TBAC Investments Ltd v Valmar Works Ltd

JurisdictionEngland & Wales
JudgeLord Justice Vos
Judgment Date11 October 2016
Neutral Citation[2016] EWCA Civ 1056
Date11 October 2016
CourtCourt of Appeal (Civil Division)
Docket NumberA3/2015/1724 Z, A & B

[2016] EWCA Civ 1056





Royal Courts of Justice


London, WC2A 2LL


Lord Justice Vos

A3/2015/1724 Z, A & B

TBAC Investments Limited
Valmar Works Limited

Mr A Davies (instructed by Hepburns LLP) appeared on behalf of the Applicant

Ms K Holland QC (instructed by DLA Piper UK LLP) appeared on behalf of the Respondent

(This transcript has been prepared without the assistance of the court papers)

Lord Justice Vos



This is the renewed oral application for permission to appeal from the order of Mr Kevin Prosser QC, sitting as a deputy judge of the High Court, dated 29th April 2015, whereby he granted the claimant, now the respondent, whom I shall call "TBAC", summary judgment on its claim to rescind a contract of sale with Valmar Works Limited ("Valmar"), the defendant, now appellant.


The contract of sale in question (which I shall call "the contract") was dated 5th July 2012 and was for the sale of Units 1 and 1A Valmar Trading Estate, Valmar Road, London SE5 9NP (which I shall call "the property"). Under the contract TBAC agreed to sell the property to Valmar for £1.9 million with a 5 per cent deposit of £95,000.


The fixed charge receivers of TBAC, Robert Harry Pick and Simon Robert Thomas, were also parties to it, having been appointed under the Law of Property Act 1925 as receivers on 27th July 2011. A Ms Bullman replaced Mr Pick as receiver on 31st October 2012 and a Mr O'Reilly replaced Ms Bullman on 6th December 2013. Despite the fact that those replacements played a prominent part in earlier stages of the litigation, it now appears to be accepted that they are not relevant, at least to what I have to decide.


It is perhaps important to recite that one of the standard conditions of the contract was contained in clause 9.5.2, which provided:

"The seller [TBAC] may rescind the contract, and if it does so: (a) it may (i) forfeit and keep any deposit and accrued interest; (ii) resell the property; (iii) claim damages."

The relevance of that clause 9.5.2 will later appear.


Valmar failed to complete the contract. By a purported notice to complete dated 18th March 2012 — but actually, so it appears, sent on 18th March 2013 — TBAC purported to give Valmar notice to complete the contract by close of business on 1st April 2012. The date should have been 1st April 2013.


On 9th April 2013 Valmar's solicitors told TBAC's solicitors that Valmar was not in a position to complete, and on 17th April 2013 TBAC's solicitors wrote to Valmar's solicitors purporting to rescind the contract under standard condition 7.5, which I do not need to recite.


Remarkably, Valmar first alleged that the contract was still in existence by a letter dated 22nd September 2014. I have not got the year wrong in citing that date; it was 17 months later.


On 30th September 2014 TBAC started these proceedings seeking declarations that the contract had been rescinded, an order cancelling the unilateral notices that by this time had been registered and ancillary relief.


On 9th March 2015 Mr Edward Murray, sitting as a deputy judge of the High Court, accepted Valmar's undertaking in damages as a condition of allowing the unilateral notices to remain on the register. That undertaking was fortified by Valmar being required to put £189,823.96 into court. The effect of this order was, again, to prevent the sale of the property to a company called Colespace Limited going ahead.


I should have said that on 30th September 2014 TBAC had agreed to sell the property at auction for the sum of £2.051 million to Colespace Limited, but the completion of that sale was intercepted by Valmar's registration of unilateral notices preventing completion.


The effect therefore of Mr Murray's order therefore to block the sale. TBAC submits that it has suffered large losses as a result of the registration of the unilateral notices, including interest and other expenses of some £55,591.20 and late completion interest under the contract of £140,638.96 for the period between April 2013 and April 2015. In fact, as it appears, the contract for the sale to Colespace was ultimately completed after the deputy judge's decision on 29th April 2015.


Before I deal with the deputy judge's order, it is important to point out that the correspondence that I have been shown this morning reveals that Valmar's solicitors accepted that the expenses claimed by TBAC in the sum of £55,591.20 were indeed recoverable as damages under the contract, but said that that figure should be taken from the forfeited deposit in the sum of £95,000. Valmar's solicitors contested TBAC's entitlement to late completion interest under the contract in the sum of £140,000-odd on the basis, to which I shall return in a moment, that TBAC had made a profit of a greater sum than £140,000-odd by selling to Colespace rather than to Valmar.


I return then to the order that the judge made. That was dated, as I have said, 29th April 2015. He granted TBAC summary judgment, declaring the contract validly terminated. He ordered that the £95,000 deposit paid by Valmar was forfeited to TBAC. He adjourned directions for further relief and cancelled Valmar's unilateral notices, restraining any application for further such notices. He dismissed Valmar's counterclaim and he gave TBAC permission to enforce Valmar's undertaking in damages that had been given when it obtained the order on 9th March 2015 from Mr Murray. He remitted to the Master the enquiry as to damages. He ordered Valmar to pay the costs of the exercise, including making an order that Valmar should pay £62,500 on account within 14 days.


On 17th July 2015 Lewison LJ considered the application by Valmar for permission to appeal on paper. He granted permission to appeal only on ground 5, rejecting the other grounds. Ground 5 was, in summary, that the judge had been wrong to hold that the principles in Mannai Investment v Eagle Star [1997] AC 749 at page 767G saved the validity of a notice to complete when that notice was beset by so many errors.


I have not dealt in detail with those errors and I shall not do so this morning, but the years were wrong, as I have already indicated; the dates were wrong, as I have already indicated; the parties were wrongly described; even the transaction was wrongly described; and there were other errors with which I need not detain the court.


Lewison LJ rejected the application for permission to appeal on all the other grounds, including ground 4, to the effect that the notice was invalid as it was unsigned. The deputy judge had held at paragraph 28 of his judgment that there was no evidence that the notice was signed, but that may have been because Valmar apparently never produced the original of the notice to complete to the court. Moreover, Valmar accepted before the deputy judge that there was no legal requirement that a notice to complete should be signed (see paragraph 43). The judge held at paragraph 44 that a reasonable recipient would have understood that the notice was intended to be valid from the fact that it had been sent and from the fact that a copy of it had been sent to their solicitors.

The applications now before the court


The applications before the court today are, first, the renewed permission to appeal application seeking to add ground 4 to the grounds of appeal based on the notice being unsigned. I do not understand — and Mr Adrian Davies, counsel for Valmar, has confirmed — that Valmar is pursuing ground 5A, adumbrated in its original skeleton, contending that the notice to complete was not given for and on behalf of the vendor, TBAC.


Secondly, there is an application by TBAC under CPR part 52.10(2)(b), which has now been replaced by part 52N.20(2)(b), seeking that the matter be remitted to the High Court to determine three issues raised by TBAC in its respondent's notice dated 21st August 2015 and which the judge did not apparently see fit to consider in his judgment, namely: (a) TBAC's alternative estoppel argument to the effect that Valmar was estopped from disputing the validity of the rescission of the contract; (b) TBAC's further alternative argument that the contract had been terminated by Valmar's repudiatory breach in failing to complete, which breach was accepted by TBAC as terminating the contract; (c) TBAC's final alternative argument that the contract had been terminated under clause 19.2.1 of the contract by Valmar's breach in failing to complete.


Thirdly, there is an application before me that Valmar provides security for costs of the appeal in the sum of originally £60,000, but now £95,000 plus VAT, or £116,000 plus VAT; the latter figure being on the...

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