Contract for sale of land – Notices to complete – Appellant vendors claiming sale price increased by oral agreement – Appellants serving notices to complete at higher price – Respondent purchaser failing to complete – Court holding no variation of price agreed – Whether respondent entitled to return of deposit – Whether notices to complete invalid – Whether appellants ready, willing and able to complete where insisting on payment of higher sum – Appeal dismissed
Under three underwriting agreements, containing general conditions based on the RICS common auction conditions (2002), the respondent agreed to purchase three adjacent residential properties from the appellants at a reserve price in the event that the appellants failed to sell the properties for that amount at auction. The respondent paid agreed sums by way of deposit under the agreements. The respondent subsequently became entitled and bound to purchase the properties at the reserve price. A dispute arose as to the sum payable, with the appellants claiming, and the respondent denying, that there had been an oral agreement to increase the reserve price for each property by £10,000. The respondent did not complete on the agreed completion date or comply with notices to complete served by the appellants. Those notices indicated the higher sum as being due on completion. The appellants purported to rescind the contracts and forfeit the respondent’s deposits.
The respondent brought proceedings for the return of his deposits. He contended that his failure to complete was due to the appellants’ own breach of contract in refusing to complete for the lesser sum and that, as a result of that refusal, they had not themselves been ready, willing and able to complete when they served the notices to complete.
The respondent’s claim was allowed and the appellants’ counterclaim, for forfeiture of the deposit and damages for breach of contract, was dismissed. The judge found that there had been no agreed variation of the reserve price, that the lesser sum was payable and that the appellants had not been ready to complete at the agreed price where they were insisting on the higher figure. Accordingly, he held that the notices to complete were of no effect. The appellants appealed.
Held: The appeal was dismissed.
Whether the notices to complete were valid turned on the object and terms of those notices construed in their contractual setting. The notices required the respondent to complete contracts that were different from the contracts into which he had actually entered with the defendants. The prices that the appellants were requiring the respondent to pay for the properties were more than he had in fact agreed to pay. Had the respondent turned up with a payment of the lesser sum, the appellants would have refused to complete the sale of that property by execution of a transfer unless they were paid the higher figure. That would have been a repudiation of the contract by the appellants. The respondent was not in breach of contract by reason of his failure to comply with notices to complete that required him to pay larger amounts than he was contractually bound to pay. The notices were invalid, since they were not notices to complete the original agreements at the reserve prices but instead related to non-existent contract terms that had not been established.
In those circumstances, the appellants could not say that, at the time of the service of the notices, they were “ready to complete” the contracts that had actually been agreed and were legally binding. The party giving notice to complete had to be ready and willing to fulfil its own outstanding obligations under the contract: Quadrangle Development & Construction Co Ltd v Jenner [1974] 1 WLR 68 applied. The appellants were not ready and willing to fulfil their obligations unless the respondent paid more to them than he was legally bound to do. The notices to complete amounted to repudiation by the appellants of the contracts that had been agreed.
Christopher Nugee QC and Pepin Aslett (instructed by Abbey Solicitors, of Manchester) appeared for the appellant; David Gilchrist (instructed by Property Legal, of Manchester) appeared for the respondent.
Sally Dobson, barrister
