Vendor and purchaser — Sale agreement — Completion — Estoppel — Purchaser exercising option to purchase land — Completion date determined — Vendors failing to complete — Purchaser giving 10 days’ notice to complete — On completion date purchaser’s solicitor asking vendors’ solicitor whether vendors requiring extension of time — Vendors’ solicitor requiring instruction and requesting to revert back — Vendors’ solicitor not reverting back — Purchaser failing to complete — Whether vendors’ solicitor under duty to revert back to purchaser’s solicitor — Whether vendors estopped by conduct from contending that contract rescinded
In 1985, a bungalow set in 2.5 acres of land (the property) was sold to the respondents subject to an option to repurchase within 15 years. The seller required the option because if adjoining playing fields, which it retained, could be developed, it would require the property because it was likely to provide the sole means of access to the fields. The option provided that the most recent edition of the national conditions of sale as at the date of the exercise of the option should apply, and that completion would take place at the office of the seller’s solicitor or as the seller specified. It also provided that the price was to be determined by an independent valuer.
In 1997, the appellant acquired the playing fields and took an assignment of the benefit of the option. In October 2000, it exercised the option, and, in June 2001, an independent valuer determined the price of the property at £257,500. The respondents were unhappy both about having to leave the property and with the price. The appellant enhanced the offer, and the respondents accepted it. However, since a contract was not exchanged, the appellant gave notice in August 2003 that it would enforce the terms of the option; 60 days were given for completion. Completion did not take place, and the appellant served a notice to complete “within ten working days”. On 22 December 2003, the appellant’s solicitor faxed an offer to extend the date for completion by 10 days, but the respondents’ solicitor did not see that offer at the time. On the day of completion, namely 2 January 2004, when the respondents were ready and able to complete, their solicitor became aware for the first time that the appellant had earlier offered to extend the completion date to 9 January. On 5 January, the appellant’s solicitor sent out requisitions on title and put itself in funds to complete. However, the appellant did not complete on 2 January, and, on 8 January, the respondents’ solicitor gave notice to the appellant that it had rescinded the contract under standard condition 7.5.2.
In proceedings by the appellant to enforce the option, the trial judge found that, on 2 January, when the respondents’ solicitor first heard about the offer to postpone completion, he said that he would have to obtain his clients’ instructions; he was asked to revert back to the appellant’s solicitor. However, he did not; he was of the view that the appellant would be unable to complete on 2 January, and that it would therefore lose the right to do so. The trial judge also found that the respondents’ solicitor did not agree to a postponement, or induce the appellant’s solicitor to believe that his clients had agreed to one; it was not unconscionable for the respondents to deny that time had been extended. The appellant appealed, contending that the conduct of the respondents’ solicitor, in not reverting back with his clients’ instructions with at least a negative reply, had given rise to an estoppel by conduct because a “no” answer at a later date would have put the appellant’s ability to complete out of its reach.
Held: The appeal was dismissed. The respondents’ solicitor had not been under a duty to reply on 2 January. Viewed objectively, no reasonably competent solicitor having conduct of an important completion would have understood from the silence of the other side that it was agreeing to postpone completion. By not communicating again on 2 January, the respondents’ solicitor had not agreed to a postponement. No estoppel arose. The trial judge had been entitled to conclude that a party to an agreement to sell and buy land would have no right to insist upon completion outside normal office hours unless a special arrangement had been made.
The following cases are referred to in this report.
Legione v Hateley (1983) 152 CLR 46
Northstar Land Ltd v Brooks [2005] EWHC 1919 (Ch)
Reardon Smith Line Ltd v Ministry of Agriculture, Fisheries and Food [1963] AC 691; [1963] 2 WLR 439; [1963] 1 All ER 545; [1963] 1 Lloyd’s Rep 12, HL
This was an appeal by the appellant, Northstar Ltd, against a decision of Judge Toulmin CMG QC, sitting as a deputy judge of the Chancery Division, dismissing a claim by the appellant for declaratory and other relief against the respondents, Maitland Brooks and Jacqueline Brooks.
Gary Cowen (instructed by Faegre Benson Hobson Audley LLP) appeared for the appellant; Malcolm Warner (instructed by Drew Jones, of Coventry) represented the respondents.
Giving judgment, Ward LJ said:
Issues
[1] Three main issues have been explored in this appeal and can be summarised as follows:
(1) If in the mid-afternoon of the day fixed for the completion of the sale of land the purchaser’s solicitor asks the vendors’ solicitor on the telephone whether time for completion should be extended for a week and the vendors’ solicitor said that it will take its clients’ instructions and revert back, are the vendors estopped by their solicitor’s conduct in not responding the same afternoon from denying that the time for completion had been so extended? The judge held that they were not so estopped.
(2) As counsel for the vendors dramatically put it in his skeleton argument, does a solicitor have to keep its office open until midnight |page:68| on the day of completion to await the possibility that the purchaser will complete in time? The judge held that, in the circumstances of this case, the deadline for completion was 6pm or a few minutes thereafter.
(3) Do the moneys to complete the purchase have to be cleared through the purchaser’s solicitor’s client account before a bank draft can be obtained or funds otherwise transmitted to the vendors’ solicitor? The judge held that the payment of the completion moneys should be made only from cleared funds in order to comply with r 22 of the Solicitors’ Accounts Rules 1998.
[2] These issues arise in this appeal from the order made by Judge Toulmin CMG QC, sitting as a deputy judge of the Chancery Division on 27 September 2005, when he ordered that the purchaser’s claim for specific performance of the contract for the sale of the vendors’ property be dismissed: see [2005] EWHC 1919 (Ch).
Facts
[3] Judge Toulmin gave a long and careful judgment. At the invitation of the court, counsel, Mr Gary Cowen, for Northstar Land Ltd, the appellant, and Mr Malcolm Warner, for the respondents, Mr Maitland Brooks and his daughter Ms Jacqueline Brooks, very helpfully provided us with a list of agreed facts and issues and so I can deal with the background more briefly than the judge was able to do.
[4] The dispute is concerned with the sale of the respondents’ land in Marston Green, Birmingham. The property is a detached bungalow set in approximately 2.5 acres of land that backs onto a large area of playing fields. The property and the playing fields were owned by 3M Pension Trustees Ltd. In 1985, the pension fund was persuaded to sell the property to the respondents and the late Mrs Brooks but on terms that the transferor had the option to repurchase the property as a whole. The transferor reserved this option because it knew that the playing fields had potential value if planning permission were ever granted for their development, something not at all certain in 1985 because the playing fields were still part of the green belt. If ever permission to develop were granted, the property was likely to provide the only means of access suitable for such a development. The option was exercisable at any time within 15 years from the date of the conveyance on 9 December 1985. The option provided that the terms of the most recent edition of the national conditions of sale as at the date of exercise should apply (here, the standard conditions 3rd ed) and they, in turn, at condition 6.2, provided that completion was to take place either at the seller’s solicitor’s office or at some other place that the seller reasonably specified.
[5] In March 1997, the appellant company purchased the playing field area and took an assignment of the benefit of the option.
[6] By 2001, the appellant had become aware of the possibility that the playing field area would be included within the local plan for residential development at some time in the future. Consequently, on 4 October 2000, the appellant exercised the option to purchase the land. The option provided for an independent valuer to assess the value, and the price was eventually determined in June 2001 in the sum of £257,500, an amount much less than the respondents had expected and wanted.
[7] It was an unsettling time altogether for the respondents, exacerbated by ill health, and the appellant generously offered the respondents enhanced terms, in effect to put the property on the open market and to give the respondents one-third of the difference between the sale price and the best offer that was received as though it were to be sold on the open market. Not surprisingly, that offer was accepted.
[8] There was then considerable delay as the parties struggled unsuccessfully to agree the exact terms of the enhanced contract. Planning permission having been granted in July 2003 for the construction of five dwellings, but a contract on the enhanced terms not having been exchanged, the appellant gave notice, on 12 August 2003, that it would enforce the terms of the option. Sixty days were given for completion, and although the draft transfer was sent for approval, completion did not take place.
[9] Consequently, on 16 December 2003, the appellant served notice to complete on the respondents, requiring completion “within ten working days of service”. This letter also informed the respondents that if they failed to complete, proceedings would be issued immediately in the High Court for an order for specific performance and/or a claim for damages. Perhaps it was because of that threat that the notice to complete was prepared by Ms Susan Albery, an assistant solicitor in the litigation department, not Mrs Elizabeth Ruff, the solicitor in the conveyancing department of the appellant’s solicitor, Faegre Benson Hobson Audley LLP, whose offices are at 7 Pilgrim Street in the City of London. On the same date, the appellant’s solicitor sent a further letter without prejudice and subject to contract offering once again to proceed with the purchase on the enhanced terms on condition that the draft contract that was enclosed with that letter be accepted without further amendment.
[10] That correspondence was received with dismay by the respondents. They, not surprisingly, understood that the 10-day time limit for completion would expire on Boxing Day. They reported their plight to the Birmingham Post, which eventually ran the story on 24 December 2003 under the headline “Family Faces Boxing Day Eviction”. In fact, because 10 working days were given for completion, the time for completion, as both solicitors knew, was 2 January 2004.
[11] At 3.45pm on Monday 22 December 2003, Ms Albery sent an e-mail message to Mrs Ruff and the supervising partner, Mr Simon Smith, informing them of the enquiries being made by the journalists from the Birmingham Post concerning the case. She added:
Northstar are aware of the need to be ready to complete should it be necessary to do so at any time before 2nd January, the date when the Notice to Complete timetable ends. The form of contract as drafted by Liz is on the file. We are agreeing a revised date of 9th January for when time for compliance with the Notice to Complete expires with the owners’ solicitors. If they fail to complete by then, proceedings will be issued, which are being drafted by counsel in readiness.
[12] On the same afternoon, that is, 22 December 2003, the appellant’s solicitor wrote to the respondents’ solicitor in these terms:
Exercise of option over 78A Coles Hill Road
We refer to our previous correspondence and to your message seeking clarification as to when the ten working days for complying with the Notice to Complete expires.
By our calculations, the expiry date is 2nd January 2004. However, having taken our clients’ instructions, our clients are prepared to extend the deadline until 9th January, 2004 to take account of the Christmas and New Year period.
That letter was sent “by DX and fax” and the time of the facsimile transmission was 4.52pm.
[13] Both Ms Albery and Mrs Ruff took leave at the end of that day and so were absent from the office until their return on Monday 5 January.
[14] Mr Paul Drew was and is the solicitor acting for the respondents. He is a partner of the small firm Drew Jones practising in Coventry. Since the fax was not marked “urgent”, it was not immediately drawn to his attention and he did not see it by the time his office closed for the Christmas holidays at noon on 23 December 2003. His firm closed for an extended Christmas holiday, being due to open again for business on Monday 5 January. He was, however, aware of the need to complete the transfer on Friday 2 January. At 12.13 on 2 January, he sent an e-mail message to Ms Albery with a copy to Mrs Ruff on the subject of the exercise of the option, informing them that he was sending the e-mail from his home because he would be in the office for only part of the day. He gave them his mobile telephone number and e-mail addresses. He said:
I confirm that my firm received from you by fax on 16th December 2003 the Notice to Complete. The draft transfer sent by you in August is approved subject to the deletion of Kathleen Mary Brooks who has recently died.
We have deleted her name from the transfer and are arranging for our clients to initial the alteration in the next hour. We undertake to discharge the Halifax Plc charge and forward to you the DS 1 within three days of receipt of the same.
We note that we have yet to receive from you any requisitions on title. |page:69|
Shortly afterwards, he opened his office specially in anticipation of completion taking place that day. His clients, the respondents, attended upon him making him aware, as if he did not know it, that although they were ready to vacate the property, they were really very reluctant to complete a transaction that they considered to be on terms that were unfavourable to them. Mr Drew telephoned Faegre & Benson at around three o’clock and asked to speak to Mrs Ruff. She was not in the office. He left a message, saying that the matter was urgent and related to the completion of the option. His call was returned at around 3.15pm when he was informed that neither Ms Albery nor Mrs Ruff were in the office. Mr Drew emphasised that the matter could not wait until the following Monday.
[15] At 3.40pm, Ms Albery telephoned Mr Drew from home on her mobile telephone. This is the crucial conversation that gives rise to this litigation and I will continue the narrative weaving in the judge’s findings.
Crucial conversation
[16] The background to this telephone call was this. So far as Ms Albery was concerned, the judge found:
134. Ms Albery was a litigation solicitor and not a conveyancer and she was not as aware of the implications of the Notice to Complete as a conveyancer would have been. If Faegre Benson had been prudent, their client account would have been put in funds before 22nd December 2003 in order that they would have been in a position to complete very quickly had this been required.
135. The fact that the requisition [on title] and completion forms had not been sent and the money for the purchase had not been put in their clients’ account is indicative of Faegre Benson and their client’s lack of forward planning and readiness to complete.
…
139. Ms Albery said in evidence that she expected someone else to take the matter over [when she left the office on 22 December] and conceded in cross-examination that it was an open question whether or not the completion had been postponed.
…
145. The email [sent by Mr Drew at 12.13pm to Ms Albery] was sent in good time to enable completion to take place that day if both parties were ready to complete.
[17] So far as Mr Drew is concerned, his position was:
149. Mr Drew said that he strongly suspected that by then [the time of the crucial telephone call] Faegre Benson would not be in a position to complete that day but he did not ask her that question. Mr Drew explained to Ms Albery that his clients were in his office in order to complete the sale and the purchase of [the] property.
150. Ms Albery told him that her firm had sent a fax and letter before Christmas, extending the date for completion to 9th January 2004. This was the first time that Mr Drew and his clients had heard of the possible extension of the deadline for completion.
[18] As for the conversation itself, the judge found:
152. Ms Albery said that Mr Drew told her he would have to obtain his client’s instructions. Ms Albery asked Mr Drew to revert back to her. Mr Drew was not, on Ms Albery’s version, asked to agree to a postponement of completion but to say which terms would apply. In answer Ms Albery said he said simply that he would take his clients’ instructions.
153. It was of course open to Ms Albery in view of the seriousness of the position, to ring Mr Drew back to find out the answer to her question. She said that the fact that Mr Drew did not ring back was sufficient to make her think that he was agreeing to the extension of time to 9th January or at least to a time after he had returned her call and answered the question which she said she posed.
154. Mr Drew explained in his witness statement that in his view, since he had received no deposit from the purchaser, Northstar were already in breach of clause 6.8.4 of the Standard Conditions of Sale. Further he understood that at that time of day it would be impossible to arrange a telegraphic transfer, which would place the defendants in funds before close of business that day.
155. In those circumstances he thought that Northstar were already in breach of their own Notice and would lose the right to require Miss and Mr Brooks to complete in accordance with the option.
156. After the telephone call he so advised Mr and Miss Brooks and they instructed him that they wished to treat the claimants’ failure to complete as a fundamental breach of the option contract. Mr Drew and his clients made a conscious decision not to respond to Ms Albery and he did not do so.
157. I have little doubt that an experienced conveyancer from Faegre Benson would have understood the need for an immediate reply from Mr Drew and knowing that he was with his clients would have telephoned back.
158. The conflict of evidence relates to which question Mr Drew was expected to respond to. It may be that they were at cross-purposes but I prefer Mr Drew’s evidence that the question which he said he would consult his clients about was whether or not they agreed to extend the completion date to 9th January.
159. Miss Albery was in any event given the neutral reply that Mr Drew would telephone back…
[19] The judge held:
159. … She [Ms Albery] was not entitled to assume that, in the absence of a positive reply, he had agreed to postpone completion to 9th January 2004 or that the question was in abeyance until (her version of events) [which version he rejected] the Brooks had chosen between the regular and the enhanced terms.
160. Ms Albery knew that Mr Drew had very properly been trying to talk to someone at her firm earlier in the day and had left a message only a short while before to say that the matter was urgent and could not wait until the following Monday.
161. In the course of the telephone call, Mr Drew said nothing which could properly be construed as agreeing to a postponement. I accept his evidence that he thought it was already too late to complete that day.
162. I find that he did not intend to mislead Ms Albery into thinking that the completion could be postponed until 9th January 2004.
…
191. I find on the evidence that the [respondents], and specifically Mr Drew acting as their agent, did not induce the claimants’ solicitors into believing that they had agreed that the time for completion would be extended to 9th January 2004 and that it was not unconscionable for the defendants to deny that time was extended.
[20] Cutting the story short, on Monday 5 January, Mrs Ruff sent requisitions on title and the next day, the purchase price was paid into the client account. She chased for a response. What she received in Mr Drew’s letter of 8 January was notice that the vendors had rescinded the contract under standard condition 7.5.2 for failure to complete on 2 January. After an angry exchange of correspondence, the purchaser brought this claim for specific performance.
Promissory estoppel: Discussion
[21] The appellant has to show that by words or conduct, one party to a transaction made to the other a clear, unequivocal, unambiguous promise or assurance that has intended to affect the legal relations between them or was reasonably understood by the other to have that effect.
[22] This case is presented on the basis of an estoppel arising by conduct, not by oral representation. It is not contended that in saying to Ms Albery that he would take instructions and revert back to her, Mr Drew made any representation that affected their legal relations. Ms Albery’s own evidence acknowledged that. When cross-examined she said:
Q. When a solicitor says to you they are going to take instructions you know that they are not committing themselves one way or another, do you not?
A. Yes.
…
Judge Toulmin: Forgive me, this is a general question that you are being asked. When a solicitor says that they are going to take instructions you know that they are not committing themselves one way or another and you have no idea until they have done –
A. As to which they choose, that is correct.
Q. Or they may choose something else?
A. That is correct.
[23] The researches of Mr Warner have, since the hearing, produced persuasive authority from the High Court of Australia confirming this. It is Legione v Hateley (1983) 152 CLR 406. There, purchasers of land were put on notice that unless they paid the price by 10 August, the contract of sale would be rescinded. On 9 August, the purchasers’ solicitor telephoned the vendor’s solicitor and spoke to the secretary of |page:70| the partner in the firm who was handling the matter, asking for a week’s extension of time. The secretary said: “I think that’ll be alright, but I’ll have to get instructions.” The question was whether that conversation could give rise to an estoppel. Mason J and Dean J held, at p440:
Plainly that statement could not be treated as an agreement or representation that the vendors would extend the time for settlement until 17 August 1979. Nor can that statement properly be seen as containing any representation that, pending communication of instructions, the purchasers could, with impunity, disregard the time allowed for settlement by the notice of rescission. To the contrary, Miss Williams’ statement that she thought it would be all right but would have to get instructions intimated that she was not in a position to agree to what was, on a fair interpretation of Mr Gardiner’s account of the conversation, being put to her as a fait accompli.
I agree.
[24] Gibbs CJ and Murphy J took a different view. They decided, at p422:
But when Miss Williams said that she thought it would be all right, and that she would have to get instructions, she must have meant, and the purchasers’ solicitors were entitled to believe, that the position was being left in abeyance until the instructions were received.
Integral to their decision, as it seems to me, was the fact that the secretary had added that she thought that it would be alright. No such hope was offered by Mr Drew. On the contrary, it is perfectly plain that Mr Drew was being very cautious and non-committal in his response to Ms Albery because he had already formed the view that the appellant was in breach and that it was too late for them to complete that day. He was anxious not to compromise his clients’ good fortune that the other side seemed to be in disarray.
[25] The appellant’s case is, therefore, pleaded and presented to us as an estoppel by conduct, the conduct being the failure to revert back to Ms Albery. Ms Albery gave this evidence about it:
Judge Toulmin: On what basis did you conclude that an extension of time had been accepted to 9th January, had been accepted by Mr Drew and the Brooks family?
A. I believed it had been accepted because there was no further discussion about it. They did not say they did not accept it and they never came back to say it was not accepted, having gone away and read the fax assuming they had not read it previously. I was surprised that it had not been read seeing as it had been there since 22nd December.
Mr Warner: Why do you say a non-reply necessarily amounted to the reply “Yes, we accept”.
A. Because generally if I did not accept something I would actually make it clear that I did not accept something rather than leaving it.
Q. Why do you say in the circumstances here from your conversation with Mr Drew, a non-reply from Mr Drew that day for instance necessarily was the same as “I accept”?
A. I just took a non-reply to be an acceptance.
[26] Mr Cowen submitted, as he put it in his written skeleton argument:
If the answer [to the question “Is your client prepared to extend time to 9th January?”] was “No”, then it must follow as a matter of logic that the answer would need to have been communicated to Ms Albery on 2nd January 2004 because if a “no” answer is communicated later, the respondents have put the appellant’s ability to complete on time out of their reach. … Thus, when there is no answer at all on 2nd January Ms Albery is entitled to assume, as she did, that there was an agreement to the extension of time until 9th January 2004. The only answer to her question which was consistent with a failure to respond on 2nd January was a “yes”.
[27] It seems to me that the fallacy in this argument is the assumption that the answer “would need to have been communicated” as though there were some duty on Mr Drew to do so. He was under no such duty. True it is that r 19.01 of the Solicitors’ Rules requires a solicitor to “act towards other solicitors with frankness and good faith”, but, as the judge emphasised in [64] of his judgment, the rule adds “consistent with his or her overriding duty to the client”. Here, the overriding duty to the Brooks was to do nothing that alerted Ms Albery to her need on behalf of her client to arrange for completion that afternoon. The judge, rightly it seems to me, found that Mr Drew did not intend to mislead Ms Albery into thinking that completion could be postponed. Ms Albery had said nothing in the conversation to indicate that, being aware of her own responsibility to ensure that completion took place that day, she would need an answer within a short time. She knew that the clients were in the office. She did not insist upon that quick response. Nor did she take any step whatsoever to find out what the answer was. As the judge found, again correctly in my view, an experienced conveyancer would have understood the need for an immediate reply and knowing that Mr Drew was with his clients would have telephoned back to find out what was happening.
[28] In my judgment, just as the statement “I will take instructions” is equivocal, so, too, was the silence that followed. Viewed objectively, no reasonably competent solicitor having conduct of an important completion like this would have understood from the silence of the other side that it was agreeing to postpone completion. It was, after all, Mr Drew who began chasing Faegre Benson shortly after noon by his e-mail, which clearly indicated his clients’ readiness to complete. His messages after three o’clock reaffirmed that the message was urgent and related to completion of the option. It should have set alarm bells ringing, but Ms Albery appears to have been deaf to them. There was certainly, in my judgment, no justification whatever for her believing that the vendors’ manifest readiness to complete had been replaced by a willingness to postpone that completion for a week.
[29] Two findings by the judge really lie at the heart of this appeal. They were:
172. I should at this stage deal with the allegation by the claimants that Mr Drew behaved improperly. In my view he did not. He said nothing to mislead the claimants. Indeed, he was the person who had alerted Faegre Benson in good time on that day. Subject to acting properly, he had an overriding duty to his clients.
173. If Faegre Benson had responded promptly to his email at 12.13pm on 2nd January 2004 it is likely that completion could have taken place that day. The problem rested entirely with the claimants’ solicitors, who in addition a) did not seek an immediate response to their email [fax] sent at 4.52pm on 22nd December, the last full working day before Christmas; b) did not themselves get in touch with Drew Jones early on 2nd January 2004; c) did not ring back within a few minutes to find out what instructions Mr Drew had received; d) had not placed their client account in funds so that they could complete immediately on 2nd January 2004 if this was required.
[30] The inevitable inference to draw from this evidence was that Mr Drew did not intend Ms Albery to believe that his clients had accepted the offer to extend the period for completion until 9 January, nor could his words reasonably be understood to convey such a promise or assurance. On the contrary, his words were correctly understood to be words of prevarication. His silence and his inaction thereafter could not reasonably convey any other message. His inaction cannot reasonably be said to have induced in Ms Albery the belief that the vendors had accepted the purchaser’s offer to extend time. She should have known from all that was said that afternoon that the vendors were there ready, willing and able to complete. What advantage could there be to postpone vacating the property for one week in those circumstances? The answer is none. The offer of an extension of time had come too late. The sad truth is that Ms Albery had deluded herself. When, on the afternoon of 22 December, she sent her internal e-mail informing her colleagues that “we are agreeing a revised date of 9th January for when time for completion with the Notice to Complete expires with the owners’ solicitors”, she had already convinced herself that the owners were bound to agree. That is why she did nothing to prepare for completion on 2 January. That is why she was contemplating the issue of proceedings in anticipation of default on 9 January, not 2 January. Nothing said or done, or not done, by Mr Drew on the afternoon of 2 January changed the misconception under which she laboured.
[31] In my judgment, the conclusion of the judge that there was no estoppel is unassailable. |page:71|
Second and third issues: How late in the day can completion take place and what arrangements have to be made for clearing funds in the client account?
[32] As Mr Cowen acknowledged, if he failed on his first point, these issues do not arise. In those circumstances, I do not consider it necessary to address the submissions made to us by Mr Cowen. In particular, I do not address the accuracy or inaccuracy of para 3.4.1 of the 12th edition of the Law Society’s Conveyancing Handbook, which suggests that “in order to avoid breach of Rule 22 Solicitors’ Accounts Rules 1998, payment of completion money should only be made from cleared funds in client account”. Some comment on Mr Cowen’s submission that completion can take place at any moment before midnight on the last day may, however, be helpful.
[33] The judge concluded, and, in my view, was entitled to conclude that:
168. … if it had been possible to complete the necessary steps and get to Coventry that night, about which I have some serious doubts, it would only have been much later that night [than 8pm] that the claimants would have been ready to complete in Coventry.
169. In my view Mr Drew would not have been required under the contract to complete in his office even at 8pm let alone later. Mrs Ruff, an experienced conveyancer, had as I have already said, had to concede in evidence that in her opinion she would have had no right to insist on completion outside normal office hours unless a special arrangement was made. No special arrangement had been made.
[34] He applied an observation in the speech of Lord Devlin in Reardon Smith Line Ltd v Minister of Agriculture, Fisheries and Food [1963] AC 691, at p738:
If I employ a builder to repair my dwelling-house and he agrees to complete the work within six days or pay a penalty, that does not mean that he can keep me awake by working from midnight to midnight in order to finish the job. He can only work such hours as are reasonable or customary.
That led the judge to conclude that the deadline for completion on 2 January would have been “at 5.30pm or 6pm or perhaps a few minutes later”. He rejected the appellant’s contention that the deadline was midnight on 2/3 January 2004. I observe that there was no expert conveyancing evidence on this matter, only the evidence of Mrs Ruff. I am far from suggesting, especially in the light of the limited evidence that he had, that the judge was wrong to decide as he did, but I am anxious not to give a judgment of this court that might be taken as a judgment of general and inflexible application to all conveyancing transactions.
[35] Mr Cowen drew our attention to the Law Society’s standard conditions of sale (3rd ed), which contain, in para 1.1.1(n), a definition of “working day” without any reference to the time of day that starts and ends the working day, to clause 1.3.5 providing for notices or documents received after 4pm on a working day being treated as having been received on the next working day, and so forth. We also heard his submission about whether completion must take place within normal office hours and, if so, what such normal office hours are or whether, as he contended, completion can take place up to midnight. It may be that the Law Society will wish to consider whether some (and if so what) express provision should be made in the standard conditions of sale to fix the ordinary time limit for completion on a working day. This is entirely a matter for the Law Society, and I say no more about it.
Conclusion
[36] Sir Peter Gibson gave permission to appeal only “with considerable hesitation and without wishing to give the appellant undue encouragement as to the outcome of the appeal”. Having heard the arguments fully developed by Mr Cowen, we did not consider it necessary to call on Mr Warner. In my judgment, the judge was plainly right to find that Mr Drew’s failure to revert back to Ms Albery could not possibly amount to a promise or assurance not to require completion on 2 January. Since the judge found, correctly, that the respondents were ready, willing and able to complete on that day but that the appellant was not, the appellant’s claim for specific performance was rightly dismissed by the judge. In my judgment, this appeal must be dismissed.
Smith LJ said:
[37] I agree
Cresswell J said:
[38] I also agree.
Appeal dismissed.
