Contract of sale of land incorporating Law Society’s conditions, including condition permitting service of notice to complete–Presence of this condition does not exclude normal contractual obligation to complete–Vendor entitled to specific performance merely on neglect by purchaser to complete on day fixed for completion or within a reasonable time thereafter–Four months ‘at least prima facie substantially more than a reasonable time’ in a case where a 28-day notice could have been served
This was an
order 86 summons by Francis Jack Woods, Esther Helena Tatford Woods and Mildred
Oliver Woods, owners of freehold properties in West Street, Osborn Road and
Malt House Lane, Fareham, Hampshire, against Mackenzie Hill Ltd, for specific
performance of a contract dated July 6 1973 by which the defendants agreed to
purchase those properties.
Miss H
Williamson (instructed by Kingsford, Dorman & Co, agents for Blake,
Lapthorn, Rea & Williams, of Fareham) appeared for the plaintiffs, and Mr W
Blum (instructed by Slowes) represented the defendants.
Giving
judgment, MEGARRY J said: This is a vendor’s summons under order 86 for
specific performance of a contract dated July 6 1973 for the sale of land and
buildings at Fareham, Hampshire. There is no dispute on the facts, most of
which are admitted on the pleadings, but a far-reaching submission has been
made on the law. The contract incorporated the Law Society’s General Conditions
of Sale (1973 Revision) and provided for completion on September 30 1974. A
special condition in the contract provided for completion on the last days of
May, June, July or August 1974 if the vendors gave the purchasers a 28-day
prior notice, but this condition never took effect, and September 30 remained
the contractual completion date. On that date the purchasers, a limited
company, did not complete, and the vendors on the same day served on the
purchasers a 28-day completion notice under condition 19 of the Law Society’s
conditions. It is common ground that this notice was invalid, if only because it
purported to be given by only two out of the three vendors. The purchasers
continued not to complete, and on November 8 1974 the vendors issued a
specially-endorsed writ against the purchasers claiming specific performance
and alternatively damages. On December 13 the summons under order 86 was
issued, whereby the vendors claimed specific performance or alternatively
directions as to pleadings. It is that summons that is now before me, and on
behalf of the vendors Miss Williamson submitted that it was a clear case in
which specific performance should be decreed.
On behalf of
the purchasers, Mr Blum conceded that the case was one in which the court could
make the declaratory part of an order for specific performance, although he
said that the case was one in which the court ought not even to do that, since
it was unusual to do so on an application for summary judgment, and the court
would never make a declaration on a matter which was not an issue between the
parties. But his main submission was that where, as in this case, a contract
provides for the service of a notice making time of the essence of the
contract, there is no obligation to complete on the date fixed for completion
or within a reasonable time thereafter, since the provision for a completion notice
overrides any such obligation. Even if years go by without completion, the
purchaser will never be in breach of contract unless and until a completion
notice has been served and expired. If, say, 10 years went by in inactivity,
possibly the contract would be treated as having been rescinded by mutual
agreement: but subject to that, and to any possible effect of the Limitation
Act 1939, nothing save a completion notice would suffice. Mr Blum accepted that
such a notice could have been served at any time, and could be served now, and
that if it were served the purchasers would be bound to complete in accordance
with it: but no valid notice had in fact been served. In any case, he said,
there was no evidence before the court as to a reasonable time having elapsed
since the contractual completion date. On the authority of Hasham v Zenab
[1960] AC 316, Mr Blum accepted that no breach of contract need be established
in order to found a decree of specific performance, but he said that it would
be wrong to include in any order any of the directions as to computing the sum
to be paid on completion, or delivering a conveyance and the title deeds
against payment of the proper sum on completion. Nothing more than, at most,
the declaratory words stating that the contract should be specifically
performed and carried into execution should be included in the order. Mr Blum
expressly disclaimed, I may say, any contention that the writ had been issued
prematurely.
That was the
argument; and I have no hesitation in rejecting it. I do not for one moment
think that the inclusion of express provisions for completion notices, as now
contained in both the Law Society’s conditions and the National Conditions of
Sale, has the effect of excluding the contractual obligation to complete on the
date fixed for completion, or within a reasonable time thereafter. In my
judgment, such provisions add to the remedies available against a defaulting
party without driving out the existing remedies, or altering the existing
structure. I can see nothing in condition 19 of the Law Society’s conditions
which is in any way inconsistent with the contractual obligation to complete on
the day fixed by the contract for completion, or within a reasonable time
thereafter. Condition 19 avoids the uncertainty as to what is a reasonable
time, and confers and spells out specific rights against the defaulting party;
but there is no trace of any intention to exclude the rights and remedies
otherwise existing at law and in equity if no such notice is relied upon. I
wholly reject any notion that the contractual completion date has lost its
potency and that the service of a completion notice is now a prerequisite to
the enforcement of any contract which contains provisions enabling such notice
to be served. In this case, as I have mentioned, the contractual date for
completion was September 30, nearly 15 months after the date of the contract,
with provisions (which the vendors did not operate) which would allow the
vendors to substitute completion dates up to four months earlier. Condition 19
of the Law Society’s conditions provides for a 28-day completion notice, a
provision which two of the vendors tried without success to operate. The case
now comes before me well over four months after the contractual completion date
has passed, and Mr Blum contends not only that a reasonable time has not in
fact elapsed but also that there is no evidence before me to show that it has.
He concedes, as he must, that at any time during the four months the vendors
could have served a completion notice which, by the terms of the contract by
which the purchaser has bound itself, would have bound the purchaser to
complete within 28 days. Having regard to the time scale that the parties have
chosen, the period of over four months seems to me at least prima facie
to be substantially more than a reasonable time for completion, and I should
require cogent evidence before I would reach a contrary conclusion. The
purchasers have adduced no evidence whatever on the point, and indeed there is
nothing before me to indicate that the purchasers were even going to raise the
point. I think it plain that a reasonable time has elapsed.
In the result,
therefore, this seems to me to be a case in which there is nothing that can be
called an arguable defence to the plaintiffs’ claim to a full decree of
specific performance. Furthermore, I can see no issue or question in dispute
that ought to be tried, or any other reason why there ought to be a trial of
the action: I speak, of course, in the language or order 86, rule 4. In my
judgment, the contract ought to be performed, and the appropriate consequential
directions as to performance ought to be given; and I so order.
