Holwell Securities Ltd v Hughes
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE RUSSELL,LORD JUSTICE LAWTON |
| Judgment Date | 05 November 1973 |
| Judgment citation (vLex) | [1973] EWCA Civ J1105-4 |
| Date | 05 November 1973 |
| Court | Court of Appeal (Civil Division) |
[1973] EWCA Civ J1105-4
In The Supreme Court of Judicature
Court of Appeal
Civil Division
On appeal from Order of Mr Justice Templeman.
Lord Justice Russell,
Lord Justice Buckley (Not present) and
Lord Justice Lawton
Mr W. A. MACPHERSON, Q. C. and Mr HUBERT PICARDA (instructed by Messrs Brecher & Co.) appeared on behalf of the Appellants (Plaintiffs).
Mr FRANK WHITWORTH, Q. C. and Mr ROGER ELLIS (instructed by Messrs Bulcraig & Davis) appeared on behalf of the Respondent (Defendant).
This case is reported below in 1973 1 Weekly Law Reports, 757, and for the purpose of the appeal from the decision of Mr Justice Templeman I need not rehearse the facts in detail.
It is not disputed that the plaintiffs' solicitors' letter dated 14th April addressed to the defendant at his residence and place of work, the house which was the subject of the option to purchase, was posted by ordinary post in a proper way, enclosing a copy of the letter of the same date delivered by hand to the defendant's solicitors. It is not disputed that the letter and enclosure somehow went astray and never reached the house nor the defendant. It is not disputed that the language of the letter and enclosure would have constituted notice of exercise of the option had they reached the defendant. It is not contended that the handing of the letter to the solicitor constituted an exercise of the option.
The plaintiffs' main contention below and before this Court has been that the option was exercised and the contract for sale and purchase was constituted at the moment that the letter addressed to the defendant with its enclosure was committed by the plaintiffs' solicitors to the proper representative of the postal service, so that its failure to reach its destination is irrelevant.
It is the law in the first place that prima facie acceptance of an offer must be communicated to the offeror. Upon this principle the law has engrafted a doctrine that, if in any given case the true view is that the parties contemplated that the postal service might be used for the purpose of forwarding an acceptance of the offer, committal of the acceptance in a regular manner to the postal service willbe acceptance of the offer so as to constitute a contract, even if the letter goes astray and is lost. Nor, as was once suggested, are such cases limited to cases in which the offer has been made by post. It suffices I think at this stage to refer to ( Henthorn v. Fraser 1892 2 Chancery, 27). In the present case, as I read a passage in the Judgment below at page 764 "D", Mr Justice Templeman concluded that the parties here contemplated that the postal service might be used to communicate acceptance of the offer (by exercise of the option); and I agree with that.
But that is not and cannot be the end of the matter. In any case, before one can find that the basic principle of the need for communication of acceptance to the offeror is displaced by this artificial concept of communication by the act of posting, it is necessary that the offer is in its terms consistent with such displacement and not one which by its terms points rather in the direction of actual communication. We were referred to Henthorn v. Fraser and to the obiter dicta of Mr Justice Farwell in ( Bruner v. Moore 1904 1 Chancery, 305), which latter was a case of an option to purchase patent rights. But in neither of those cases was there apparently any language in the offer directed to the manner of acceptance of the offer or exercise of the option.
The relevant language here is, "The said option shall be exercised by notice in writing to the Intending Vendor …", a very common phrase in an option agreement. There is, of course, nothing in that phrase to suggest that the notification to the defendant could not be made by post. But the requirement of "notice … to", in my judgment, is language which should be taken expressly to assert the ordinary situation in law thatacceptance requires to be communicated or notified to the offeror, and is inconsistent with the theory that acceptance can be constituted by the act of posting, referred to by Anson as "acceptance without notification".
It is of course true that the instrument could have been differently worded. An option to purchase within a period given for value has the characteristic of an offer that cannot be withdrawn. The instrument might have said "The offer constituted by this option may be accepted in writing within six months": in which case no doubt the posting would have sufficed to form the contract. But that language was not used, and, as indicated, in my judgment the language used prevents that legal outcome. Under this head of the case hypothetical problems were canvassed to suggest difficulties in the way of that conclusion. What if the letter had been delivered through the letter-box of the house in due time, but the defendant had either deliberately or fortuitously not been there to receive it before the option period expired? This does not persuade me that the artificial posting rule is here applicable. The answer might well be that in the circumstances the defendant had impliedly invited communication by use of an orifice in his front door designed to receive communications. There is, I consider, a further or perhaps parallel ground for exclusion of acceptance by act of posting in this case, which arises under section 196 of the Law of Property Act, 1925, and in particular subsection (5) which was new in property legislation. It extends the other provisions of the section to "notices required to be served by any instrument affecting property". It was accepted for the plaintiffs that the option instrument was an instrument affecting property. The view of Mr JusticePlowman in Re ( 88 Berkeley Road. N. W.9 1971 Chancery, 648) that "served" meant "given" was not disputed. Subsection (4) of the section provides that such a notice shall be sufficiently served if it is sent by post in a registered letter addressed to the person to be served by name at his abode or place of business, and that, if it is not returned through the post office undelivered, service shall be deemed to be made "at the time at which the registered letter would in the ordinary course be delivered". Later provisions include in this the Recorded Delivery service. These provisions, if applicable to the present case, are of course to be regarded as part and parcel of the option instrument. Being such, they are, it seems to me, inconsistent with the application of the theory of acceptance at the time of posting. For suppose an exercise of the option by a registered letter which went astray, and suppose it to have been posted on the last option day: this section would deem the notice to have been given too late. This conflicts with and therefore negatives the application of a system of acceptance by the act of posting the registered letter, just as would be the case if the option instrument had expressly provided "The said notice in writing if sent by registered post duly etc., etc., shall be deemed to have been given to the Intending Vendor at the time at which etc., etc". Counsel for the plaintiffs frankly accepted the validity of that argument, but contended that this was not the type of notice to which the section was directed. I do not see why it is not. Perhaps in the end his contention was based upon much the same grounds as those upon which he sought to deny the significance of the words "notice in writing to" upon which I have founded thefirst part of this judgment.
This leaves an alternative contention for the plaintiffs which Mr Justice Templeman dismissed with brevity at page 765 "F". When the defendant's solicitors received the plaintiffs' solicitors' letter dated 14th April, set out at page 758 of the report below, they communicated by telephone with the defendant. They did not read the letter to the defendant. The defendant's evidence was as follows: "(Q) Did you then, as a result of that, ring Messrs Bulcraig & Davis? (A) As a result of that, I did, yes. (Q) And to whom did you speak there? (A) I spoke to Mr Wade. (Q) Do you remember what he told you? (A) Yes. (Q) Not the exact words? (A) No. He asked me if I had heard from Messrs Brecher, the other people's solicitors, and I said 'No'. He said 'Well, I have had a letter from them delivered to me today and I understand that you will be getting a letter as well, or a copy of this'. My recollection is that he said 'a letter' but later I understood that what was meant was a copy. And he said: 'I don't think this option is exercised properly until notice is served on you', or 'until you receive a letter', and I said, 'Oh, dear, I had intended to go to Ireland this 'evening. Will it be all right if I do?' and he...
To continue reading
Request your trial
-
Kau Nia Enterprise (Pte) Ltd v Teck Wah Corp (Pte) Ltd
... ... , is not even asserted on behalf of the defendants.The defendants sought to rely on Holwell Securities Ltd v Hughes [1973] 2 All ER 476. It was decided in that case that the mere posting of ... ...
-
George Anthony Hylton v Georgia Pinnock (as Executrix of the Estate of Dorothy Mcintosh, Deceased), Lloyd's Property Development Ltd and Lloyd E. Gibson
...impose a notional assumption of service which is one-third of the deemed service period in the CPR’. He relied on the cases of Holwel Securities Ltd v Hughes [1974] 1 All ER 161 for support of the interpretation he had ascribed to the words ‘notice given’ in the section. He also relied on ......
-
WX Investments Ltd v Begg
...make the provisions pointless and unworkable. 17 This view of section 196(4) seems to be supported by the earlier authorities. In Holwell Securities v. Hughes [1973] 1 WLR 757 Templeman J described the machinery of the subsection in these terms: "the significance of s 196 is this: it assume......
-
Knockacummer Wind Farm Ltd v Cremins
...which renders the option, and the rights conveyed by, ineffectual.' 123 In the subsequent case of Holwell Securities Ltd. v. Hughes [1974] 1 W.L.R. 155, October, 1971, the defendant had granted the plaintiff's six months option to purchase certain property which was to be exercised by 'not......
-
Offer and Acceptance
...a copy of the letter of acceptance was received by the vendor’s 159 Household Fire & Carriage , above note 151 at 224, Thesiger LJ. 160 [1974] 1 WLR 155 (CA) [ Hughes ]. 161 As is indicated by his dissenting opinion in Household Fire & Carriage, above note 151. 162 British & American Telegr......