Sale of land–Requisition as to right of bank’s trust company to give receipt for mortgage moneys advanced by bank–Requisition misconceived, but answered in any case by vendors’ offer to get receipts from both companies or either–Notice to complete validly served though receipt documents not then obtained–Deposit held forfeited
By this
adjourned summons, Mrs Doris Kathleen Edwards, of Old Customs House, Bayards
Cove, Dartmouth, sought the return of a deposit of £4,250 paid by her to the
defendants, Mr Peter Marshall-Lee and Mrs Diane Lilian Marshall-Lee, of Morocco
House, Bayards Cove, pursuant to the terms of a contract of sale of Morocco
House to her for £42,500. The defendants counterclaimed their net losses on
resale of the property for £38,000.
Mr G M
Shillingford (instructed by Robbins, Olivey & Lake) appeared for the
plaintiff, and Miss E Appleby (instructed by Theodore Goddard & Co)
represented the defendants.
Giving
judgment, BRIGHTMAN J said that Mrs Edwards had contracted to purchase Morocco
House but claimed to be entitled to refuse to complete on the ground that a
requisition had not been adequately answered. Under a legal charge of the
property executed in 1966 Barclays Bank and a Mr Grazebrook were the persons
entitled to receive mortgage moneys. The purpose of the requisition in question
was, and was only, to require proof that the interest of Barclays Bank under
the charge had become vested in Barclays Bank Trust Company by the date of a
receipt given by the trust company in 1972 in the course of the transaction
with which the court was concerned. The requisition stated that the legal
charge did not disclose that the property was vested in Barclays Bank and Mr
Grazebrook in a fiduciary capacity; that if Barclays Bank and Mr Grazebrook
were trustees or executors, then it must be so established by abstracting
either (a) the trust instrument, or (b) the act of record, as the case might
be; that in reference to section 7 (2) (b) of the Barclays Bank Trust Company
Act 1970, a vacating receipt was neither a conveyance nor a transfer; and that
accordingly the vendors were put on proof that the receipt on the legal charge
was in fact a valid discharge thereof.
That, in his
(Brightman J’s) judgment, was a bad requisition. The 1972 receipt, though it
did not name the persons making payment, acknowledged receipt of the money due,
and was therefore in his judgment a document whereby the trust company
purported to convey or transfer–which by definition included release–rights
held by Barclays Bank jointly with Mr Grazebrook, and was therefore a document
whereby the trust company purported to convey or transfer rights which before
the specified date had been held by Barclays Bank. At first the vendors’
solicitors misread the requisition. They thought the purchaser’s solicitors
were taking the point that the 1972 receipt was not in proper form because it
did not comply with section 115 of the Law of Property Act 1925. However, the
purchaser’s solicitors replied in letters dated December 20 and 21 1973 making
it perfectly clear that their requisition was directed to the objection that
there was no evidence that the interest of Barclays Bank had become vested in
the trust company by the date of the 1972 receipt. The purchaser’s solicitors
asserted, though quite wrongly, that a vacating receipt, by which they meant a
receipt complying with section 115, was neither a conveyance nor a transfer.
This was a mistaken view. The vendors’ solicitors could, as he (his Lordship)
had already indicated, have relied on section 7 (2) (b) of the 1970 Act in
order to prove the devolution of title from Barclays Bank to the trust company.
Nevertheless
they did not do so, and they were not bound to do so. In a letter dated January
8 1974 from the trust company to the vendors’ solicitors, which the vendors’
solicitors forwarded to the purchaser’s solicitors, the trust company offered
to provide a vacating receipt executed by it and by Barclays Bank. Such a
receipt executed by Barclays Bank would, in his (Brightman J’s) judgment, have
been a sufficient acknowledgment that the bank had no interest in the moneys
received by the trust company and Mr Grazebrook, and would have prevented
Barclays Bank from ever alleging that the mortagage money had not been duly
repaid. On January 11 the purchaser’s solicitors set out a form of receipt
which would satisfy them, and requested an undertaking that it would be
obtained. This form of receipt was in fact a receipt to be given under the seal
of the trust company. On January 14 the vendors’ solicitors complied in a letter
stating that they were sure they would receive the trust company’s permission
to give the undertaking required. In a letter of January 24 the purchaser’s
solicitors replied, after intermedi-
must be signed by Barclays Bank and not by the trust company. It was open to
question whether the purchaser’s solicitors were strictly entitled to change
the nature of their requisition at this late stage, since clause 10 (4) and (5)
of the relevant conditions, which were the Law Society’s General Conditions of
Sale 1973, seemed to preclude a purchaser from substituting a new requisition
outside the seven-day period therein specified. However, the point was wholly
academic, because the vendors were clearly able and willing to provide the
sealed receipt of Barclays Bank, the trust company, or both, according to the
preferences of the purchaser. In their letter of January 24, the purchaser’s
solicitors expressly disclaimed that any re-execution by Mr Grazebrook would be
required.
Time went by
without the purchaser’s solicitors seeking any appointment for completion,
despite reminders from the vendors’ solicitors. On January 25, four days after
the revised date for completion, the vendors’ solicitors served a notice to
complete under clause 19 (2) of the conditions. On January 29 the purchaser’s
solicitors rejected the notice on the ground that the so-called defect in title
had not been cured at the date when the notice was served. On February 5 the
truth was out. The purchaser’s solicitors wrote to the vendors’ solicitors
explaining that the purchaser’s financial arrangements had broken down but that
she was trying to obtain finance elsewhere. They set out the form of receipt
required from Barclays Bank, and additionally, ‘in view of our client’s present
situation,’ declined to accept an undertaking by the vendors to produce such
receipt. On February 27, five days after the expiry of their notice to
complete, the vendors’ solicitors wrote forfeiting the purchaser’s deposit, and
on May 24 the property was resold by the vendors for £38,000. He (his Lordship)
was of the clear opinion that the notice to complete was validly served on
January 25, with the result that the vendors were entitled to forfeit the
deposit on account of the purchaser’s failure to complete. The only point taken
by the purchaser’s solicitors in the time permitted was a point which the
vendors were prepared to meet; the need for proof that the trust company had
become entitled in place of Barclays Bank to receive the mortgage money. The
vendors’ solicitors offered to meet that point by procuring the sealed receipt
of both or either of the two companies. In these circumstances the vendors’
solicitors were entitled to serve a notice requiring completion within 21 days,
even though at the date of such service such receipt had not been actually
obtained. It was not, in his (Brightman J’s) judgment, necessary for the
document to be actually executed before the notice to complete was served,
provided it was clear that the vendors would be able to produce it on
completion. In his opinion there were no merits, legal or otherwise, in the
plaintiff’s case, and the vendors were entitled to forfeit the deposit.
The claim was
dismissed, and judgment given for the defendants on the counterclaim. On the
basis of his Lordship’s judgment, the parties came to terms and judgment was
entered by consent for the defendants for £1,986 damages, in addition to the
retention of the deposit, and costs.
