The issue was the proper construction and effect of condition 6.8 of the Standard Conditions of Sale, 2nd edition, in relation to the giving of a notice to complete a contract for the sale of land.
Held: The condition provided exclusively for the circumstances in which a notice to complete could be given in respect of a contract which incorporated the terms of the Standard Conditions of Sale, 2nd edition, and that any right at common law to serve a notice to complete was thereby excluded.
The contract also purported to exclude section 49(2). The vendor failed to complete, but sought not to return the deposit. The judge said: ‘It is a startling proposition that, by excluding that section in relation to the contract, the purchaser has prevented itself from obtaining repayment of the deposit even if the vendor has been flagrantly in breach of the contract and the purchaser has not. It also seems curious, in relation to that submission, that under the contract in this case the vendor’s solicitors hold the deposit as stakeholder, since that clearly implies that there could be circumstances in which they would have to pay the deposit back to the purchaser rather than account for it to their client the vendor.
The answer to this contention is to be found in the judgment of Mr. Gerald Godfrey Q.C. in Dimsdale Developments (South East) Ltd. v. De Haan, 47 P. and C.R. 1. He held that the vendor’s notice to complete was validly served but, despite that, the purchaser sought the return of the deposit under section 49(2). He therefore had to consider the ambit of the subsection in the light of a number of decided cases. Before doing that he made the following observations of general relevance: ‘It is to be observed that a purchaser has no need to pray this subsection in aid when it is not he but the vendor who is the defaulter. The subsection is needed only to enable a purchaser who is himself in default to recover his deposit.’
He consideralso circumstances in which the court might conclude that even though the purchaser was in default the justice of the case might require that the deposit be repaid to the purchaser. It is that jurisdiction which, it seems to me, is excluded by the special condition in this contract.’
Timothy Lloyd QC
[1996] Ch 307
Law of Property Act 1925 49(2)
England and Wales
Citing:
Cited – Rightside Properties Ltd v Gray ChD 1975
The vendor had served an invalid notice to complete on the purchaser. When the purchaser did not comply with the notice the vendor purported to terminate the contract by accepting the purchaser’s alleged repudiation. Walton J held that it was in . .
Cited – Dimsdale Developments (South East) Ltd v De Haan 1983
The court considered the interpretation of clauses allowing a notice to complete a contract for the sale of land. Godfrey QC said: ‘In my judgment this notice, served as it was under cover of the letter of November 10, 1981, referring to the . .
Cited by:
Cited – Astea (UK) Ltd v Time Group Ltd TCC 9-Apr-2003
The question of whether a reasonable time has been exceeded in performance of a contract is ‘a broad consideration, with the benefit of hindsight, and viewed from the time at which one party contends that a reasonable time for performance has been . .
Cited – Aribisala v St James Homes (Grosvenor Dock) Ltd ChD 12-Jun-2007
The parties had agreed in a contract for the sale and purchase of land to exclude the application of section 49(2). The buyer had failed to comply with a notice to complete.
Held: The parties cannot contract out of section 49(2). The . .
Lists of cited by and citing cases may be incomplete.
Contract, Land
Leading Case
Updated: 09 November 2021; Ref: scu.223519