Tyndarius v O'Mahony and Others

• Jurisdiction: Ireland
• Judge: MR. JUSTICE T.C. SMYTH
• Judgment Date: 25 June 2002
• Neutral Citation: [2002] IEHC 167
• Docket Number: Record No.546SP/2000,Record No. 2000/5465P
• Court: High Court
• Date: 25 June 2002

IN THE MATTER OF SECTION 9 OF THE VENDOR AND PURCHASER ACT

BETWEEN/

TYNDARIUS LTD

Plaintiff

and

JANES G. O’MAHONY,MICHAEL McSWEENEY AND NICHOLLS LTD

Defendants

Record No. 2000/5465P

HIGH COURT

Abstract:

Contract - Property - Conveyancing - Solicitors - Practice and procedure - Time limits - Failure to furnish title deeds - Service of completion notice - Whether purchaser entitled to rescind contract.

The plaintiff had entered into a contract with the defendants for the purchase of a premises. The plaintiff in the course of the negotiations indicated dissatisfaction with the details of title furnished. The vendors served a completion notice on the plaintiff calling on the plaintiff to complete the sale within 28 days. The plaintiff refused to complete the contract and sought the return of the deposit paid together with interest and costs. The defendants replied that previously missing deeds had been located. The defendants asserted that the vendor was at all times ready, willing and able to assert title in accordance with the contract.

Held by Mr. Justice Smyth in finding in favour of the plaintiff. A party serving a completion notice must be ready to fulfil their own outstanding obligations under the contract. There were too many inconsistencies in the documents proffered by the defendants to obligate a purchaser to accept the title. The plaintiff was entitled to terminate the contract because of the failure by the defendants to make good title and also their inability to complete the contract. The right to rescind the contract was exercised promptly. At the date of the service of the completion notice the vendors were not ready, willing and able to comply with their obligations. The purchaser unequivocally exercised the right of election to rescind. The plaintiff was entitled to recover the deposit together with interest.

DELIVERED ON FRIDAY, 11th JANUARY 2002

1 JUDGEMENT OF MR. T.C. SMYTH DELIVERED ON FRIDAY, 11th JANUARY 2002

2 The Plaintiff entered into a written contract to purchase 51/52 Thomas Street, Dublin 8, under the terms of a written Tender document incorporating the Law Society’s“General Conditions of Sale”(1995 edition). The sale price was IR£1,2ll,200, and the deposit paid to the solicitors to the vendors as stakeholders, totalled IR£12l,000. After some dispute as to whether the initial contract did or did not disclose the identity of the vendors, the subsequent correspondence in any event indicated that the first two Defendants, being solicitors acting on behalf of the vendors, were acting or selling “as trustees ‘‘ . A statutory declaration of the first-named Defendant, dated 23rd March 2000, suggested that the third-named Defendant might be a principal along with the first and second Defendants.

3 The Title offered to the property was a freehold title together with the benefit of a Lessees interest in Number 51 Thomas Street under lease dated 28th October 1985, between George Frederick Thompson and Ors to Nicholls (Thomas Street) Ltd. Other documentation did not disclose that the first-named Defendant had lost the deeds by which the vendors claimed to hold the property. These

4 deeds were not stamped and according to the first-named Defendant, Statutory Declaration of 23rd March 2000, they were being held to the order of the Ulster Bank Ltd. on foot of a solicitor’s undertaking. I think it may be reasonably assumed that the bank lent money on the security of these deeds and had an entitlement to have them. Not central the matters in issue in this case, it appears to me reasonable to assume that at the time of the contract the Defendants, and in particular the first Defendant, could not have been but aware that the deeds were not stamped and that the first-named Defendant knew or ought to have known that the relevant deed(s) were missing. There is a dispute concerning this latter matter in that deeds appear to have been mislaid rather than lost.

5 The intermediate title to the property was not furnished in accordance with General Condition 7; in response to the objections and requisitions on title sent under cover of a letter of 18th October 1999, and replied to by the vendor on 3rd March 2000, the reply to the requisition and the capacity of the vendor to sell the property was stated to be“to follow”.The fact that the deed was missing was not advised to the solicitors to the Plaintiff until apparently in or around 20th March 2000.

On or about 22nd March 2000, an extract from a

6 contract dated 8th February 1994, whereby Mavis O’Toole and Eamonn O’Brien agreed to sell 51/52 Thomas Street to the first and second Defendants for IR£250,000, was furnished, together with two draft statutory declarations. No copy of the missing deed was furnished and no mention was made of the fact that there was an assignment to Lornall Ltd. by Nicholls (Thomas Street) Ltd. of the leasehold interest to number 51 Thomas Street.

7 A dispute arose as to how much effort was made at that or at any other stage to obtain a copy of the “lost deed” or adequately vouch by statutory declaration its execution, terms or effect. The statutory declarations furnished did not deal with the stamping of the document nor was an arrangement made to have any copy of the deeds stamped with unpaid duty or particulars delivered stamp impressed. A statutory declaration of a Mavis O’Toole of 30th March 2000 was, so far as the Plaintiff was concerned, from a purchaser’s point of view, inadequate and inaccurate. This did not deal with the separate assignment of the leasehold interest to Lornall Ltd. Matters took a more focused shape in or about 31st March 2000, when the solicitors for the Plaintiff indicated that the Plaintiff was considering putting an end to the contract. This letter was apparently written without prejudice but was referred to freely during

8 the course of the hearing. The Plaintiff’s solicitors expressed themselves in this way:

“You might advise as to what your

clients’ proposals are in respect of

our clients’ losses and damages

incurred up to this date in respect of

this property, together with estate

agency fees and legal fees incurred

in the event that our client wishes to

bring this call of contract to an end.”

9 The protracted correspondence in which the Defendants as vendor apparently had really failed to address or otherwise provide satisfactory answers to the problems were clearly exercising the mind of the Plaintiff in terms of obtaining a good title. The response of the vendor was quite unequivocal and by a notice dated 4th April 2000, the vendor called upon the Plaintiff to complete the sale within 28 days. The notice invoked the terms of the provisions of a contract for sale. Typically, the Completion Notice stated that:

“(2) The vendors are ready, willing

and able to complete the sale of all

that and those, the hereditaments

and premises known as 51 and 52

Thomas Street in the City of Dublin,

both in respect of the freehold interest

and the leasehold interest referred to

in the Contract for Sale.”

10 The intended effect of the notice was to make time of the essence of the contract. The response to this notice was set out in a letter of 17th April 2000, it rejected the purported Completion Notice and asserted that it was invalid on a number of grounds which are enumerated in the course of a long

11 and detailed letter. It expressly stated at paragraph (d)

12 “Our client shall continue to reserve its right to rescind the Contract for Sale due to your clients’ failure to satisfy our client in this regard.”

13 The regard in which it was referred to was in respect of the adjoinment of a certain fire escape at the rear of the premises.

14 The letter concludes in this way:

“Please further note that our client

has instructed us to issue such proceedings

as are necessary to protect its rights on foot

of the contract entered between our clients

and furthermore any attempts by your client

to forfeit our clients’ deposit will be counteracted

by such appropriate injunctive proceedings

against your client and we further put you

on notice that we hold and continue to

hold your clients responsible for all such

losses, damages, costs and expenses incurred

15 by our client as a result of or arising from the

various issues raised above.”

16 The letter was followed up two days later by a further letter of 19th April, in which the purchasers sought once again the proposals of the vendor for “resolving the various issues as set out in our correspondence”. There followed a series of letters in which proposals were shuttled to and forth with a view to resolving the impasse that had arisen. No resolution was arrived at and by letter dated 25th April 2000, the vendor’s solicitors wrote to say:

17 “As far as we are concerned, we have adduced little [sic] in accordance with the contract and are ready, willing and able to complete. We have already served a Completion Notice herein which is due to expire on Tuesday next, 2nd May, and interest continues to accrue against your client in the sum of £3,461.53 per week. Upon expiration of the Completion Notice, it is our client’s intention to lease the property from month to month as they are entitled to the rents and profits from the property in addition to the interest claim against your client per condition 25(a) (2) of the Agreement for Sale herein.”

18 Whatever may have been the status of the correspondence or the meetings that were taking place at this time, a letter was written on 26th April 2000, by the purchaser’s solicitor, which (inter alia) stated:—

19 “We further note that at our meeting you confirmed that you have no intention of forfeiting our clients’ deposit and that the purpose of the Completion Notice served by your client, dated 4th April 2000, the validity of which we dispute, was solely for the purpose...