Contract for sale of property — Assignment of purchaser’s rights — Assignee failing to complete — Purchaser paying purchase price — Whether repudiation of assignment — Whether purchaser entitled to transfer of property or merely lien over it — Claim allowed in part
The claimant entered into a contract to purchase a property from the first defendant. He subsequently assigned his rights under that contract to the second defendant and notified the first defendant of the assignment. The assignment agreement provided for a deposit to be paid to the claimant immediately, followed by a further sum on the completion date specified in the main contract of sale. The second defendant also undertook to complete the purchase of the property in accordance with the terms of the main contract and to indemnify the claimant against all claims and expenses under it.
The second defendant did not complete on the specified date, or on a later date specified in a notice to complete served on the claimant, who proceeded to complete the purchase by payment of the outstanding balance of the purchase price. He then brought proceedings, seeking a declaration that the second defendant had repudiated the assignment agreement by failing to complete the purchase. He contended that he was therefore entitled to forfeit the deposit and to obtain an order that the first defendant complete the sale by transferring the property to him. Alternatively, he claimed to be entitled to the outstanding sum owed by the second defendant under the assignment, plus other sums under the indemnity, in respect of which he claimed to have an equitable lien over the property. The second defendant did not dispute the existence of the lien. However, he submitted that the claimant could not reply upon any claimed repudiation, since the assignment was an absolute legal assignment executed in accordance with section 136 of the Law of Property Act 1925 and had been complete prior to the breaches complained of by the claimant. In response, the claimant submitted that the assignment only took effect subject to his rights under it.
Held: The claim was allowed in part.
On the proper construction of the assignment, it was complete and binding on all the parties, including the first defendant, to whom notice of it had been given, prior to the conduct relied upon by the claimant as amounting to a repudiation. It was not, therefore open to the claimant to accept such conduct as bringing the assignment to an end. Accordingly, he was not entitled to the declaration sought or to an order that the first defendant should transfer the property to him. However, he was entitled to a lien or charge over the property, which should be enforced by a sale with vacant possession.
Charles Douthwaite (instructed by Georgiou Nicholas) appeared for the claimant; Jonathan Ferris (instructed by Preston & Co) appeared for the second defendand; the first defendant did not appear and was not represented.
Sally Dobson, barrister
