extra time given to Mr. Maini by our clients that he is unable to make arrangements to take over this transaction. Accordingly we have received instructions from our clients to formally rescind the Contract, your clients not having been able to completewithin the period of the Notice to Complete and the extension granted thereunder.
"Our clients have instructed us as follows:- (1) By reason of the failure of your clients to complete our clients are probably adversely affected by the new taxation legislation. (2) Interest is payable at the rate of 9% under the terms of the Contract. (3) Our clients have lost the amount of interest it is necessary to pay the Bankers until the property is finally sold. It is appreciated that this is difficult to calculate and our clients have therefore suggested that they are prepared to settle the matter by means of a payment by your clients of £20,000.00 in full and final settlement. This offer is of course made without prejudice and should your clients not agree to settle this on these terms our clients must reserve the right to proceed to the extent of their full losses". Consequent on the receipt of that letter, Mr. Moody advised his clients that the contract was no longer in existence and that if they succeeded in finding a subpurchaser, they would have to renegotiate the terms with the vendor.
At about this time Mr. Bowl changed his solicitors - or rather, I suppose, the solicitors acting for the plaintiff company.
A little later, in July of 1974, proposals were on foot for the contract to be revived between the vendor company and the present plaintiffs, on new terms as to interest, but otherwise, I gather, substantially on the terms of the previous contract. The plaintiffs consulted Mr. Moody about this situation; on 15th July Mr. Moody advised them by letter as follows: "I am sure you can lose nothing by accepting except a certain amount of interest and on the other hand if the present proposition means that the contract is still force this will give you...
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