Irwin v Wilson
| Jurisdiction | England & Wales |
| Judge | Sir William Blackburne |
| Judgment Date | 23 February 2011 |
| Neutral Citation | [2011] EWHC 326 (Ch) |
| Court | Chancery Division |
| Date | 23 February 2011 |
| Docket Number | Case No: CH/2010/0459 |
[2011] EWHC 326 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir William Blackburne
Case No: CH/2010/0459
Gregory Hill (instructed by Hutchinson Mainprice) for the Appellants
Timothy Carlisle (instructed by Colemans Solicitors LLP) for the Respondent
Hearing dates: 3 February 2011
Sir William Blackburne :
Introduction
This is an appeal against a decision of His Honour Judge Madge sitting in the Central London County Court on 16 July 2010. It arises in proceedings started in March of last year in which the claimant seeks a declaration that a contract dated 28 October 2009 for the sale by him to the three defendants, who are sisters, of a leasehold flat at 1 Cranworth Gardens, London SW9 was lawfully terminated by a notice given on his behalf by his solicitors on 1 February 2010. In addition to the declaration, the claimant seeks possession of the flat and associated monetary orders.
The defendants countered by issuing an application in the proceedings for summary relief by way of specific performance of the contract. Their application is supported by a document headed "Particulars of Different Remedy Sought" which is, in effect, a defence and counterclaim to the claimant's particulars of claim.
The leasehold interest in the flat, for which the price to be paid is £580,000, is comprised in a lease dated 21 April 1983 and in another dated 16 April 1999. Title to the property so to be sold is registered with absolute title under title number SGL372337. By clause 5 of the contract, the title to be deduced is expressed to consist of official copies of the entries and of the title plan appearing on the register of that title number as at 16.46 pm on 26 August 2009. The contract incorporates the fourth edition of the Standard Conditions of Sale so far as applicable to a sale by private treaty (as this is) and insofar as they are not varied by or inconsistent with the terms of the contract.
The dispute between the parties centres on clause 25. Headed "Completion Date" it provides that:
"25.1 The Completion Date shall be 14 days after the Seller's solicitors shall have served (by fax or by email) the Buyer's solicitors with copies of:
(a) The Office Copy entries relating to Title SGL32337, as amended by the Land Registry to show that [sic] the correct location of the Property on the Filed Plan;
(b) A Deed of Variation to the Lease dated 21 st April 1983, executed by the Freeholder and Seller to replace the existing Lease Plan with a plan showing the correct location and floor layout of the floor plan, drawn to scale and showing a north point and being fully Land Registry compliant.
(c) The consent of the Seller's mortgagees to the proposed variation to the Lease.
(d) Same as (a) but relating to the adjacent flat.
(e) Same as (b) but relating to the adjacent flat.
(f) Same as (c) but relating to the adjacent flat.
25.2 If the Seller, having used all reasonable endeavours, shall not be able to provide all of the information referred to in 25.1 to the Buyer's solicitors by February 1 st 2010, then either side may give notice of five working days to terminate this Agreement, whereupon the Buyer shall vacate the Property and the Seller's solicitors shall return that part of the deposit which they were holding as stakeholders to the Buyer's solicitors and the Seller shall return that part of the deposit which was released to him on exchange of contracts, to the Buyer's solicitors.
25.3 For the avoidance of doubt, the Buyer shall not be required to vacate the Property in accordance with clause 25.2 unless and until the Seller's solicitors confirm that they are in funds to reimburse the whole of the deposit including the £6,000 which they held as agents for the seller on exchange of contracts."
The title number referred in clause 25.1(a) accidentally omitted a figure "7". There is no dispute that it is intended to refer to the title number mentioned in clause 5, namely SGL 372337.
Clause 26 permits the buyer to go into occupation of the property from exchange and sets out the terms, including a monthly payment, on which that is to occur. I understand that the defendants did take up and have since remained in occupation.
It appears that the reason for the amended plans referred to in clause 25.1(a) was that, presumably by accident when the leases of the claimant's flat and the adjoining flat were granted, the two lease plans were transposed. That error, I understand, was carried into the filed plans recorded on the respective Land Registry titles.
It is common ground between the parties that the claimant used all reasonable endeavours but was unable to provide the defendants' solicitors with all of the information referred to in clause 25.1 by 1 February 2010. At 16.02 pm on Monday 1 February the claimant's solicitors faxed a letter to the defendants' solicitors in which the following was stated:
"In accordance with Clause 25.2 of the agreement dated 28 th October 2009 between our clients, we hereby give five working days' notice to terminate that Agreement when our client requires your clients to vacate the property and we shall in turn return the deposit paid on exchange of contracts."
The defendants had paid a 10% deposit, equal to £58,000, of which £6,000 was held by the claimant's solicitors as his agent and the remaining £52,000 held as stakeholder. This explains the reference to the £6,000 in clause 25.3.
By the Standard Conditions applicable to the contract, a notice which is received after 4 pm on a working day is to be treated as having been received the next working day. It follows therefore that, having been faxed after 4 pm, the notice contained in the letter of 1 February is to be treated as having been received by the defendants on the following day, Tuesday 2 February. It is common ground that the day of service is to be excluded in calculating the five working days. The five days given by the notice therefore expired on Tuesday 9 February.
On Monday 8 February 2010, the defendants' solicitors sent the following letter to the claimant's solicitors:
"We write with further reference to your letter of 1 st February.
That letter purported to give notice terminating the Agreement of 28 th October 2009 with effect from close of business today. Your letter was sent following non-compliance with the conditions set out in Special Condition 25.1 of the Contract. Special Condition 25.1 is a unilateral condition for the benefit of the Buyer. As such the Condition is capable of being waived by the Buyer and the Buyer hereby waives that Condition.
The Contract in consequence still being live, the Buyer is now making arrangements to complete, having made appropriate financial arrangements to avoid using mortgagees' monies. Please let us have an immediate completion statement as at tomorrow's date.
If notwithstanding this letter you do not confirm by midday tomorrow that your client will now complete, we shall be serving a completion notice, followed if necessary by an application to the Court for specific performance on the expiry of that notice.
The Contract no longer being conditional, and our clients being entitled forthwith to complete the purchase, their right to possession of the property is incidental to the right to complete and they will therefore not be vacating the property in the interim."
That letter was also faxed. It was faxed at 15.37 pm. By the Standard Conditions applicable to the contract, a notice is given when it is received and, if sent by fax, is to be treated as received, subject to proof to the contrary, one hour after despatch. It follows therefore, there being no proof to the contrary, that the notice of purported waiver of clause 25.1 was given at 16.37 pm on that Monday and, as that was after 4 pm, is to be taken as given the following day, Tuesday 9 February. That was on the fifth and last of the five working days notice given by the claimant's notice of the previous week.
When the defendants' summary judgment application came before him on 16 July 2010, Judge Madge directed that the question whether, as the defendants' solicitor's letter of 8 February had contended, clause 25.1 was capable of waiver by them as being for the buyer's (i.e. the defendants') benefit should be argued first. In an admirably short and clear judgment he held that the clause was not simply for the benefit of the purchaser with the result that it was not open to the defendants to waive it. He therefore dismissed their application. In so doing he referred to and placed reliance on what was said by Brightman J (as he then was) in Heron Garage Properties Ltd v Moss [1974] 1AllER 421 at 426 (" Heron Garage"). He also referred to and placed reliance on the presence in clause 25.2 of a right in the seller (i.e. the claimant) to give notice of termination if all of the information referred to in clause 25.1 had not been given to the buyer's solicitors by 1 February 2010.
This appeal: the issues
It is against that decision, and the dismissal of the summary judgment application which thereby resulted, that the defendants appeal. Norris J refused the defendants permission to appeal on paper but, on their renewed application, Mann J gave them permission. I shall continue to refer to them as the defendants rather than as the appellants. I shall also continue to refer to the claimant as such. For completeness I should mention that the claimant has served a respondent's notice.
Three broad issues were argued before me: (1) whether clause 25.1 is for the sole benefit of the buyer (i.e. the defendants), (2) whether, even if it is, clause 25.1 is severable from the...
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