The Gazette 1981

JULY AUGUST 1981

GAZETTE

solicitors that a claim for interest was being made. The Defendant's solicitors raised further objections on 28 May and these were replied to on 30 May. On the same day the Plaintiffs' solicitors wrote directly to the Defendant requiring completion within 28 days and making time of the essence of the contract. On 6 June the Defendant's solicitors wrote accepting the replies to requisitions and requiring the furnishing of a statutory declaration and enclosing a draft deed of assignment which was immediately approved and sent back. On 11 June the Defendant's solicitors wrote requesting an appointment to close but on 19 June made it clear that the Defendant was denying liability to pay interest. Subsequently an appointment was made to close the sale on 10 July. There was disagreement as to whether the closing had been arranged on the basis that the Defendant had agreed to pay interest up to 10 July without qualification or without prejudice to the Defendant's right to claim it back. At the closing meeting on 10 July a search in the Registry of Deeds which only became available on that day, revealed a judgment mortgage against the interest of the Plaintiff vendors. The Plaintiffs' solicitor gave his personal undertaking that he would discharge the mortgage out of the purchase price. The Defendant solicitors were prepared to accept this undertaking but maintained that the existence of the judgment mortgage removed the liability on the Defendant to pay interest. The Defendant's solicitors offered to close the sale on the basis of the Plaintiffs' solicitors' undertaking, on the understanding that the obligation to pay interest would be determined by a Vendor and Purchaser summons. This was not accepted by the Plaintiffs' solicitors. The parties continued in dispute for some time and eventually on 9 August the Plaintiffs' solicitors suggested that the sale be closed without prejudice to the interest question and that the interest be put on joint account and an application be made to the Court to determine the Defendant purchaser's liability. The sale was actually closed on that basis on 23 August. Condition 4 of the Conditions of Sale provided as follows: "The purchase shall be completed

and the balance of the purchase money paid by the purchaser on or before the closing date which shall be the date specified in the Memorandum . . . Completion shall take place at the office of the vendors solicitor. If by reason of any default on the part of the purchaser the purchase shall not be completed on or before the closing date, the purchaser shall pay interest to the vendor at the rate specified in the Memorandum on the balance of the purchase money remaining unpaid from the closing date up to the date of actual completion, or the vendor may e l e c t . .. to take the rents and profits less the outgoings of the property for such periods in lieu of interest . . ." The Court having referred to the case of Bayley-Worthington & Cohen's Contract [ 19091 1 Ch. 648 firstly concluded that there was "default" on the Defendant's part within the meaning of Condition 4 by reason of the hold up in the delivery of requisitions and the Court secondly concluded that there was no "default" on the Defendant purchaser's behalf in relation to the delay in closing the sale between 18 May (when the Defendant's solicitors received the replies to requisitions on title) and 7 June (when the Plaintiffs' solicitors received intimation that the title was satisfactory). The Court thirdly concluded that the delay in closing after 7 June was occasioned by the Defendant's unjustified insistence that interest was not payable. Held (per Costello J.): 1. That although some of the delay between 18 May and 10 July (the date of the abortive closing) was attributable to the ordinary problems which could occur in the investigation of a complex title it did not mitigate the liability of the Defendant purchaser under Condition 4; and the Court could not apply a term into that condition that the amount of interest was to be limited to the period between the specified closing date and the date of actual completion which equalled the period prior to the specified closing date during which the Defendant purchaser was in actual default. 2. In considering the effect of the events of 10 July on the

Defendant purchaser's liability to pay interest on that date, that as a purchaser owed a duty to his vendor in the course of the implementation of a contract for same so too did a vendor owe a duty to the purchaser; that the sale could well have been closed on 10 July and that the reason for its not being closed was' a failure by the Plaintiff vendors to agree to close on the terms suggested by the Defendant purchaser's solicitors; and that those terms so proposed by the Defendant purchaser were reasonable ones and were the basis on which the sale was actually closed on 23 August. 3. That Condition 4 should be construed as meaning that if added to the default of the purchaser which results in his liability to pay interest under the Contract there was "wilful default" on the part of the vendor after the specified completion date which resulted in further delay in actual completion, that interest should not be payable for that period attributable to the vendor's "wilful default", and that by failing to close on 10 July the Plaintiff vendors were in "wilful default" as that term was understood in the law of vendor and purchaser; and that the Plaintiff vendors were disentitled to interest for the period from 10 July to 23 August; and that they were entitled to interest only from 18 May to 10 July at the Contract date. Menton v. Mannion 119481 I.R. 324 and Sheridan v. Higgins 119711 I.R. 291, and In Re Young and Harston's Contract 31 Ch.D. 168 at 174, considered and applied. Northern Bank Limited & Ors. v. John B. Duffy - High Court (per Costello J.) - 16 March 1981 - unreported.

Summaries of judgments pre- pared by John F. Buckley and edited by Michael V. O'Mahony.

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