Notice to complete — Completion date — Request to vendor’s solicitor for time extension — Whether failure to respond on the day amounting to agreement to extension — Appellant’s claim for specific performance on basis of extension refused — Appeal dismissed
The appellant company exercised an option to purchase the respondents’ property, which consisted of a bungalow and land. Under the option, the standard conditions of sale were to apply and an independent valuer was to assess the purchase price. The respondents were unhappy with the valuation, and entered into protracted negotiations for better terms. Ultimately, the appellant served a notice to complete requiring completion of the sale within 10 working days.
On the final day, the respondents attended the offices of their solicitor (D) and indicated that, despite their reluctance to complete the transaction on terms that they considered were unfavourable to them, they were ready to vacate the property. That afternoon, the appellant’s solicitor (F) telephoned D to suggest that the time for completion should be extended by a week. D informed F that he would take his clients’ instructions. At that stage, F did not have cleared funds in its client account to pay the deposit, and D was of the view that the appellant would be unable to complete the purchase by close of business that day, putting it in breach of its own notice to complete. He advised the respondents accordingly, and was instructed to treat a failure to complete by the appellant as a fundamental breach of the option contract. D did not respond to F’s query as to the time extension.
The appellant brought a claim for specific performance of the contract for sale. The respondents relied upon the appellant’s own unreadiness to complete on the given day. The appellant submitted that the respondents should be taken as having agreed to the time extension, and that they were estopped from arguing otherwise by D’s failure to respond to F’s query. It argued that that failure was consistent only with an agreement to extend time, since, if the answer was “no”, D would have had to inform F on the day in order not to put the ability to complete on time out of the respondents’ reach. The judge rejected that argument and dismissed the claim. The appellant appealed.
Held: The appeal was dismissed.
The judge had correctly found that D’s failure to revert to F could not amount to a promise or assurance that completion would not be required on the agreed day. D had been under no duty to communicate a “no” answer to F. Although r 19.01 of the Solicitors Rules required D to act towards other solicitors with frankness and good faith, he had been under an overriding duty to his clients, the respondents, to do nothing that would alert F to the need for its client to arrange for completion that afternoon. D’s indication that he would take instructions was equivocal, and so too was the silence that followed. D’s words had been correctly understood as words of prevarication, and his silence and inaction thereafter could not reasonably have conveyed any other message. Viewed objectively, no reasonably competent solicitor conducting an important completion would have understood from the other side’s silence that they were agreeing to postpone completion. An experienced conveyancer would have insisted upon a quick response and would have telephoned to find out what was happening. Since the respondents had been ready, willing and able to complete and the appellant had not, it was not entitled to specific performance.
Per curiam: The definition of a working day in the standard conditions of sale did not specify the time at which the working day began and ended, raising the question of whether completion had to take place within normal office hours or whether it could take place up to midnight, requiring a solicitor to keep the office open for the purpose. The Law Society might wish to consider whether some express provision should be made to fix the ordinary time limit for completion on a working day.
Gary Cowen (instructed by Faegre Benson Hobson Audley LLP) appeared for the appellant; Malcolm Warner (instructed by Drew Jones, of Coventry) appeared for the respondents.
Sally Dobson, barrister
