Contract by correspondence — Whether later events resiling from contract — Whether letter made time of the essence — Whether breach of contract — Whether waiver of breach — Appeal by vendor trustee dismissed
In 1986 the appellant was appointed the trustee in bankruptcy to Mr Peter Dean, the respondent’s husband. The respondent and her husband were originally the joint proprietors of their home, 19 Rodney Avenue, Lytham St Annes, Lancashire. The beneficial interest in the house belonging to Mr Dean passed to the appellant. On February 16 1987 the respondent wrote a letter to the appellant offering to purchase the appellant’s interest in the house for £1,500 plus the surrender value of the mortgage endowment policy. That letter, which only came to light on the day of the trial, was answered on behalf of the appellant on February 27 1987 stating that the offer was accepted.
Later correspondence between the parties’ solicitors appears to have been conducted without knowledge of the letter of February 16. By August 3 1987 the proceeds of the endowment policy were paid to the appellant. After further correspondence between the parties, on July 21 1988 the appellant requested the respondent either to give up possession of the property or to agree to the acquisition of the appellant’s interest after a revaluation. The respondent declined and her claim that there was a binding contract for sale at the price agreed in 1987 was upheld by His Honour Judge Sellers in the Blackpool County Court (October 10 1989). The appellant appealed contending that as the contract was an open contract, and as completion had to take place within a reasonable time, a reasonable time had expired either by October 14 1987, when the respondent’s solicitors wrote making a less favourable offer, or alternatively by July 1988, when the appellant purportedly resiled from the contract. Accordingly, the respondent was in breach of contract and the appellant was entitled to resile from it.
Held The appeal was dismissed.
The appellant, by his solicitor’s correspondence, had at no time prior to July 1988 given any warning to the respondent that he intended to treat the contract as at an end unless she completed by a stated date. No formal notice or informal warning was at any time given to the respondent that she would be treated as being in breach of contract if she did not complete by a specified date. By reason of the circumstances, the fact that the appellant retained the surrender value of the endowment policy from August 1987 onwards and the general dilatoriness on both sides, there was no breach of contract to complete within a reasonable time as a reasonable time depends on the facts of each case. In the alternative, if the respondent was in breach of her obligation to complete within a reasonable time, the appellant had waived his right to so assert by his solicitor’s letter of April 5 1988 requesting a draft transfer.
Farrant v Oliver
(1922) 91 LJ Ch 758 distinguished.
Mark Halliwell (instructed by Ian Snipe & Co, of Lytham St Annes) appeared for the appellant; and John Lambert (instructed by Hugh Pond & Co, of Blackpool) appeared for the respondent.
