Re, Flynn and Newman's Contract

• Jurisdiction: Ireland
• Judgment Date: 01 January 1948
• Date: 01 January 1948
• Court: High Court

In re Flynn and Newman's Contract

In the Matter of FLYNN AND NEWMAN'S CONTRACT and in the matter of the Vendor and Purchaser Act

1874.

Vendor and purchaser - Sale of leasehold premises - Lessee bound to repair - Premises in defective state of repair - Breach of covenant to repair not disclosed on title - Notice from lessor requiring lessee to repair - Not disclosed - No right of forfeiture or re-entry available to lessor - Purchaser"deemed to have purchased with full knowledge of state of repair" - Purchaser acquainted with terms of lease - No inspection of premises by purchaser - No defect in title - No obligation on vendor to disclose defective state of repair or notice from lessor.

The vendor offered for sale the leasehold interest in a number of houses which were in the occupation of sub-tenants. Prior to the signing of the contract for sale with the purchaser, the vendor had received notice from the superior landlord, requiring considerable repairs to be effected and threatening legal proceedings in default of compliance; but, through an oversight, the notice had not been adverted to, either in the preparation of the conditions of sale or in the replies to the requisitions. Later, and before completion, the notice was brought to the attention of the purchaser.

The lease under which the vendor held, contained a covenant by the lessee to keep the premises in repair, but contained no provision for re-entry or forfeiture on breach of this covenant. Under the conditions of sale, the purchaser was bound to accept the last receipt for rent as conclusive evidence of compliance with covenants or waiver of any breach thereof, and further, was deemed to have purchased with full knowledge of the state of repair of the premises. The terms of the lease had been made known to the purchaser before signing the contract, but he did not make a close inspection of the premises, although he might have done so, if he had so wished.

Held, that the mere state of disrepair which might involve an action for breach of covenant, but which, in the absence of a proviso for re-entry, could not be a ground of forfeiture, was not a defect in title but a defect in subject-matter. In the circumstances, the vendor was not under any legal obligation to disclose the defective state of repair of the premises or the notice from the landlord.

Summary Summons on behalf of John Flynn, the purchaser, claiming a declaration that the vendor had failed to make a good title to the premises comprised in the contract for sale in accordance with the particulars and conditions of sale, and a return of the deposit.

The facts have been summarised in the head-note and are set out fully in the judgment of Kingsmill Moore J. post.

Kingsmill Moore J. :—

By a lease of the 23rd of May, 1867, John Edward Venables Vernon demised to George Tickell, for a term of 150 years and subject to a rent of £40, a piece of ground in Clontarf. The lessee covenanted to expend the sum of £3,000 in building a terrace of substantial dwelling-houses, and to keep them in good and substantial repair, and to yield them up in such repair at the expiration or sooner determination of the term but, either intentionally or by an oversight, there was no proviso for re-entry on breach of the covenant to repair,

although there was a proviso for re-entry on the breach of other covenants. It is the absence of any provision, whereby the lease might become forfeitable by reason of the non-repair of the premises, which is the crucial and decisive element in this case.

The covenant to expend the £3,000 was complied with by the erection of some eleven houses and two small stores, and, in course of time, the lessee's interest devolved on a person of unsound mind who came under the control of the Court. An order for sale of the premises was made, conditions of sale settled by Court counsel and, on the 24th day of October, 1946, the premises were sold to Philip Newman, the present vendor and the defendant in this summons. A few days afterwards the sale was confirmed.

Number 18 of the Court conditions of sale reads as follows:

"18. Notwithstanding anything contained in the lease the receipt for the last rent accrued due previously to the date fixed for the completion of the purchase in respect of the property shall be accepted as conclusive evidence of the performance and observance of all the covenants and conditions in the lease under which the same is held and of the payment of all rent accrued due under and the performance and observance of all the covenants and conditions contained in the lease or of the effectual waiver of any breach (whether continuing or not) of any covenant or condition up to the actual completion of the purchase without proof being required of the title or authority of the person giving such receipts."

On the 19th October, four days before the date of the sale, Messrs Franks & Oulton, solicitors for the Vernon estate in which was vested the landlord's interest in the premises, wrote a letter to Messrs J. W. Lane & Co. who had carriage of the sale, notifying them that "there have been serious breaches of the repairing covenant contained in the said lease and that unless steps are taken forthwith to remedy the same, Mr. E. K. Vernon, the present owner of the estate, will find it necessary to institute proceedings to enforce compliance with same." An extract from a report of Mr. Stafford, the estate engineer, as to the condition of the houses then followed and the letter concluded:—"You are to treat this letter as a preliminary to formal notice being served with a detailed list of the dilapidations that have been allowed to take place. In the case of two of the houses, Mr. Stafford has, so far, been unable to gain admission. To ensure that position of affairs is brought to the notice of possible purchasers of the premises, we are sending a copy of this letter to Messrs Battersby & Co."

A letter was also written to Messrs. Battersby & Co., the auctioneers, enclosing a copy of the letter to Messrs. Lane and containing the paragraph, "You will observe . . . that the Vernon estate will be putting forward a claim in respect of the dilapidations that have been allowed to occur, and any possible purchaser should be informed of this."

The legal effect of those two letters on the respective rights of landlord and tenant in the premises would appear to be nil. There was no proviso for re-entry on breach of the covenant to repair and therefore the letter to the solicitors, even if it had been so framed as to constitute a good notice under s. 14 of the...