Pollway Ltd v Abdullah
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MEGAW,LORD JUSTICE ROSKILL,LORD JUSTICE BUCKLEY |
| Judgment Date | 01 February 1974 |
| Judgment citation (vLex) | [1974] EWCA Civ J0201-1 |
| Court | Court of Appeal (Civil Division) |
| Date | 01 February 1974 |
[1974] EWCA Civ J0201-1
In The Supreme Court of Judicature
Court of Appeal
Royat Courts of Justice Bar Library
(Appeal of Plaintiffs from Order of His Honour Judge Stockdale, Wesminster County Court, dated June 22, 1973.)
Lord Justice Megaw,
Lord Justice Buckley and
Lord Justice Roskill.
Mr F. Reynold, (instructed by Messrs. Bailey & Peltz) appeared on behalf of the Appellants (Plaintiffs).
Mr J.D. Goudie, (instructed by Messrs. Blacket Gill & Langhams) appeared on behalf of the Respondent (Defendant).
I will ask Lord Justice Rosklll to deliver the first judgment.
The first named plaintiffs (whom I shall call "the vendors") were the reversioners of certain property in Purley, Surrey, of certain ground rents and rack rents relating to which they wished to dispose. For this purpose they employed the second plaintiffs (whom I shall call "the auctioneers"). The auctioneers duly advertised the sale to take place by auction on 25th April, 1972, unless the property had previously been sold privately, which it was not. The conditions of sale were also advertised. It is necessary only to refer to special condition 3: "A deposit of 10 per cent, of the purchase price shall be paid on the making of this contract to Messrs. May & Philpot as agents for the vendor."
The auction took place on 25th April, 1972. The defendant bid £5,550 for the property which was duly knocked down to him by the auctioneers. Thereupon he became liable to pay the 10 per cent, deposit In accordance with condition 3. It is to be observed that, strictly speaking, he could only discharge this obligation by paying cash, a cheque not being legal tender. Immediately following the auction a memorandum was duly signed by the defendant himself as purchaser and by the auctioneers as agents for the vendors who were named. That memorandum was dated 25th April, 1972. By it the defendant acknowledged his purchase at the stated price, subject to the stated condition of sale, and that he had paid a deposit of £555 to the auctioneers in part payment of the purchase price. The deposit was In fact paid by cheque drawn by the defendant in favour of the auctioneers as the named payees. It is not disputed that the auctioneers thereupon became the holders of that cheque as defined inSection 2 of the Bills of Exchange Act 1882. It is also not disputed that the vendors were never the holders of that cheque.
Subsequently, for reasons which were admitted both at the trial and before this court to be without foundation and wholly unjustifiable, the defendant stopped the cheque and it was dishonoured on presentation. The defendant was subsequently given time to comply with his obligations. He refused so to do. The vendors, as they were entitled to do, thereupon treated the defendants conduct as a repudiation of the contract, which they did. They resold the property by subsequent auction, and we were told that the resale price was only £50 less than the price which the defendant agreed, but failed to pay. The vendors' right to rescind and to claim damages was not disputed. Both they and the auctioneers sued the defendant upon the dishonoured cheque.
In a careful judgment, given on 22nd June, 1973, His Honour Judge Stockdale, sitting at Westminster County Court, gave judgment for the defendant against both plaintiffs, holding that neither can recover upon the cheque. His main reason for so holding can be shortly stated. The consideration for the cheque was the vendors undertaking to complete the sale. Once the vendor accepted the defendant's conduct as repudiation they were discharged from that obligation. There was then a total failure of consideration. Therefore the consideration for the cheque wholly failed, and the defendant ceased to be liable upon it having properly discharged the burden resting upon him to prove total failure of consideration. I will say at once that I think the learned judge was right in dismissing the vendors claim upon the cheque. Indeed, that part of the judgment was not seriously challenged before us. There is a very short reason why thevendors cannot recover. They were never the holders of the cheque and cannot sue upon it. I say no more of their claim.
The crucial question la whether the auctioneers can recover, contrary to the learned judge's conclusion. If they cannot, his decision, if upheld in this court, la of great Importance to auctioneers and others acting as agents for principals who may in the ordinary course of their business as agents accept cheques drawn in their favour by third arties. Indeed, as was pointed out during the argument, if the learned judge's view be right, no auctioneers can safely accept payment of a deposit from a purchaser to whom property is knocked down at an auction other wise than in cash or by bankers draft. This of course does not of itself mean that the learned judge's view is wrong, but a conclusion which has so startlingly inconvenient a commercial result requires to have; Its foundation in point of law closely analysed before it can be accepted as correct.
It Is, I think, necessary carefully to analyse the several contracts involved between the three parties concerned, the vendors, the auctioneers and the defendant. There are at least three. First, there is the contract between the vendors...
To continue reading
Request your trial
-
Indian Overseas Bank v Cheng Lai Geok
...McKenna v Richey [1950] VLR 360 (folld) Pips (Leisure Productions) Ltd v Walton (1982) 43 P & CR 415 (folld) Pollway Ltd v Abdullah [1974] 1 WLR 493; [1974] 2 All ER 381 (distd) Robinson v Harman (1848) 1 Ex 850 (refd) Stirrup's Contract, In re; Stirrupt v Foel Agricultural Co-operative Soc......
-
Wong Fook Heng v Amixco Asia Pte Ltd
...separate from and additional to the original underlying contract. The cases relied on by the appellant include Pollway v Abdullah [1974] 1 WLR 493[1974] 2 All ER 381 Glennie v Imri [] 160 ER 773 and James Lamont & Co Ltd v Hyland Ltd [1950] 1 KB 585 These authorities are said to support the......
- Amer Singh Bhatt v Kelana Resorts Sdn Bhd
-
Alexey Samarenko v Dawn Hill House Ltd
...to bring the contract of sale to an end: this conclusion is, I consider, consistent with the approach of the Court of Appeal in Pollway Ltd v Abdullah [1974] 1 WLR 493." 23 Stephenson LJ agreed with Fox LJ. 24 It is plain that in Damon this court approved the reasoning in Portaria Shipping.......