Capital and Suburban Properties Ltd v Swycher

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE BUCKLEY,SIR JOHN PENNYCUICK
Judgment Date13 Feb 1976
Judgment citation (vLex)[1976] EWCA Civ J0213-7

[1976] EWCA Civ J0213-7

In The Supreme Court of Judicature

Court of Appeal

Civil Division

On appeal from Order of Mr. Justice Foster.

Before:

Lord Justice Buckley,

Lord Justice Orr (Not present) and

Sir John Pennycuick

Between:
Capital and Suburban Properties Limited,
Plaintiffs,
-and-
(1) Sonia Swycher,
(2) Dennis David Swycher,
(3) Frank Joseph Kershaw,
(4) Adrienne Shaw Kershaw and
(5) Kershaw Tudor & Company,
Defendants.

Mr. MICHAEL MILLER, Q. C. and Mr. MARTIN REYNOLDS (instructed by Messrs Stowe & Co.) appeared on behalf of the Appellants (Plaintiffs).

Mr. DONALD NICHOLLS, Q. C. and Mr. M. C. C. HART (for Mr. P. St. J. H. LANGAN (instructed by Messrs Bower, Cotton & Bower, Agents for Messrs Kershaw, Tudor & Co., Sheffield) appeared on behalf of the Respondents (Defendants 1 to 4).

LORD JUSTICE BUCKLEY
1

This is an appeal from an Order dated the 18th November, 1975, of Mr. Justice Poster in a vendors' specific performance action (by counterclaim) whereby he declared the deposit paid by the purchaser (the plaintiff company) to have been forfeited, ordered that the vendors(the first four defendants) be at liberty to re-sell the Property and ordered that, should the property be sold on or before the 12th November 1976 for less than the contract price, the purchaser should pay the vendors the difference, after giving credit for the deposit, and the expenses of the re-sale. The Order also vacated the registration as an estate contract of the sale agreement.

2

By an agreement in writing dated the 25th March, 1974, the first four defendants (the vendors) agreed to sell to the plaintiff company (the purchaser) a piece of land fronting to Sa vile Street, Sheffield, with the building on it for £150,000 with certain additional sums as and when the property should be substantially let. The property was expressed to be sold subject to the Law Society's General Conditions of Sale (1973 Revision) with certain modifications which are presently irrelevant. The date fixed for completion was the 25th July, 1974. The property was at the date of the agreement partly let and partly in hand.

3

On the 16th August, 1974, the vendors gave notice to the purchaser under General Condition 19 to complete in accordance with that Condition, that is to say, within 28 days of the service of the notice, time being made of the essence of the contract in this respect. This notice expired on the 17th September, 1974. On the 6th March, 1974, not long before the date of the sale agreement, the Council of the SheffieldMetropolitan District, being the relevant local authority, passed a resolution under the General Rate Act, 1967, section 17, as amended, taking power to impose a general rate on unoccupied property. The vendors did not know of this at the date of the agreement. The resolution was not gazette until the 1st April, 1974.

4

The purchaser did not complete the purchase by the 17th September, 1974. On the 12th September, 1974, the purchaser issued the Writ in the action, alleging that the vendors by an agent had falsely represented that the local authority had not passed any such resolution as aforesaid, and that the purchaser had entered into the agreement in reliance on that representation. They claimed specific performance with an abatement of the purchase price by £27,000 . They also sued the vendors' Solicitors, the last defendants, for damages for negligence.

5

The defendants denied the alleged representation and alleged that they knew nothing about the resolution until notice of it was served upon the vendors on the 29th April, 1974. The vendors counterclaimed for specific performance of the agreement without abatement of the price, damages in lieu of or in addition to specific performance, a declaration of lien, and alternatively rescission, forfeiture of the deposit and a declaration that they were entitled to damages for breach of contract and all the remedies provided by General Condition 19.

6

The defendants applied for summary judgment under Order 86, and on the 3rd December, 1974, the Master made an Order for specific performance. The Order directed, among other accounts and inquiries, an inquiry whether there shouldBe any and if so what abatement of the purchase price on any of the grounds alleged in the Statement of Claim.

7

On the 5th November, 19751 the defendants' summons to proceed under that Order came before Mr. Justice Foster, when, the defendants consenting, the learned Judge ordered that notwithstanding the Order of the 3rd December 1974 the vendors should convey the property to the purchaser on the 12th November 1975 upon payment by the purchaser to the vendors of £126,000 and upon payment by the purchaser into a joint account in the names of the parties of a further sum of £27,000 pending the determination of the accounts and inquiries ordered on the 3rd December 1974 and two further inquiries then ordered by the Judge.

8

The purchaser did not make any payment in accordance with the last-mentioned Order and, except for a deposit of £5,000 paid under the agreement, no part of the purchase price has been paid.

9

By notice of motion dated the 13th November, 1975, the vendors sought a declaration of forfeiture of the deposit, a declaration that they were at liberty to re-sell and an Order that in case the property should be sold for less than the amounts payable to the vendors under the agreement, the purchaser should pay to the vendors the difference (after giving credit for the deposit) together with the expenses of the sale.

10

Upon that motion Mr. Justice Foster on the 18th November, 1975, made the Order now under appeal. The learned Judge unfortunately gave no reasons for his decision. This I consider a most unsatisfactory practice. There are some sorts of interlocutory applications, mainly of a purelyprocedural kind, upon which a Judge exercising his discretion on some such question as whether a matter should he expedited or adjourned or extra time should be allowed for a party to take some procedural step, or possibly whether relief by way of injunction should have been granted or refused, can properly make an Order without giving reasons. This, being an application involving questions of law, is in my opinion clearly not such a case. Litigants are entitled to know on what grounds their cases are decided. It is of importance that the legal profession should know on what grounds cases are decided, particularly when questions of law are involved. And this Court is entitled to the assistance of the Judge of first instance by an explicit statement of his reasons for deciding as he did. In the present case we happen to know from a transcript of the argument what submissions were made" to the Judge. We may infer, but we cannot know, that the Judge preferred those presented by Counsel for the vendors to those presented by Counsel for the purchaser. The Judge ought not to have spared himself the trouble of expressing his reasons for deciding as he did. The purchaser, with the leave of this Court, appeals against so much of the learned Judge's Order as dealt with the contingency of a re-sale of the property on or before the 12th November, 1976, for less than the contract price. This evidently treats General Condition 19(4) as applicable to the circumstances of this case as if the "date fixed for completion" for the purposes of that Condition were the 12th November 1975, the date fixed for completion under the Order of the 5th November, 1975.

11

General Condition 19, so far as relevant in this respect, reads as follows: Paragraphs (l), (2) and (3) relateto the giving of a notice to complete and the effect of giving such a notice, and paragraph (4) is in the following terms: "If the purchaser does not comply with the terms of an effective notice served by the vendor under this condition, then - (a) the purchaser shall forthwith on the expiry of that notice, or within such further period as the vendor may allow, return all abstracts and other papers in his possession belonging to the vendor and at his own expense procure the cancellation of any entry relating to the contract in any register, and (b) without prejudice to any other rights or remedies available to him at law or in equity, the vendor may - (i) forfeit and retain for his own benefit the deposit paid by the purchaser, and (ii) resell the property whether by auction or by private treaty without previously tendering a conveyance to the purchaser, (c) if on any such re-sale contracted within one year from the date fixed for completion the vendor incurs a loss, the purchaser shall pay to the vendor as liquidated damages the amount of such loss, which shall include all costs and expenses reasonably incurred in any such re-sale or any attempted re-sale, subject to the vendor giving credit for any deposit and any money paid on account of the purchase price, but any surplus money shall be retained by the vendor". I do not think I need read sub-paragraphs ( 5) or (6).

12

Before writing this Judgment I have had the advantage of reading the Judgment which Sir John Penny quick will presently deliver. With that Judgment I entirely agree. I wish to add nothing to his Judgment on the first point with which he deals; but as the questions raised by the vendors' new contention on this appeal, that an inquiry should beincluded in the Order what damages they have suffered by reason of the purchaser's failure to complete the agreement, are not without importance and are not dealt with altogether explicitly in reported cases, it may perhaps be useful if I state in my own words and as succinctly as I can the principles which seem to me to be involved.

13

If, time having been made of the essence of a contract for a sale of land, the purchaser does not...

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33 cases
  • Johnson v Agnew
    • United Kingdom
    • House of Lords
    • 8 March 1979
    ...payment of the full purchase price. The second claim was not pressed, on the ground that it was precluded by authority ( Capital and Suburban Properties Ltd v. Swycher, [1976] Ch.319 7The vendors appealed to the Court of Appeal who again rejected each alternative: they followed the previou......
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    • United Kingdom
    • Court of Appeal (Civil Division)
    • 13 December 1977
    ...asked for under (2), presumably on the ground that he felt inhibited from doing so by the decision of this Court in Capital and Suburban Properties Ltd. v. Swycher (1976) 1 Chancery, 319, out he reserved the right to pursue that relief in the event of an appeal. The learned Vice-Chancellor ......
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    • United Kingdom
    • Court of Appeal (Civil Division)
    • 10 February 1978
    ...That is a word which is capable of more than one meaning, as was recently pointed out in this court in Capital & Suburban Properties Ltd. v. Swycher, (1976) Chancery, 319, a decision which has since been reinforced by a decision of this court in Johnson v. Agnew, decided on 13th Decemb......
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