Urban Manor Ltd v Sadiq

Purchaser and vendor entering into contract of sale of property – Purchaser paying deposit – Vendor completing on purchase of property from third party – Purchaser failing to complete – Vendor rescinding contract and forfeiting deposit – Whether para 9 of the national conditions of sale limited time to make request under section 110(5) of the Land Registration Act 1925 – High Court held that contract had been effectively rescinded and vendor had been entitled to forfeit deposit – Appeal dismissed The plaintiff vendor entered into a contract dated December 2 1994 for the sale of a property with the defendant purchaser and a deposit was paid. The conditions provided that title was to be deduced in accordance with section 110 of the Land Registration Act 1925 and the National Conditions of Sale (20th ed). By virtue of national condition 9 the vendor was, inter alia, to deliver the abstract title as required by section 110. Section 110(5) stated ‘where the vendor was not himself registered as proprietor of the land . . . he shall at the request of the purchaser . . . and notwithstanding any stipulation to the contrary, either procure the registration of himself as proprietor of the land . . . or procure a disposition from the proprietor to the purchaser’. The plaintiff completed its purchase of the land from a third party and applied for registration as proprietor of the property. The defendant then gave notice under national condition 22. The purchaser failed to complete on the agreed date of January 25 1995 and the purchaser agreed to extend the period to February 3 1995. On February 1 the defendant sent a request under section 110(5) and claimed it was unable to complete until the request was complied with. The plaintiff claimed that the defendant was deemed to have accepted the vendor’s title pursuant to national condition 9(6). The defendant then applied for the registration of a caution. The plaintiff issued a summons seeking a declaration that the contract had been rescinded and the deposit forfeited and an order for vacation of registration of the caution. The judge made a declaration that the contract had been effectively rescinded and that the plaintiff was entitled to forfeit the deposit , and ordered that the caution registered be vacated. The defendant purchaser appealed contending that the words ‘a stipulation to the contrary’ did not allow national condition 9 to limit the time within which a request under section 110(5) could be made. Held The appeal was dismissed. A term that a request for completion under section 110(5) was to be made within a reasonable time before completion was not ‘any stipulation to the contrary’ within the subsection because it did not amount to a contractual term which was to the opposite effect but merely reduced the time within which the request could be made. Therefore national condition 9 was effective to limit the time within which the defendant could have requested the plaintiff to complete under 110(5). When the notice had originally expired on January 25 1995 the defendant was deemed to have accepted the plaintiff’s title and, since the defendant’s request had been of no effect, by virtue of national condition 22 the plaintiff had been entitled to rescind the contract and forfeit the deposit. John Norman (instructed by GH Gelberg & Co) appeared for the appellant/defendant; Gordon Nurse (instructed by Jay Benning & Peltz) appeared for the respondent/plaintiff.