Domb v Isoz
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BUCKLEY,LORD JUSTICE BRIDGE,LORD JUSTICE TEMPLEMAN |
| Judgment Date | 29 November 1979 |
| Judgment citation (vLex) | [1979] EWCA Civ J1129-6 |
| Docket Number | 1978 D No.464 |
| Court | Court of Appeal (Civil Division) |
| Date | 29 November 1979 |
[1979] EWCA Civ J1129-6
Lord Justice Buckley
Lord Justice Bridge and
Lord Justice Templeman
In The Supreme Court of Judicature
Court of Appeal (Civil Division)
On Appeal from The High Court of Justice
Chancery Division
Group A
(MR. BRIAN DILLON Q.C. Sitting as a Deputy High Court Judge)
MR. PETER MILLETT Q.C. and MR. ROGER TOULSON (instructed by P Messrs. Reynolds Porter Chamberlain & Co7, Solicitors, London WC1V 7HA) appeared on behalf of the Plaintiffs (Appellants).
MR. GERALD GODFREY Q.C. and MR. NICHOLAS STUART (instructed by Messrs. Royds Barfield, Solicitors, London WC1B 3DX) appeared on behalf of the Defendant (Respondent).
In this action the plaintiffs, Mr. and Mrs. Domb, sue as purchasers for specific performance of a contract of sale by the defendant, Dr. Isoz, to them of property known as 34 Erskine Hill, London, N.W.11. Alternatively they claim damages for breach of contract. The action was tried before Mr. Justice Dillon, sitting at that time as a deputy Judge of the Chancery Division, on 31st July 1978. At that stage the plaintiffs were seeking specific performance of the contract. The learned deputy judge dismissed the action on the ground that there was no concluded contract. The plaintiffs appeal from that dismissal. Since judgment they have bought another house and consequently at the opening of this appeal the plaintiffs elected to seek damages rather than specific performance.
The contract in question formed one of a chain of transactions, as so frequently occurs nowadays when domestic accommodation is being disposed of on the market; there were three transactions involved. The plaintiffs were proposing to sell their house, No. 38 Chelmsford Square, Willesden, to a Mr. Petsas. The plaintiffs' solicitors acting in that matter were the firm of Yudolph & Brooke and the partner in that firm who was acting for the plaintiffs in the matter was a Mr. Redstone. Mr. Petsas' solicitors were Messrs. Lickfolds. The plaintiffs were proposing to acquire 34 Erskine Hill from the defendant, and in that matter again Mr. Redstone was acting for the plaintiffs. The defendant was represented by the firm of William Heath & Co. in the person of a Mr. Bond, who was a salaried solicitor employed by that firm.
The defendant was proposing to acquire a. flat or maisonette in Westbourne Terrace, London, from a Mr. Holding. In respect of that transaction Mr. Bond was the solicitor acting for thedefendant and, by coincidence, Messrs. Yudolph & Brooke were the solicitors acting for Mr. Holding. But it was not Mr. Redstone who was acting for Mr. Holding; it was Mr. Brooke, another partner in that firm. I shall refer to those three transactions as the first, the second and the third transaction. This action relates to the second transaction.
On 22nd December 1977 Mr. Redstone wrote a letter to Mr. Bond (for the sake of simplicity I shall refer to them by their individual names rather than by the names of their firms) in relation to the second transaction. In that letter he said: "We enclose herewith our clients' part of the contract together with their cheque in your favour for £2,950 the balance of the deposit the sum of £300 being held by Messrs. Benham & Reeves your clients' Agents".
Then there comes a passage which relates to a separate matter, but I shall read it now while I am on the letter: "We are instructed that there are included in the sale for the avoidance of doubt the following: (1) Garden shed. (2) All bathroom fittings. (3) All kitchen fitted units including wall and floor units, electric hob and the wall oven. Our clients are of the opinion that the reasonable value that may be ascribed to the above fixtures and fittings is £2,500 and would you, therefore, please confirm that the price of £32,500 may be apportioned as to £30,000 for the property and £2,500 for the above mentioned items. The transfer from your client to our clients will then be at £30,000".
Then I omit two irrelevant short paragraphs and read on: "Would you please hold the enclosed contract and deposit cheque to our order until we are able to agree with you on the telephonethat contracts may be exchanged and agree a completion date which we are fairly fluid on as we should be receiving in the course of the next day or so our clients' contract for the sale of their present property and we wish to effect simultaneous exchange of contracts on both transactions".
Immediately before 9th February 1978, which was a crucial date in the history of this matter, the position with regard to the three transactions was as follows; I read from the judgment of the learned judge: " The First Transaction. On 20th December, 1977s Messrs. Lickfolds had sent to Mr. Redstone the part of the contract for the purchase of 38 Chelmsford Square signed by Mr. Petsas and a cheque for the deposit. They had expressed eagerness on Mr. Petsas' part for early completion and had authorised Mr. Redstone to exchange at any time by inserting a completion date 14 to 28 days from exchange and sending the vendors' part. Subsequently, by further letters, Messrs. Lick-folds had sought to put a degree of pressure for an early exchange on the Plaintiffs. By 9th February, Mr. Redstone had in his hands the part of this contract signed by the Plaintiffs and was in a position to exchange if he could tie up the second transaction.
" The Second Transaction. On 22nd December, 1977, Mr. Redstone sent to Messrs. William Heath and Company the part of the contract for the purchase of 34 Erskine Hill signed by the Plaintiffs and a cheque for the deposit. The relevant paragraph of his letter reads as follows" - and then the learned judge read a passage from the letter I have just referred to, and the judgment goes on: "By 9th February, Mr. Bond of William Heath and Company had in his hands the part of this contract signedby the Defendant and was in a position to exchange if he could tie up the third transaction. There was, in fact, a difference between the part of the contracts signed by the Plaintiffs and the part signed by the Defendant; this raises an entirely separate point to which I shall refer later.
" The Third Transaction The title to 40 Westbourne Terrace was sub-under leasehold and a bit complicated although registered. Mr. Bond had had some difficulty in getting hold of documents which he needed to see before he would agree to an exchange of contracts. Mr. Brooke did not hold these documents since he had not acted on Mr. Holding's purchase. Accordingly, Mr. Bond had got in touch with the solicitors who had then acted and on the morning of 9th February, he received from them the documents he wanted. He had in his hands the part of this contract signed by the Defendant and he had been told by the Defendant that Mr. Holding had told her that 2nd March, 1978 would be acceptable to Mr. Holding as a completion date. Mr. Bond did not, however, know that Mr. Brooke had not yet received Mr. Holding's signed part of the contract. Moreover, though Mr. Bond believed from what the Defendant had told him that Mr. Holding would have told Mr. Brooke that 2nd March was an acceptable completion date, I am not satisfied that Mr. Holding had in fact mentioned this date to Mr. Brooke".
On 9th February 1978 Mr. Bond telephoned Messrs. Yudolph & Brooke and spoke in the first instance to Mr. Brooke. He told Mr. Brooke that he had received the outstanding documents, and there was some discussion about inspection of the register and the obtaining of evidence that there was no encumbrance affecting the title. At that stage Mr. Bond asked to be transferred toMr. Redstone, and the switchboard at Yudolph & Brooke's transferred Nr. Bond to Mr. Redstone and another conversation took place between them. According to the learned judge's findings, Mr. Bond and Mr. Redstone agreed 2nd March 1978 as the completion date for the second transaction. Mr. Redstone then proposed that the contracts should be treated as immediately exchanged by telephone as of the moment they were speaking, and that this should be irrevocable and without benefit of second thoughts; and Mr. Bond, fully understanding that proposal, agreed to it.
Mr. Bond was then transferred back again by the switchboard to Mr. Brooke, and some reference was made between them to 2nd March as a proposed completion date for the third transaction; Mr. Brooke said that he would have to obtain instructions about that from Mr. Holding. I should observe here that after that conversation Mr. Redstone despatched to Messrs. Lickfolds the plaintiffs' part of the contract for the sale comprised in the first transaction, and Mr. Bond, on that same day, dictated a letter in the following terms addressed to Messrs. Yudolph & Brooke: "Dear Sirs, Re: 34 Erskine Hill, N. W. 11. As arranged, we enclose our client's signed part of the Contract having dated both as of 9th February and having inserted in each as the completion date 2nd March next as arranged". Mr. Brooke made contact with Mr. Holding and was instructed by Mr. Holding to insist on a six-week completion period, with the consequence that he was unable to comply with Mr. Bond's request that the completion date for the third transaction should be 2nd March, and with the ultimate result that the contract between Mr. Holding and the defendant went off, and the defendant neversucceeded in acquiring the premises in Westbourne Terrace.
The learned judge took the view that the effect of the conversation on the telephone of 9th February between Mr. Bond and Mr. Redstone was that they thereby purported to dispense with exchange of the contracts relating to the second transaction, and to bind their clients immediately to a contract in the terms of the documents which they had already...
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