A purchaser agreed to buy land to be laid out in building plots. On payment of a deposit and giving notice, the purchaser was to be entitled to enter onto a particular plot in order to build on it. The arrangement met with difficulties, with the result that the purchaser was forced in 1956 to start proceedings for specific performance to require conveyance of plots 3 and 4. The defendant contended that the time for purchase of those plots had passed and that any case for specific performance was barred by delay or laches.
Denning LJ said: ‘The second point is on delay or laches. Counsel for the vendor said that there had been too much delay to enable the purchaser to get specific performance. On this point it is necessary to remember that when the deposit was paid there was a binding contract – binding on the vendor – whereby he let the purchaser into the land for the purpose of erecting the buildings. It was binding even though the vendor kept the cheque in his pocket. It was a contractual licence which the vendor could not repudiate at will. It created an equity. The purported repudiation by the vendor in April, 1947, was entirely inoperative. He could not renounce a binding contract in that way. The purchaser did not accept the repudiation as a rescission of the contract. He stopped building, but he did not take down his fence. He still remained in possession of the land, and, being in possession under a contractual licence, he had an equity to remain there. . . . But then it is said: When the vendor repudiated this contract, surely the purchaser ought to have taken him to court; he ought to have brought an action for specific performance then and there to compel him to perform his contract. I confess that argument did appeal to me at one time in the course of the case. … But I think the answer to it is this: once the purchaser went into possession of the land, having the contractual right to be there, he had not only an equity to be there. He had more. He had the benefit of a contract to sell him these two plots. That was not only an equity: it was an equitable interest in the land. He was in a sense the equitable owner of the land. So long as he was in possession of the land, he did not lose his rights simply by not proceeding at once for specific performance. . . . [reference to Crofton -v- Ormsbty ] Likewise we have here possession which is taken under a contract of purchase with an equitable right to be there. All that needs to be done is for the legal title to be perfected. In such a case, laches or delay is not a bar.’ Lord Justce Hodson: ‘I myself attach great importance to the putting round these plots 3 and 4 of a fence. What more can a man do ordinarily, if he buys or agrees to buy a piece of freehold land, in order to show that it is his land and mark it off from the neighbouring land than put a fence round it in that way. This is not the case of a man who had taken a lease and had to pay rent. He has nothing further to do. Land is not capable in the ordinary way of being reduced into possession except in such manner by the inclusion of it in a boundary fence. That is the first thing one is likely to do in any event and perhaps in many cases it may be the only thing one does. In this case the purchaser did a bit more: he started some building; he put up some sheds and did some road works. But the fence, to my mind, was sufficient intimation that he was claiming possession of that land. . . What is the position if the purchaser was in possession? In Fry LJ’s book on SPECIFIC PERFORMANCE (6th Edn)… para. 1110 reads: ‘Where the contract is substantially executed, and the plaintiff is in possession of the property, and has got the equitable estate, so that the object of his action is only to clothe himself with the legal estate, time either will not run at all as laches to debar the plaintiff from his right, or it will be looked at less narrowly by the court…”
Judges:
Denning and Hodson LJJ
Citations:
[1956] 3 All ER 705, [1957] 1 WLR 31
Jurisdiction:
England and Wales
Citing:
Cited – Crofton v Ormsby 1804
When the purpose of one party to a contract causing delay was to defeat the other party, if the other party then fails to complete, the delaying party cannot insist on performance of the contract: ‘The whole laches here consists in the not clothing . .
Cited by:
Cited – Frawley v Neill CA 1-Mar-1999
The modern approach to a laches claim, was not to test the facts against numbers of earlier cases, but to look at the situation as a whole, and to ask whether the delay made it unconscionable to permit the party to assert those rights. Aldous LJ . .
Cited – Patel and others v Shah and others CA 15-Feb-2005
The parties entered into a commercial agreement for the sale and purchase of properties.
Held: The claimants had failed to meet their part of the bargain, and had failed to make mortgage payments, leaving the defendants to do so. The . .
Cited – Heath v Kelly and Another ChD 24-Jul-2009
The defendant and the deceased had purchased a house as joint tenants in equity. The claimant sought to enforce an agreement for the sale of the defendant’s half share. Payment having been made. The defendant argued that the agreement was uncertain . .
Lists of cited by and citing cases may be incomplete.
Equity
Updated: 09 May 2022; Ref: scu.223433