Jackson v Stokes

• Jurisdiction: Ireland
• Judge: Mr. Justice McCarthy
• Judgment Date: 25 July 2008
• Neutral Citation: [2008] IEHC 276
• Docket Number: [No. 1174 S/2007]
• Court: High Court
• Date: 25 July 2008

[2008] IEHC 276

THE HIGH COURT

[No. 1174 S/2007]

Jackson v Stokes

BETWEEN

HARRY PETER JACKSON AND MARY PATRICIA JACKSON

PLAINTIFFS

AND

JEFF STOKES

DEFENDANT

LAW SOCIETY GENERAL CONDITIONS OF SALE 2001

LAW SOCIETY GENERAL CONDITIONS OF SALE 2001 CLAUSE 40

LAW SOCIETY GENERAL CONDITIONS OF SALE 2001 CLAUSE 40(a)

LAW SOCIETY GENERAL CONDITIONS OF SALE 2001 CLAUSE 40(b)

DUBLIN LAUNDRY COMPANY LTD (IN LIQUIDATION) v MALACHY CLARKE 1989 ILRM 29

FAMILY HOME PROTECTION ACT 1976

FAMILY HOME PROTECTION ACT 1976 S3

QUADRANGLE DEVELOPMENT & CONSTRUCTION CO LTD v JENNER 1974 1 WLR 68

CHANCERY DIVISION IN RE POSTMASTER-GENERAL & COLGAN'S CONTRACT 1906 1 IR 287

AIB v FINNEGAN UNREP SUPREME BLAYNEY 16.2.1996 1996/1/16

TYNDARIUS LTD v O'MAHONY MCSWEENEY & NICHOLLS LTD UNREP HIGH SMYTH 11.1.2002 2002/27/7042

PATEL & ANOR v DAYBELLS (A FIRM) 2001 ALL ER 398

DOMB & ANOR v ISOZ 1980 1 ALL ER 942

GLENKERRIN HOMES v D ÚN LAOGHAIRE-RATHDOWN COUNTY COUNCIL UNREP HIGH CLARKE 26.4.2007 2007/26/5308

CONTRACT

Sale of land

Interest - Summary summons - Agreed closing date - General conditions for sale - Completion notice served prior to time agreed for closure - Whether vendors able, willing and ready to close - Encumbrances on title to lands - Conveyancing practice - Entitlement to good marketable title - Undertakings to discharge encumbrances - Whether separate free standing prior consent by plaintiff wife - Whether execution of contract constituted consent to ultimate grant - Whether obligation to accept undertakings in substitution for strict rights - Whether legitimate expectation that undertaking would be accepted - Dublin Laundry Corporation Ltd v Malachy Clarke [1998] ILRM 29, Quadrangle Development and Construction Co Ltd v Genor [1974] 1 WLR 68, Re The Post-Master General and Colgan's Contract [1906] 1 IR 287, Allied Irish Banks v Finnegan (Unrep, SC, 16/2/1996), Tyndarius Ltd v O'Malley (Unrep, Smyth J, 11/1/2002), Patel v Daybells [2001] All ER 398, Domb v Isoz [1980] 1 All ER 942 and Glenkerrin Homes v Dun Laoghaire Rathdown Co Co [2007] IEHC 298 (Unrep, Clarke J, 26/4/2007) considered - Family Home Protection Act 1976 (No 27), s 3 - Action dismissed (2007/1174S - McCarthy J - 25/7/2008) [2008] IEHC 276

Jackson v Stokes

Judgment of

Mr. Justice McCarthy

1 delivered the 25th day of July, 2008.

2 1. This action was commenced by originating Summary Summons of the 9^thJuly, 2007. By it the plaintiffs seek to recover the sum of €38, 465.96 together with interest pursuant to statute. It is alleged that sum is money due for interest accrued on foot of a contract for sale made between the parties and in particular so due because the closing date in respect of such contract was the 2^nd April, 2007 whereas closing occurred on the 24^th May, 2007, interest being payable thereunder at a daily rate of €739.73 from such agreed date. Ultimately, when the matter came before the Master on a motion for summary judgment dated 5^th November, 2007 it was put into the Judges List for hearing. The defendant sought to have the matter remitted for plenary hearing. In as much as it was agreed between the parties that no evidence beyond that which appeared on the affidavits sworn for the purpose of the motion was relevant and the matter could be disposed of on that evidence the hearing was, by consent, treated as the trial (on affidavit).

3 2. I think that the first issue which arises is to determine the agreed closing date. This was the 29^th October, 2006 but it is not in dispute that this was initially changed to the 2^nd April, 2007, on perusal of Mr. Jackson's affidavit and that of Mr. Stokes. It would appear from a letter sent by Messrs. Denis McSweeney (solicitors for the defendant purchaser) on the 9^th October, 2006 that this change was agreed consequent upon a letter of 6^th October, 2006 from Messrs. Collins on behalf of the plaintiffs. In his replying affidavit sworn on the 15^th January, 2008, Mr. Stokes, at para. 5 therein, says that his solicitors requested a changed closing date of the 16^th April, 2007; it is not clear whether or not it is suggested that this change was sought in writing but, in any event, there is nothing before me to indicate that it was. However, Mr. Stokes contends that a letter of 21^st March from Messrs. Collins is to be read as confirming his assertion in as much as it refers to the closing "which is due to take place on 16^thApril next". In a later letter, of 26^th March 2006, to Messrs. McSweeney from Messrs. Collins reference is made to "your conversation with David Ensor of our offices suggesting a closing date of 16^th April next". Further, by that letter certain difficulties on the part of the plaintiffs in the event that the closing date was as late as the 16^th April were mooted and it was stated "we would appreciate if you could get your clients instructions in this matter and facilitate our clients by completing on the morning of the 11^th April": thus a further change was sought but there is no suggestion it was agreed.

4 3. It is accordingly clear that the closing date was the 16^th April, 2007.

5 4. The contract was, to put the matter shortly, in accordance with the general conditions of sale published by the Law Society with, as is usual, of course, certain special conditions. Such general conditions at Clause 40 contemplate what are commonly known as "completion notices" and Clause 40(a) is to the effect that:-

"If the sale be not completed on or before the closing date, either party may on or after that date (unless the sale shall first have been rescinded or become void) give to the other party notice to complete the sale in accordance with this condition, but such notice shall be effective only if the party giving it shall then either be able, ready and willing to complete the sale or is not so able ready or willing by reason of the default or misconduct of the party."

"Upon service of such notice the party upon whom it shall have been served shall complete the sale within a period of 28 days after the date of such service… and in respect of such period time shall be of the essence of the contract without prejudice to any intermediate right of rescission by either party."

And Clause 40(b)

6 5. It seems clear in the present case that there was no obligation on the part of the defendant purchaser to close the sale before the 16^th April, 2007 and, of course, time was not of the essence in respect of that date. The notice was accordingly served prior to the time agreed for closure and demanded closure 28 days thereafter i.e. 28 days from the 3^rd April 2007, (excluding the day of service). Prima facie, accordingly, there was no breach of contract on the part of the defendant purchaser merely because the sale was not closed until 25^th May following if that date was within "reasonable time" of the 16^th April. The notice was bad and is accordingly not relevant.

7 6. Interest is payable from the original or any subsequently agreed closing date, whether or not time is of the essence in respect of such date. Interest is not, of course, payable if closing does not take place on the ultimately agreed date because of the vendor if the purchaser is not himself in default or incapacity to close is not the due purchasers default. The benefit, of course, of a vendors completion notice in the event that a closing date has passed without closure and without default by the vendor is that finality is brought into the date for closing thereby disposing of any difficulties pertaining to any issue of closure only within a reasonable time of the agreed closing date (e.g. difficulties as to whether or not there is a breach giving rise to the remedies which flow therefrom, including forfeiture of a deposit and a claim for damages or for specific performance) but the vendor here does not have the benefit of such notice.

8 7. In any event, even if there was no obligation to complete the contract on a date agreed where time is not of the essence (i.e. here on 16^th April, 2007) one of the consequences which that entails is a liability for interest subject to the qualifications referred to above and as I have said. It seems to me that it must be axiomatic that a party could not be liable for interest if a contract is not closed unless the vendor is able, ready and willing to so close on the date agreed. In this case it is contended on the part of the purchaser that the vendors, through no fault of his, were not so able, ready and willing to close on 16^th April or prior thereto. I think whether or not such party was in a position to close is evidenced by the fact that, ultimately, on the 24^th May, they were not in position t do so, and, in any event, at no time prior thereto.

9 8. In particular, it is...