Square Meals Frozen Foods Ltd v Dunstable Corporation

JurisdictionEngland & Wales
JudgeLORD JUSTICE RUSSELL,LORD JUSTICE BUCKLEY,LORD JUSTICE LAWTON,THE MASTER OF THE ROLLS,LORD JUSTICE STAMP,LORD JUSTICE SCARMAN
Judgment Date26 October 1973
Neutral Citation[1973] EWCA Civ J1026-1
Judgment citation (vLex)[1973] EWCA Civ J1019-2
CourtCourt of Appeal (Civil Division)
Date26 October 1973

[1973] EWCA Civ J1019-2

In The Supreme Court of Judicature

Court of Appeal

(On appeal from Mr. Justice Templeman)

Before

Lord Justice Russell,

Lord Justice Buckley and

Lord Justice Lawton

Quadrangle Development And Construction Company Ltd
Plaintiffs
(Appellants)
and
Leonard Arthur Jenner

MR. J. H. HMES. Q. C. and MR. ALAN STEINFRLD (instructed by Messrs. Wellers, Bromley, Kent) appeared on behalf of the Appellants.

MR. G. B. H. DILLON, Q. C. and MR. C. P. F. RIMER (instructed by Messrs. Ormerod, Morris, Dumont) appeared on behalf of the Respondents.

LORD JUSTICE RUSSELL
1

This appeal arises in a purchaser's specific performance action and it is an appeal from a refusal by Mr. Justice Templeman to make a summary order for specific performance under Order 86 procedure and from his giving leave to defend.

2

The point is a short one. There was a contract for the purchase by the plaintiff of house property in Creydon for a sum of £57,000. The purchaser served a 28 day notice to complete under Condition 22 of the National Conditions of Sale, 18th edition, which was incorporated in the contract. For present purposes that notice is taken to have expired on the 4th May this year. Also for present purposes only we are to proceed on the basis that the purchaser was not able to complete on that day.

3

Shortly after that date on the ground that the purchaser had failed to complete, time having become of the essence as a result of the Condition 22 notice, the vendor defendant purported to rescind and forfeit the deposit. The purchaser then sued for specific performance and sought summary judgment under Order 86.

4

For the purposes of the Order 86 application, the opposing contentions are these. The defendant vendor says that a notice given by the purchaser under Condition 22 makes time of the essence for all purposes. The purchaser says that his notice only made it so as against the recipient of the notice, the vendor, and that accordingly it cannot be said that the purchaser was or is in essential default.

5

Condition 22 is headed "Special notice to complete," and it is in these terms: "(1) At any time on or after the completion date, either party being ready and willing to fulfil his own outstanding obligations under the contract,may (without prejudice to any other right or remedy available to him) give to the other party or his solicitor notice in writing requiring completion of the contract is conformity with this condition. (2) Upon service of such notice as aforesaid it shall become and be a term of the contract, in respect of which time shall be of the essence thereof, that the party to whom the notice is given shall complete the contract within 28 days after service of the notice (exclusive of the day of service): but this condition shall operate without prejudice to any right of either party to rescind the contract in the meantime. (3) In case the purchaser refuse or fails to complete in conformity with this condition, then (without prejudice to any other right or remedy available to the vendor) the purchaser's deposit may be forfeited (unless the court otherwise directs) and, if the vendor resells the property within six months of the expiration of the said period of 28 days, he shall be entitled (upon crediting the deposit) to recover from the purchaser hereunder the amount of any loss occasioned to the vendor by expenses of or incidental to such resale or by diminution in the price."

6

It is perhaps not without interest to observe at the outset that the purchaser's solicitors when they served the notice seem to have thought that such a notice bound also the giver. The purchaser had subsold for £80,000 and when giving the Condition 22 notice to the vendor wrote this letter: "We are aware that you are ready and able to complete, as we are, and we have today served notice on Mr. Shiers, the sub-purchaser. To protect our client's position we also enclose notice to complete on you in respect of your client. You will appreciate this notice is being served purely to protect our client's interest." Clearly from that, though of course theviews of the solicitors may not be correct to law, the purchaser's solicitors thought that they were bound by the notice they gave to the sub-purchaser just as the sub-purchaser would be.

7

One must remember when approaching this sort of case something of the background. In the ordinary case of a house purchase contract with perhaps a completion date in it and no special condition the situation is this that if time went by and one party appeared to be dragging his keels, for example, and the other party was ready and willing to complete a time would arrive when he would be entitled to give notice calling upon the other party to complete before the expiration of X weeks or X months from the date of the giving of the notice; and provided that the time given was reasonable in all the circumstances, then the party to whom the notice was given would be in essential default at the expiration of the period. But although the notice would have been, in the normal course of events, if I may so put it, unilateral in its language, simply calling upon the recipient of the notice to complete, nevertheless it is clear law that in such a case there was an obligation also upon the giver of the notice so that if when it came to the last day of the period stated and the giver of the notice was unable himself then to complete, although he had been ready and willing if necessary to complete at the date of the giving of the notice, the giver of the notice would be in essential default.

8

We now come to consider this kind of clause which is designed primarily to cover the authorities that had previously held that even if you had a particular clause entitling you to give, say, 28 days' notice calling upon the other person to complete, nevertheless it still had to be a reasonable periodin all the circumstances of the case. Accordingly this type of clause, Condition 22, was introduced, and it expressly made it a term of the contract that in respect of the period stated, 28 days, time was to be of the essence of the contract.

9

Prima facie I would approach this type of clause assuming it to be a tidying-up of the common law position. But what is said here by Mr. Hames for the plaintiff appellant is this, that in sub-condition (2) of Condition 22 it says in terms: "Upon service of much notice as aforesaid it shall become and be a term of the contract, in respect of which time shall be of the essence thereof, that the party to whom the notice is given shall complete the contract within 28 days," etc. It is pointed out that it is only that party who appears to be the subject of the term in respect of which time shall be of the essence; if it had been intended that both parties, the giver and the recipient of the notice, should be the subject of that term then instead of the words "that the party to whom notice is given shall complete the contract," surely it was argued one would have found it much more simply expressed with the words "that completion shall take place". I see myself the semantic force of that argument, but it seems to me that exactly the same considerations apply to this clause as apply in what has been referred to as the common law notice case. It is, as Mr. Justice Templeman said - I borrow his word - really ludicrous to think of an obligation on the one party to complete the contract, time being of the essence; without there being necessarily as the other side of the coin a similar obligation upon the party giving the notice. Under the language of the clause, the party giving the notice must be ready and willing at the time of giving the notice to fulfil his own outstanding obligations under the contract. I should have thought it notreally difficult to infer that the same party must continue to be ready and willing at any time during the period to fulfil his part of the contract.

10

Mr. Millen in this connection drew our attention to the passage in Maskey v. Dick (1881) 6 Appeal Cases 251, where, at page 263, Lord Blackburn used this phrase of general application which Mr. Dillon particularly applied - I think rightly - to the present case: "I think I may safely say, as a general rule, that where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect." It seems to me that if by the notice the giver of the notice brings into existence a term in respect of which time should be of the essence that the recipient of the notice should complete, it is implicit in that the term equally binds the giver of the notice because completion, despite strenuous argument to the contrary by Mr. Hames, is in my judgment an activity in which two parties necessarily co-operate. Completion by one cannot be effected without the co-operation of the other.

11

There may be cases in which it is to be found that "completion" is used in a different sense from its normal sense, and we were given an example of that in the case of Lewis v. The South Wales Railway Company, 10 Hare, 113, but that was a very special case in which there had been a promise to pay interest on purchase money until completion and in fact the purchase money was paid into court for the benefit of the vendor before conveyance and it was held- and I should have said with respect very sensibly held - that that contract should not be construed as obliging the purchaser to continue to pay interest when in fact he had substantially paid the purchase money. Another case to which we were referred was the case of Finkielkraut v. Monoham (1949) 2 AKR 234. That was a case in which a 14 day notice to...

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