Re The Postmaster-General and Colgan's Contract

• Jurisdiction: Ireland
• Judge: Barton, J.
• Judgment Date: 03 May 1906
• Court: Chancery Division (Ireland)
• Docket Number: (1905. No. 1123.)
• Date: 03 May 1906

In re the Postmaster-General and Colgan's Contract.

Barton, J.

(1905. No. 1123.)

CASES

DETERMINED BY

THE CHANCERY DIVISION

OF

THE HIGH COURT OF JUSTICE IN IRELAND

AND BY

THE IRISH LAND COMMISSION,

AND ON APPEAL THEREFROM IN

THE COURT OF APPEAL.

1906.

Vendor and purchaser — Contract for sale of freehold premises — Vacant possession — Non-completion on appointed day — Interest on purchase-money — “Wilful default” of vendors.

Held, that, in assuming the tenancy to be quarterly, and in fixing the date for completion on that assumption, the vendors had been guilty of wilful default, and that therefore they were not entitled to be paid interest on the purchase-money.

Summons.

Application by the vendors, under the Vendor and Purchaser Act, 1874, for an order that, under the provisions of the contract for sale, they were entitled to be paid by the purchaser interest at the rate of £5 per cent. per annum, from 1st August, 1904, to 29th June, 1905, on the sum of £11,500, being the purchase-money of the premises the subject-matter of the contract. The contract, which was dated 27th January, 1904, was for the sale of certain parcels of freehold land in the city of Belfast, and was made between His Majesty's Postmaster-General, the purchaser, of the one part, and Eliza Colgan and others, the vendors, of the other part. The contract provided that the purchaser should, on completion of the purchase, be given clear possession of the premises as from the 1st day of August, 1904, up to which date all rates, taxes, and outgoings were to be paid by the vendors, and, if necessary, the rents, profits, and outgoings were to be apportioned. Paragraph 2 of the contract, on which the question at issue between the parties arose, was as follows:—

“The purchaser shall pay the said purchase-money to the vendors, or, as they shall direct, on the 1st day of August (1904) next, at the office of the solicitor to the Post Office, Sackville-street, Dublin, at which time and place the purchase shall be completed. If, from any cause whatsoever other than the wilful default of the vendors, the purchase shall not be completed on or before the 1st day of August (1904) next, the purchaser shall pay to the vendors interest on the purchase-money at the rate of five pounds per cent. per annum from that day until the completion of the purchase.”

In an affidavit of Mr. Louis A. Meenan, solicitor for the vendors, in support of the application, he stated that the agreement was signed on behalf of the purchaser on the 10th December, 1903; but before being signed by those of the vendors who were resident in this country, it had to be sent to Australia for signature there, and he considered it necessary to obtain that signature before serving notices to quit upon the tenants. The Australian signature was obtained on 27th January, 1904, and he was informed of this by cablegram received on 6th February, 1904. There were thirty-nine tenants in occupation of the premises, a number of whom were weekly tenants. All the others paid their rents quarterly, and were believed to be quarterly tenants. When the cablegram was received, it was too late to serve notices to determine the quarterly tenancies on 1st May, 1904, and notices were served to determine the tenancies on 1st August, 1904, on which date the entire premises were vacated with the exception of No. 13, Smith-field, held by Mrs. Elizabeth Crothers, a licensed publican. The tenancy of Mrs. Crothers appeared to have been created in May, 1871, by the then agent, Mr. M'Auliffe. The present agent, Mr. William M'Cormick, who had previously been principal clerk of Mr. M'Auliffe, was appointed agent about the end of 1871, but he had no recollection of the terms of the letting, and there was no entry in the books as to the terms of the letting. The rent had always been paid quarterly. Mrs. Crothers refused to give up possession on 1st August, 1904, but at that time she raised no question as to the sufficiency of the notice to quit. Ejectment proceedings were commenced in the Belfast Recorder's Court, and when the case came on for hearing, on 30th September, 1904, it was contended on behalf of Mrs. Crothers that the letting was not quarterly. The case was adjourned, and on 21st November the Recorder of Belfast decided that the letting was a yearly one, and that consequently the notice to quit was insufficient. In the meantime a new notice to quit was served on the 28th October, 1904, for the determination of the tenancy on 1st May, 1905. On 2nd May, 1905, a writ of summons claiming possession of the premises was issued. On or about the 14th June, 1905, when the action was ripe for trial, the defendant, Mrs. Crothers, signed a consent for judgment for possession, and on 20th June, 1905, possession was given over to the vendors. On 29th June possession was handed over to the purchaser, and on the same date the purchase-money was paid. In his affidavit, Mr. Meenan also stated that the vendors had no means of ascertaining exactly the nature of the tenancy of Mrs. Crothers; that they believed it was a quarterly one; that nothing had occurred to lead them to think that the interest of Mrs. Crothers was greater than that of any other of the tenants; and that they had entered into the contract in the belief that the tenancy was quarterly. In a second affidavit, Mr. Meenan made an exhibit of the rental of the property from 1st May to 1st November, 1897, in which Mrs. Crothers' annual rent was returned as payable quarterly. Mr. William M'Cormick, agent for the property, stated in an affidavit that before the contract was entered into he was applied to by the vendors for particulars of the tenancies, and that he had informed them that in his opinion Mrs. Crothers' tenancy was quarterly. Mr. E. R. Bate, solicitor, made an affidavit on behalf of the purchaser, in which he stated that for some time previous to October, 1893, correspondence had been going on between the vendors and the purchaser, and on 20th November, 1903, he, on behalf of the purchaser, asked Mr. Meenan if the premises were in hand, and if the vendors were in a position to give over vacant possession when they came to close. Again, on the 23rd November, he asked if the vendors would agree to 1st August, 1904, as the day for closing the transaction, and if they would be in a position to give vacant possession on that date. On 24th November, 1903, Mr. Meenan wrote that he had advised the trustees to accept the 1st August, as the date for completion. He added:— “With regard to giving you vacant possession, I cannot agree to this…. Some of the tenancies are yearly, but the bulk of them are six months, quarterly, and weekly tenancies. Whenever the contract of sale is signed, under your instructions, I shall notice the tenants, and do all I can to have them vacant when the purchase is closed.” In his reply, dated 25th November, 1903, Mr. Bate wrote:— “I doubt if the Post Office authorities will agree to 1st August, 1904, as an absolute date for closing. Can you name a date on which you will be able to give vacant possession? What is the date on which the yearly tenancy, with the latest date of commencement, can be terminated?” On 27th November Mr. Meenan wrote:— “I cannot just at present name a date to give you vacant possession.” On 28th November, Mr. Bate wrote:— “I await your further communication as to the date on which you expect to be able to give vacant possession.” On 4th December, 1903, Mr. Meenan wrote:— “With regard to giving you vacant possession, I think we shall be able to do so on completion,” and on 8th December, 1903, he wrote that he had inserted “1st August, 1904,” in the agreement. On 11th December, 1903, Mr. Bate wrote:— “As the agreement has been signed by the purchaser, you will, no doubt, forthwith...