Griffiths v Young
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE RUSSELL,LORD JUSTICE WIDGERY,LORD JUSTICE CROSS |
| Judgment Date | 24 June 1970 |
| Judgment citation (vLex) | [1970] EWCA Civ J0624-1 |
| Date | 24 June 1970 |
| Court | Court of Appeal (Civil Division) |
[1970] EWCA Civ J0624-1
Lord Justice Russell
Lord Justice Widgery and
Lord Justice Cross
In The Supreme Court of Judicature
Court of Appeal
From: Mr. Justice Goff (Chancery Div., London)
MR. E.G. NUGEE (instructed by Messrs. Vintners, Cambridge) appeared on behalf of the Appellant (Defendant).
MR. GUY SEWARD (instructed by Messrs. Robbins, Olivey & Lake, W.C.2, Agents for Messrs. Bedall & Sons, Mildenhall) appeared on behalf of the Respondent (Plaintiff).
I will ask Lord Justice Widgery to give the first Judgment.
This is an appeal from a judgment of Mr. Justice Goff whereby he made a decree of specific performance in favour of the Plaintiff of a contract of sale of land in the New market area of Suffolk. The Plaintiff and the Defendant were both substantial landowners in this part of Suffolk, and they had known each other for a very considerable time. Indeed, there had been previous transactions of sale andpurchase of land between them, notably a number of occasions like the present where Mr. Griffiths, the Plaintiff, had bought small areas from Mr. Young.
The mutual interest of the parties in a transaction in relation to this land seems to have arisen in the early part of 1963, or perhaps the latter part of 1962. Mr. Young was not very anxious to complete a contract of sale promptly because a local authority was in process of acquiring some of his land compulsorily and he seems to have thought, perhaps with good reason, that if he sold off these particular acres to Mr. Griffiths he would prejudice his claim for compensation for severance. Accordingly progress towards a contract seems to have been made very slowly at that time. However, matters began to come to a head on 30 April, 1963, when Mr. Young told the Plaintiff, Mr. Griffiths, that he, Young, was, temporarily at any rate, short of money, and asked for a loan of £3,000. Mr. Griffiths declined to make a loan. Then Mr. Young suggested that perhaps, instead, Mr. Griffiths would guarantee his overdraft with his bank. Mr. Griffiths' reaction to that was that he would be prepared to consider giving a guarantee on Mr. Young's account if Mr. Young, on his part, would agree to sell these particular acres, the broad terms of the intention being that if Mr. Griffiths was called upon to pay off the overdraft pursuant to his obligation under the guarantee he would be able to set off that amount against the purchase price of the land.
The parties seem to have moved a considerable way towards agreement on this day, 30 April, but Mr. Griffiths wanted some professional advice as to the nature of an obligation under a bank guarantee and so, on 1 May, they both went to Mr. Griffiths' bank manager. He no doubt explained to them the consequences and peculiarities of guarantee procedure of an overdraft, but he also made the wise observation to Mr. Griffiths that Mr. Griffiths should go and see his solicitor before doing any more. The parties left the bank, they sat for a time in amotor car outside, they thrashed out as best they could all the details of the sale, which included, I may say, a provision that completion should not take place until 29 September, 1964, the following year. The reason for postponing completion until that date was Mr. Young's apprehension about the effect of the sale on his severance claim.
Having reached the point when they had dealt with all the matters which they seemed competent to deal with, Mr. Griffiths said he would go and see his solicitor, who was a Mr. Smart, about this matter, and tell him to get on with it, and Mr. Young I think implicitly, if not expressly, said lie would go to see his solicitor, Mr. Tucker, as well.
On 2 May, the next day, Mr. Griffiths, true to his promise, went and saw Mr. Smart, his solicitor, obviously gave him details of the proposed transaction and told him to act, and without any loss of time Mr. Smart on that same day, 2 May, 1963, wrote a letter to the proposed vendor's solicitors. I do not find It necessary to read the letter in detail, because it is a letter in a common form, written by a solicitor who is recording the terms of an agreement made by his client for the purchase of land. The price is specified, the land is fully identified, but the price is expressed to be - and this is Important - "subject to contract". Having dealt with the details of the proposed sale, Mr. Smart went on in the final paragraph to say: "You will no doubt seek confirmation of these instructions from your Client and to assist you in this we are enclosing a carbon copy" of the letter. He concludes with this phrase: "We shall await hearing from you in due Course with a draft Contract for approval". There can, I think, be little doubt that what was In Mr. Smart's mind at that time was that the sale was to take place under the ordinary conveyancing procedure whereby a formal contract would be prepared and the whole matter would remain subject to contract until that formal contract had been approved, signed andexchanged.
That letter was received by Mr. Tucker in his office in London on the following day, 3 May. and he wrote a brief acknowledgment saying: "We thank you for your letter of the 2nd instant and we have heard from Mr. Young about the arrangements, and will be writing to you on Monday".
However, other events were on the move on 3 May, because it is common ground that Mr. Young was anxious lest the provision of his bank guarantee might be unduly delayed, and he approached Mr. Griffiths on 3 May to see if matters could not be hastened along. Mr. Griffiths gave evidence to this effect - and this was net challenged, because Mr. Young did not give evidence. Mr. Griffiths was asked what happened on 3 May and said: "Mr. Young telephoned me and said that he badly needed the overdraft facilities, and we had had a bargain, and he could not see why I did not get on and sign it". Mr. Griffiths, without disclosing in detail what had passed between him and his own solicitor, Mr. Smart, said that he would go back to Mr. Smart and see what could be done to hurry it along.
It is evident he did that, because later on on 3 May - that is, later than the writing of the letter from Mr. Tucker to which I have referred - Mr. Smart rang Mr. Tucker up about this matter. What passed in the course of that telephone conversation is the central issue of fact in this case, hotly debated in the Court below and as hotly argued before us. I shall have to come back presently to consider the nature of the controversy in a little more detail, but in effect it was this. Mr. Smart said that his object in telephoning Mr. Tucker was to point out that if Mr. Young was to have his bank guarantee at once there must be a binding contract of sale at once. Accordingly Mr. Smart says that, in speaking to Mr. Tucker, he pointed out that a concluded contract must be completed immediately and that his own letter of the previous day, which referred to the arrangement being subject to contract, must tothat extent be treated as amended. Mr. Tucker, in giving his version-of what happened in the course of this conversation, said that his understanding was quite different. He was under the impression, from what Mr. Smart had said, that all that Mr. Smart was seeking on behalf of his client was an assurance that the main terms of the bargain were agreed and, furthermore, that Mr. Young was genuinely and sincerely intending to go through with the contract. It was put in argument in this way, that Mr. Tucker thought that nothing more than a gentleman's agreement was contemplated, but that the would-be purchaser did require an assurance that nothing was outstanding on the major terms end that there was a genuine intention on Mr. Young's part to go through with the transaction in the ordinary way and in his own time.
That was the conflict between these two gentlemen in the evidence which they gave, and, as will appear in a moment, the learned Judge accepted the version given by Mr. Smart, and accepted that the substance of the transaction was an unconditional offer, made by Mr. Smart on behalf of his client, to buy on the bare terms already agreed and to conclude a binding contract there and then.
What In fact happened following that telephone conversation was that Mr. Tucker, having spoken to his client Mr. Young, wrote a second letter, also dated 3 May, 1963, and it is in these terms: "With reference to your letter of the 2nd instant, we confirm that we have received instructions from Mr. Young to sell the property mentioned in your letter to Mr. Griffiths for £3,500 with completion at Michaelmas twelve month, but if Mr. Griffiths is asked to redeem his guarantee for this amount before this date, then completion shall take place immediately after such payment has been made by the Bank",
I should have said earlier that this minor adjustment in the date of completion was a matter spoken to by Mr. Smart as having been raised in the course of this conversation whichhe had had with Mr. Tucker.
That letter evidently satisfied Mr. Smart, because the guarantee was duly given by Mr. Griffiths on 7 May. After that the matter went to sleep for a considerable time.
The next letter on the correspondence is a letter of 25 June, 1963, from Mr. Smart to Mr. Tucker, in which he apologises for having allowed the matter to lapse, and suggests that a draft contract for approval should new be forwarded "so that the details of this transaction can be clearly established with a view to completion at Michaelmas 1964".
Between that letter, which, as I say, was written at the end of June, and the date when matters in this action really came to a head, there is a further desultory correspondence taking place between Mr. Smart and Mr. Tucker...
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...between themselves in any other way. It is in this regard that the facts here are different from the facts in Griffiths v Young [1970] 3 All ER 601 and the decision of Winslow J in Yeo Long Seng v Lucky Park (Pte) Ltd [1971] 1 MLJ 20 . In my judgment the exchange of letters between the soli......
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Mulhall v Haren
...would be made to dislodge the well entrenched "subject to contract" rule. 37 The first bridge-head was effected in Griffith .v. Young (1970) Ch. 675. The plaintiff in that case wished to buy a plot of land from the defendant, who was not anxious to complete the contract of sale immediately......