Myton Ltd v Schwab-Morris
| Jurisdiction | England & Wales |
| Date | 1974 |
| Court | Chancery Division |
Vendor and Purchaser - Leasehold property - Agreement for underlease - Failure to pay agreed deposit - Purported rescission by lessor - Caution registered by intended lessee - Whether payment of deposit condition precedent of contract - Whether enforceable contract
By an agreement in writing dated June 5, 1972, the plaintiff company, the registered proprietor of a leasehold title, agreed to grant to the defendant an underlease of premises, a deposit of 10 per cent. of the premium to be paid by the defendant on the signing of the contract. The agreement also provided that if the defendant failed to perform her part of the agreement, the plaintiff lessor could give notice in writing specifying the default and requiring the lessee to make good within 21 days, and that thereupon time should become of the essence and, on failure by the defendant to comply, the agreement should become void and the deposit forfeited. On the signing of the contract the defendant delivered a cheque drawn on her bank for the required deposit which was twice presented for payment and returned unpaid. The plaintiff then gave formal notice that the non-payment of the deposit was regarded as a fundamental breach of the contract which was therefore rescinded. Two months later the defendant registered a caution against the plaintiff's title and resisted the application for its removal.
On a summons to determine whether the defendant was a person interested in the land under section 54 of the
Held, (1) that in general a deposit was demanded and paid on the signing of a contract for the sale or lease of land as an earnest of the purchaser's ability and intention to complete, and consequently the requirement here that a deposit should be paid on the signing of the contract was a condition precedent to the contract taking effect.
(2) That the fact that the plaintiff had treated the contract as having come into existence and had then treated it as having been repudiated because of the breach of a fundamental term, did not preclude it from relying on the failure to pay the deposit as non-performance of a condition precedent; and that, accordingly, the defendant did not have an interest in the land and the caution registered against the plaintiff's title should be cancelled.
Per curiam. If payment of a deposit was not a condition precedent, it was a term of so radical a nature that the defendant's failure to comply with it would entitle the plaintiff to renounce further performance (post, p. 337F–G).
The following cases are referred to in the judgment:
Dewar v. Mintoft [
Mersey Steel and Iron Co. Ltd. v. Naylor, Benzon & Co. (
The following additional cases were cited in argument:
Howe v. Smith (
Soper v. Arnold (
Thorpe v. Fasey [
ORIGINATING SUMMONS
By an agreement in writing dated June 5, 1972, the plaintiff, Myton Ltd., agreed to grant to the defendant, Mrs. Valery Anne Schwab-Morris, an underlease of premises for 99 years for £70,000, a deposit of 10 per cent. to be paid on the signing of the contract. A cheque for £7,000 delivered to the plaintiff by the defendant on the signing of the contract was twice presented for payment but was twice returned unpaid. The plaintiff then informed the defendant that owing to her failure to pay the deposit, the contract was rescinded. Subsequently the defendant registered a caution against the plaintiff's title (the property being registered land). On the plaintiff's application for the caution to be removed the Chief Land Registrar referred the dispute to the court.
The facts are stated in the judgment.
B. K. Levy for the plaintiff company.
Ian McCulloch for the defendant.
GOULDING J. These proceedings were begun by originating summons taken out at the direction of the Chief Land Registrar under the provisions of the
I will go at once to the written agreement. It is dated June 5, 1972, and expressed to be made between the plaintiff, referred to as “the lessor” of the one part and the defendant, referred to as “the lessee” of the other part. Clause 1 provides:
“The lessor shall grant and the lessee will accept an underlease of all those premises described in the form of draft underlease annexed hereto.”
Next is the clause with which I am mainly concerned:
“2. The lessee shall on or before the signing hereof pay 10 per cent. of the premium of £70,000 due on the said underlease as a deposit to the lessor.”
Clause 3 provides for the underlease to be in accordance with the annexed draft, subject to certain contingent variations.
“4. The premises are in course of erection by the lessor and the lessee shall within 14 days of receipt of notice from the lessor's solicitors of completion of the premises … or within 28 days from the date hereof (whichever shall be the later) take up and complete the said underlease and execute a counterpart thereof. 5. The said underlease and counterpart shall be prepared by the lessor's solicitors and shall be executed by the lessor and the lessee within such period of 14 days as aforesaid. 6. Pending the exchange of the said underlease and...
To continue reading
Request your trial
-
Damon Compania Naviera SA v Hapag-Lloyd International SA
...had not elected to rescind, he could have obtained specific performance notwithstanding that the deposit had not been paid. 45 Myton v. Schwab-Morris , (1974) 1 Weekly Law Reports, is a direct decision on the matter in relation to sales of land. In that case there was a written agreement f......
-
Truegold International Ltd v Questrock Ltd and Another
...Warner J expressed hesitation in differing in his conclusion from the decision of Goulding J in Mytton Limited and Schreiber Morris [1974] 1 WLR 331, but observed that in reaching his decision Goulding J had not been referred to the earlier decision in Lowe v. Hope [1970] Ch 94. 36 Miss Hor......
-
Blackall v Blackall
...557 BERRY V JOHNSON 2 YO & COL 564 CONNOLLY V KEATING (NO 2) 1903 1 IR 356 UNION BANK V MUNSTER 37 CH D 51 MYTON LTD V SCHWAB-MORRIS 1974 1 WLR 331 KRAMER V ARNOLD 1997 3 IR 43 DAMON SA V HAPAG-LLOYD SA 1985 1 WLR 435 MILLICHAMP V JONES 1983 1 AER 267 NORTON ON DEEDS 2ED 91 MORONEY V MO......
-
Alexey Samarenko v Dawn Hill House Ltd
...understanding of buyers and sellers of land. It was this ordinary understanding of buyers and sellers that led Goulding J in Myton Ltd v Schwab-Morris [1974] 1 WLR 331 to hold that even though contracts had in fact been exchanged the contract was not binding when the cheque tendered for the......