Contract of sale — Long lease — Lease in common form — Condition of no objection to terms of lease — Representation that no fire escape through adjoining flat — Lease containing grant and reservation of easements to accommodate fire escapes — Anticipatory breach — Claim for declaration and return of deposit allowed — Counterclaim by vendor for specific performance dismissed
The defendant is the owner of a long leasehold interest in Block 1, London Yard, Manchester Road, London E14, a six-storey block of flats in London Docklands. On November 10 1986, before the block was erected, the plaintiff company entered into a contract to purchase a 999-year lease of plot 156, intended as one of the proposed flats. Prior to the contract the managing director of the plaintiff company was assured that the means of escape from each pair of flats in case of fire was not, unlike the arrangements in an earlier development, via a linked balcony between and through such linked and paired flats.
Before the exchange of contracts, the defendant stated that the leases would be in standard form and might have to be amended prior to exchange. Following the exchange, the plaintiff was informed that means of fire escape would be by a linked balcony to and from the adjoining flat and that the lease would be subject to, and with the benefit of, cross-easements between the subject flat (plot 156) and the adjoining flat to allow the occupants of either flat a means of escape.
The plaintiff sought a declaration that: (1) the form of the lease proffered as the basis of completion did not comply with the form of the lease under the contract and that the plaintiff was entitled to rescind the contract and recover the deposit of £12,100; alternatively, (2) if the plaintiff is not entitled to rescind, it is entitled to have the purchase price abated. The defendant, by late amendment, sought a declaration to the effect that the plaintiff could not rescind by reason of a letter of February 7 1989; that letter showed the plaintiff’s apparent willingness to complete under the original contract terms.
Held The issues raised by the summons were determined as follows: (1) There was an anticipatory breach of the contract by the defendant who, by inserting the provisions for cross-easements for the fire escape, had wrongly proffered a lease not in the form agreed. (2) The breach entitled the plaintiff to “rescind” the contract. The principle in Flight v Booth (1834) 1 Bing 370 had no application where the matter complained of was not pre-existing but newly created by the vendor. (3) By reason of the form of the declaration sought, the plaintiff had not “rescinded” the contract by issuing the originating summons in the present action. (4) Had the matter arisen, the abatement of the purchase price would have been assessed at £2,500.
In relation to the cross-summons, the defendant had not served any notice to complete in accordance with the contract. Although there was no stringent hardship to the plaintiff, delay and laches, and the misrepresentation which induced the contract, prevented the court exercising its equitable jurisdiction to order specific performance against the plaintiff.
David Powell (instructed by A L Philips & Co) appeared for the plaintiff; and Beverly-Ann Rogers (instructed by Denton Hall Burgin & Warrens) appeared for the defendant.