Urban I (Blonk Street) Ltd v Simon Martin Ayres and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Underhill,Lord Justice Floyd |
| Judgment Date | 05 July 2013 |
| Neutral Citation | [2013] EWCA Civ 816 |
| Docket Number | Case No: A3/2012/2915 |
| Court | Court of Appeal (Civil Division) |
| Date | 05 July 2013 |
[2013] EWCA Civ 816
The Chancellor of the High Court
Lord Justice Underhill
and
Lord Justice Floyd
Case No: A3/2012/2915
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE CHANCERY DIVISION
LEEDS DISTRICT REGISTRY
HIS HONOUR JUDGE KAYE QC
ILS30568
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Stephen Howd (instructed by Chadwick Lawrence) for the Appellants
Mr Simon Ayres and Ms Nichola Lucas appeared in person
Hearing dates : 27 June 2013
Approved Judgment
The Chancellor (Sir Terence Etherton):
These proceedings concern a dispute about the rights of the appellant, as vendor, and the rights of the respondents, as purchasers, under a contract for the sale of a flat to be built as part of a development by the appellant which was considerably delayed beyond the original anticipated completion date. The respondents claim to have terminated the contract and to be entitled to repayment of their deposit. The appellant claims that the respondents were not entitled to treat the contract as at an end when they purported to do so and so the respondents themselves repudiated the contract. The appellant claims to be entitled to damages for the respondents' refusal to complete the purchase. The appellant does not seek specific performance.
The case raises questions of principle about time being or being made of the essence in contracts for the sale of land and of the role of a notice to complete where there has been delay in complying with the terms of such a contract.
This appeal is from the order made on 19 October 2012 by His Honour Judge Kaye QC, sitting as a High Court Judge in Leeds District Registry, dismissing the claim of the appellant, Urban 1 (Blonk Street) Limited, and giving judgment on the counterclaim of the respondents, Simon Martin Ayres and Nicola Jane Ayres, for the return of their deposit and interest.
The Contract
The appellant is the developer of a mixed commercial and residential development at Blonk Street, Sheffield ("the Development"). On 25 January 2007 it entered into a written contract with the respondents ("the Contract") for the grant to the respondents of a 125 year lease (in the form of the draft attached to the Contract) at a premium of £172,950 of a two bedroom apartment in the Development ("the Apartment"). The respondents had already paid a reservation fee of £5,000. The Contract provided for them to pay in addition a further sum of £12,295 by way of deposit, a total of £17,295.
The Contract did not specify a fixed completion date. Condition 7.2 of the Special Conditions of Sale ("the Special Conditions"), which formed part of the Contract, provided that when the building of the Apartment was complete the appellant's solicitors would send a written notice to the respondents' solicitors and completion would then occur on or before 10 days of the date on that notice.
Condition 2.1 of the Special Conditions provided that the appellant would build the property (as defined in the Contract), of which the Apartment formed part ("the Property"), and the common parts (as defined in the draft lease of the Apartment) in accordance with the terms of the relevant planning permission, the relevant building regulation consent and the plans and specification of the Property.
Condition 2.5 of the Contract provided as follows:
"2.5 If the Seller is prevented from completing the building of the Apartment on the Property within a reasonable time after this Agreement because of:
2.5.1 strike or lockout of workmen;
2.5.2 inability (for whatever reason) to obtain building materials or labour;
2.5.3 accident or act of God;
2.5.4 bad weather; or
2.5.5 any other avoidable cause
then the Buyer will have no claim against the Seller. This Agreement shall not be cancelled nor shall the Buyer be entitled to compensation or damages resulting from a delay. The Seller will take all reasonable steps to prevent any delay arising."
Condition 7.1 of the Special Conditions provided that the Property was to be regarded as physically completed when no major items affecting the habitability of the Property remained outstanding and when a satisfactory final inspection had been carried out by the inspector under a scheme for the protection of the Property as specified in the Contract (such as NHBC).
Condition 9.1 of the Special Conditions provided that the Law Society's Standard Conditions of Sale (Fourth Edition) ("the Standard Conditions") applied so far as they were not varied or inconsistent with the terms of the Contract. Condition 9.2 provided, among other things, that Standard Condition 6.1.1 did not apply. Special Condition 6.8.2 provided that Standard Condition 6.8.2 would apply as amended by altering "ten working days" to "five working days" for the period to complete.
Standard Condition 6.1.1 provided as follows:
"6.1.1 Completion date is twenty working days after the date of the contract but time is not of the essence of the contract unless a notice to complete is served."
Standard Condition 6.8 (so far as relevant to this appeal) provided as follows:
"6.8 Notice to Complete
6.8.1 At any time on after completion date a party who is ready, able and willing to complete may give the other a notice to complete.
6.8.2 The parties are to complete the contract within ten working days of giving a notice to complete, excluding the day on which the notice is given. For this purpose, time is of the essence of the contract."
Events subsequent to the Contract
The following facts and matters are taken from the Judge's judgment.
At the date of the Contract the appellant envisaged that the Development would start on 26 February 2007 and the target date for completion was December 2008. The Development in fact started a month late on 26 March 2007. The first minutes of the progress meetings with the contractor and the project manager noted that the development programme envisaged a 96 week contract with completion to be on or before 26 January 2009.
The evidence of the appellant's managing director was that the completion of the Development was delayed principally by the following five factors: fibre optic cables discovered on the development site; wholly unusual inclement weather; financial problems of contractors; the closure of a lane on Blonk Street; design revisions to foundations. All of those matters and some other delaying factors (such as late arrival of a piling rig, outstanding planning conditions and some problems with sub-contractors) all "stabilised" (to use the language of the Judge in [29] of his judgment) by September 2007. By November 2007 the contractors had requested and been granted an extra two weeks for contractual completion leading to a revised target date of 9 February 2009 despite being seven weeks behind schedule and with the lane closure along Blonk Road still to come.
In June 2008 the respondents were advised by their solicitors, Gordons, that completion would be in December 2008. The source of that information was said to be "the developers". Gordons suggested that the respondents should arrange their mortgage and finances if they had not already done so. By this time the respondents' marriage was breaking down.
The respondents set about arranging finance through a mortgage broker. In September 2008 they received a mortgage offer from Halifax of 90 per cent of the purchase price. The mortgage offer was subject to a number of conditions, including that there had to be a satisfactory assessment of the property to be mortgaged and a full mortgage application had to be made before 8 March 2009. The offer documentation indicated that the mortgage had to commence by 31 December 2008.
The anticipated February 2009 completion date was not communicated to the respondents by the appellant until October 2008.
The appellant wrote to the respondents in October 2008 informing them that the Development was progressing well and their block was due for completion in February 2009 and warning them that if they did not complete a default notice would be served.
In fact, according to the appellant's evidence, little work took place over the period between October 2008 and January 2009 due to the contractor's financial difficulties. That information was not passed on to the respondents at the time.
In November 2008 the respondents' mortgage broker informed the respondents that the mortgage needed to be completed and the loan drawn down by 31 December 2008 because Bank of Scotland, which owned Halifax, was ceasing to offer 90 per cent. loan to value products. The respondents attempted to extend the date, but were unsuccessful. They needed a 90 per cent. mortgage but were unable to find any other such products. Furthermore, in November and December 2008 the respondents requested the appellant to allow access for their mortgage valuer, their solicitors pointing out that the respondents' mortgage would expire on 31 December if the valuation was not carried out before that date. Those requests were not granted.
At the end of January 2009, by which time completion looked set for May 2009, Gordons asked the appellant's solicitors, Chadwick Lawrence, for an explanation of the delay. Chadwick Lawrence replied by letter dated 10 February 2009. They said that the delay was due to problems with the contractor. They said that the contract handover date as between the claimant and the contractor "is and always has been 9 th February 2009"....
To continue reading
Request your trial
-
Grand China Logistics Holding (Group) Company Ltd v Spar Shipping as
...the different facts and circumstances of the various cases, especially the terms of the particular contract in question. In Urban 1 (Blonk) Street v Ayres [2013] EWCA Civ 816, [2014] 1 WLR 756 at [57] I referred to Lord Wilberforce's speech. I said that, for the purpose of resolving the ca......
-
Bettini & Britto Ltd v Dawn Run Ltd
...was in fact extended by extraordinary circumstances. Pitt v Shew (1821) 4 B & Ald 208 applied; Urban 1 (Blonk Street) Ltd v Ayres [2013] EWCA Civ 816 applied; British Steel Corp v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504 applied. 2. There was ample evidence before the l......
-
Bettini & Britto Ltd v Dawn Run Ltd
...was in fact extended by extraordinary circumstances. Pitt v Shew (1821) 4 B & Ald 208 applied; Urban 1 (Blonk Street) Ltd v Ayres [2013] EWCA Civ 816 applied; British Steel Corp v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504 applied. 2. There was ample evidence before the l......
-
Between Chris Stephen Conolly Plaintiff/Defendant by Counterclaim v Kadieshandirebanks Defendant/Plaintiff by Counterclaim
...even though the time fixed by the contract was not of the essence of the contract: Urban 1 (Blonk Street) Ltd v Ayres and another [2013] EWCA Civ 816. (ii) The innocent party does not have to wait until there has been unreasonable delay by the party in breach before serving such a notice: ......
-
A Round-Up Of Key Construction Cases In 2013
...Delayed completion resulting in loss of mortgage offer Urban I (Blonk Street) Limited v Simon Martin Ayres & Nicola Jane Ayres [2013] EWCA Civ 816 considered whether time was of the essence in contracts for sale of land in the context of a mortgage-funded purchase of an "off-plan" apart......