Bidaisee v Dorinsa Yusidai Sampath and Others: PC 1993

(Trinidad and Tobago) The parties contracted for the sale of a half share of land to the co-owner for TT$2 million. A 10% deposit was paid. A notice to complete was not met. The vendor sold the share to others for more. Arguments as to the validity of the notice were not upheld. One ground of appeal was refusal to return the deposit under the equivalent of section 49(2).
Held: The refusal was upheld. Lord Nicholls noted that the gain represented by the retention of the deposit was offset by the amount of interest he would have received if the sale had been completed on time, and: ‘Even so, and having regard to the price of the resale to (the third party) he did not suffer a loss. This, of itself and without more, is not a sufficient reason for the court to exercise its discretion in favour of a defaulting buyer. The traditional deposit paid by a buyer when he enters into a contract is an earnest for the performance of the contract, and can be retained by the seller if the buyer defaults. Equity does not regard this as a penalty against which it granted relief: see Workers Trust and Merchant back Ltd v Dojap Investment Ltd [1993] A.C. 573 578-9. Section 49(2) has never been understood as intended to overrule this principle, and it should not be so interpreted or applied.
So the search is for something more. In the present case the money spent by the plaintiff on work done in connection with the land does not qualify under this head, for the lack of evidence of the effect of such expenditure on the value of the land. Nor does the first defendant’s profit on re-selling at a higher price to the (third parties). In the first place, against the uplift of $500,000 in the price must be set the loss of interest already mentioned. Secondly, and more generally, their Lordships simply do not know the reason for the higher price. This may be due to movements in land prices generally. Once again their Lordships are being asked to speculate. This is not a proper basis on which the court should exercise its discretion.’


Goff, Mustill, Slynn, Nicholls and Steyn


33 of 1993




CitedWorkers Trust and Merchant Bank Ltd v Dojap Investments Ltd PC 22-Feb-1993
(Jamaica) The purchaser at an auction had been obliged under the terms of the auction contract to pay a deposit of 25%. He failed to complete, and the vendor took the deposit by way of forfeit. The standard deposit payable would be 10%. The Court of . .

Cited by:

CitedMIDILL (97Pl) Ltd v Park Lane Estates Ltd and Another CA 11-Nov-2008
Refusal to return Land Contract Deposit
The court was asked as to whether a seller could retain a deposit paid by the claimant on a sale where contracts had been exchanged but the buyer had proved unable to go ahead.
Held: The appeal against refusal of return of the deposit failed. . .
Lists of cited by and citing cases may be incomplete.

Land, Contract

Updated: 05 May 2022; Ref: scu.279045