Lyons v Thomas

• Jurisdiction: Ireland
• Judge: Mr. Justice Murphy
• Judgment Date: 01 January 1986
• Neutral Citation: 1986 WJSC-HC 1134
• Court: High Court
• Docket Number: [1984 No. 7959P/1985 No. 159 Sp.],No. 7959P/1984
• Date: 01 January 1986

1986 WJSC-HC 1134

THE HIGH COURT

No. 7959P/1984

LYONS v. THOMAS

BETWEEN:-

THOMAS LYONS

Plaintiff

and

ANNE THOMAS

Defendant

Citations:

BAINES V TWEDDLE 1959 CH 679

BANK OF IRELAND V WALDRON 1944 IR 303

BOWMAN & HYLAND 8 CH 588

CIVIL LIABILITY ACT 1961 S2

CLARKE V RAMUZ 1891 2 QBD 456

DEIGHTON & HARRIS'S CONTRACT, IN RE 1898 1 CH 458

DUDDELL & SIMPSON 2 CH APP 102

GENERAL CONDITIONS OF SALE 1978 GILS

GLENTON & SAUNDERS V HADEN 53 LT 434

GORDON HILL TRUST LTD V SEGALL 1941 2 AER 379

HOUSING ACT 1969 S4

JACKSON & HADEN'S CONTRACT, IN RE 1906 1 CH 412

JUDGMENT MORTGAGE (IRL) ACT 1850

MUNNELLY V CALCON LTD 1978 IR 387

SELKIRK V ROMAR 1963 1 WLR 1415

YOUNG & HARSTON'S CONTRACT, IN RE 31 CH 168

Synopsis:

SALE OF LAND

Contract

Rescission - Validity - Vendor's right - Implied exception - Purported exercise by vendor of his absolute express right to rescind - Exception where vendor in wilful default of material obligation under contract - Vendor's duty as trustee to preserve property until completion - Serious dilapidations occurring after execution of contract - Trespassers living in property - Fixtures and fittings removed - Purchaser insisting upon compensation for damage to property - Failure of vendor to preserve property - Express term of contract placing property at risk of purchaser unless damage occasioned by vendor's wilful default - Wilful equivalent to non-accidental - Held that vendor in wilful default under express term providing exception to purchaser's liability to assume risk - Held that implied term prevented vendor's right to rescind being exercised if vendor in wilful default under contract - Accordingly purported rescission by vendor not operative and purchaser entitled to specific performance with abatement of purchase price - General Conditions of Sale (Law Society - 1978 ed.), clauses 10, 26 - (1984/7959 P & 1985/159 Sp. - Murphy J. - 14/10/85) - [1986] IR 666

|Lyons v. Thomas|

WORDS AND PHRASES

"Wilful default"

Contract - Rescission - Vendor's rights - Implied exception - Vendor's duty to preserve property - Property at risk of purchaser unless damage occasioned by vendor's wilful default - ~See~ Sale of Land, contract - (1984/7959 P & 1985/159 Sp. - Murphy J. - 14/10/85) - [1986] IR 666

|Lyons v. Thomas|

TRUSTS

Trustee

Sale of land - Vendor - Duty to preserve property until completion - ~See~ Sale of Land, contract - (1984/7959 P & 1985/159 Sp. - Murphy J. - 14/10/85) - [1986] IR 666

|Lyons v. Thomas|

1 Judgment of Mr. Justice Murphy delivered the 14th day of October 1985

The Issues

2 The present case (and a vendor and purchaser Summons between the same parties l985/159Sp heard in conjunction with it) raises important questions with regard first, to the duty of a vendor with regard to the preservation of property pending the completion of a sale and secondly, the right of a vendor unilaterally to rescind a contract for sale.

The background

3 The premises known as "Camlinn" 62 Orwell Road, Rathgar, in the City of Dublin were built in the late 1920's pursuant to the building covenant in that behalf contained in an Indenture of Lease dated the 3rd day of August 1927 made between Walter Parkinson of the one part and Emily Harris of the other part.

4 The premises at Orwell Road aforesaid were owned by a Mrs. Farrell prior to her death in March 1982. She, together with one or more tenants or lodgers had occupied the premises for a number of years. It appears that Mrs. Farrell was an elderly widow and that no member of her family resided with her. There was evidence, which I accept, that Mrs. Farrell in her later years maintained a keen interest in the gardens adjoining the premises but did not have any comparable interest in keeping up or decorating the interior of the premises.

5 In May 1981 Mrs. Farrell became ill and went to reside with relatives in County Roscommon. She was subsequently transferred to a nursing home where she died in March 1982. She had not returned to the premises at Orwell Road subsequent to leaving them in May 1981.

6 Under her Will Mrs. Farrell bequeathed the premises to her daughter Anne Thomas the Defendant herein. Mrs. Thomas is married and has resided for some years with her husband and family in West Sussex, England. A decision was made by Mrs. Thomas to sell the house and accordingly she arranged to procure vacant possession from the tenant or lodger who was in occupation of one room therein. Some negotiations took place with a view to a sale with a Mr. Ryan who was known to the vendors family and had shown an interest in the house. It was Mr. Ryan who introduced Thomas Lyons (the Plaintiff herein) to Mrs. Thomas and eventually a contract was entered into in January 1983 under which Mrs. Thomas (to whom I shall refer as "the vendor") agreed with Mr. Lyons (to whom I shall refer as "the purchaser") for the sale to him of the Orwell Road premises for the sum of £56,500. The contract provided that the closing date should be the 18th day of February 1983 that the deposit should be a sum of £14,125 and that interest, where payable, should be at the rate of 24% per annum. Save as aforesaid the contract contained no special conditions and was comprised exclusively of the general conditions of sale (1978 edition) published by the Incorporated Law Society of Ireland.

7 These proceedings involve in particular a consideration of clauses 10 and 26 of the contract for sale. Those clauses which are respectively entitled "rescission" and "insurance" provide as follows:-

"10 If the purchaser shall make and insist on any objection or requisition as to title, the assurance to him or any other matter relating to or incidental to this sale, which the vendor shall be, on the ground of unreasonable delay or expense, or other reasonable ground, unable or unwilling to remove or comply with, the vendor shall be at liberty (notwithstanding any intermediate negotiation or litigation or attempts to remove or comply with the same) by giving to the purchaser or a solicitor not less than seven days notice in writing to rescind the sale. In that case, unless the objection or requisition in question shall be in the meantime have been withdrawn, the sale at the expiration of such notice shall be rescinded and the purchaser shall thereupon be entitled to a return of his deposit, but without interest, costs or compensation, on his returning to the vendor all documents and papers in his possession belonging to or furnished by the vendor relating to the sale, and procuring the cancellation discharge or release of any entry relating to the contract in the Land Registry or Registry of Deeds. The purchaser shall accept the sum so returned in full satisfaction of all claims, whether for interest, costs, damages or otherwise"

"26 The property shall as to any damage from whatever cause arising after the date the sale be at the sole risk of the purchaser and no claim shall be made against the vendor for any deterioration or damage unless occasioned by the vendors wilful neglect or default".

8 On the 25th of January 1983 the solicitors on behalf of the vendor forwarded to the solicitors on behalf of the purchaser one part of the contract for sale duly executed by the vendor. The solicitors on behalf of the purchaser then, with commendable dispatch, forwarded both his requisitions on title in duplicate and the draft assignment on the the 31st of January 1983 to the solicitors for the vendor. As no replies were received to the requisitions and the time for completion of the sale had been permitted to pass the solicitors on behalf of the purchaser wrote a reminder to the solicitors on behalf of the vendor on the 11th of April 1983. The reply to that communication though dated the 29th of August 1983 was not dispatched to or received by the vendor until the 5th of October 1983. The reply apparently included replies to the requisitions on title.

9 Apart from any question of delay involved on the part of the vendor the first indication of the problems which were the subject matter of these proceedings is contained in a letter from the solicitor on behalf of the purchaser to the solicitor on behalf of the vendor dated the 13th of October 1983. In that letter the purchasers solicitors stated that the property for sale had been "considerably vandalised and has also fallen into disrepair" and asked the vendor to accept that she was responsible for the maintenance of the property pending the completion of the sale. The vendor was also requested to indicate the reduction in the purchase consideration which she would grant having regard to the deterioration. Later in the same month the solicitors on behalf of the purchaser raised certain rejoinders on title which are of no relevance to these proceedings but in a subsequent letter repeated the complaint that the premises were deteriorating. It was stated that a pipe had appeared to burst in the premises and had been flowing for some time. In addition the vendor was put on notice that the property had been used by squatters. Finally - in this connection - the vendor was notified that fire insurance cover was no longer available to the purchaser as the property was vacant. Little appears to have happended in relation to the matter between November 1983 and May 1984. In the month of May 1984 a change occurred - as was explained in evidence - in the personnel dealing with the transaction in the firm of solicitors acting on behalf of the vendor. This change is apparent from reading the book of correspondence between the solicitors concerned. On behalf of the vendor there is a firm denial of any liability for deterioration or damage; there is a complaint that the purchaser failed to pay the agreed deposit; an accusation of delay on the part of the purchaser and a notice by the vendor fixing the 31st of August 1984 as the date for completion and making time of the...