Neutral Citation no.  NICh 4
Judgment: approved by the Court for handing down
(subject to editorial corrections)
which I find was a mistake as this sum was not agreed as being payable by the plaintiff. These were unusual contracts for the sale of land.
Mr Carson had completed an undated attendance note of discussions with the plaintiff which had referred to extension "for another year", (although Mr Carson stated in evidence that this was not the note made in January 1990, but must have been made some months later).
On 2 July 1990 the plaintiff wrote to the first defendant referring to a verbal agreement of January 1990 and stating that "we neglected to discuss many of the finer details in relation to this agreement and thus we have not managed to reach a firm agreement yet." The plaintiff then referred to the major hurdle being the term of the agreement and his offer of a five-year period proving unacceptable to the defendant. From the terms of this letter it would appear that the plaintiff did not believe that he had an agreement to pay the balance purchase price after five years.
The plaintiff produced correspondence with his solicitor and waived any privilege relating thereto. On 1 February 1991 the plaintiff wrote to his solicitor referring to an agreement with the first defendant of December 1989 (sic) and to the balance of the purchase price being "postponed for a minimum of a further year". There was further correspondence from the plaintiff in February 1991 and Mr Carson replied on 9 July 1991 referring to the January 1990 agreement for the extension to January 1991 (sic).
In a Case for Counsel dated 23 July 1991 Mr Carson referred again to the January 1990 agreement as involving an extension of the contractual completion date until January 1991. The letter of 9 July 1991 and the Case for Counsel indicate that Mr Carson was treating the further year as commencing with the alleged agreement date of January 1990 rather than the existing completion date of 23 June 1990. Further, the Case for Counsel records that in March 1990 Mr Carson spoke to Mr Nurse and it was accepted that there was an agreement for an extended completion date but no such date is stated to have been agreed. It later appeared from the evidence of Mr Carson and Mr Nurse that the first defendant had agreed in principle to an extended completion date but there had been no agreement as to the period of such extension.
On 25 July 1991 Mr Carson wrote to the plaintiff referring to the agreement with the first defendant in January 1990 and referring to instructions concerning extended completion for a further year. In addition the letter referred to a telephone call with Mr Nurse in March 1991 (this should read March 1990) where Mr Carson had noted that Mr Nurse had stated that the first defendant had no objection to the extension (the note was not available).
I did not find the plaintiff's evidence on these discussions, and on other matters referred to below, to be reliable. He felt obliged to retreat from his initial evidence about the discussions when faced with the contents of the documents referred to above. He overstated the effect of his discussions with the first defendant and was over-optimistic in relation to the prospects of securing an agreement on all aspects of an extension, as indeed was the case on other matters referred to below. He knew that the defendants were not averse to an extension of the period for final payment beyond 23 June 1990 and he proceeded with various undertakings on the site in the expectation that he would secure a firm extension, but there was no actual agreement for any extension.
(a) The 1989 contracts for the sale of the house and the site to the plaintiff remained in place.
(b) The plaintiff was in possession of the house and the site as a licensee. The defendants submitted that the plaintiff was in possession as a tenant at will and that is the general common law position referred to in Wylie's Irish Conveyancing Law 2nd Edition paragraph 12.33. However the general common law position did not apply where the payments were made in discharge of the purchase price as in Dunthorne & Shore v Wiggins  2 All ER 678. In the present case the payments to the 23 June 1990 were made to reduce the outstanding purchase price and I hold that the plaintiff was in possession under a licence.
(c) When the plaintiff increased the payments to £250 per week on 20 July 1990 he continued in possession and I find that the parties did not intend, nor did there arise, any change in the plaintiff's status as a licensee. While there are references to "rent" in the correspondence I find these to be mistaken, and not establishing the existence of a tenancy. On 21 September 1990 the defendants accepted a payment of £200 which backdated the weekly payment of £250 to the 23 June 1990.
(d) The £250 was paid and received by way of interest on the outstanding purchase price. I am satisfied that the continued possession of the plaintiff from 20 July 1990, with the payment by the plaintiff and acceptance by the defendant of the weekly sum of £250, render it more likely than not that those acts were performed in reliance on a contract with the defendants, which was consistent with the contract alleged by the plaintiff, namely that he should continue in possession in furtherance of the 1989 contracts for the purchase of the site and the house paying £250 per week by way of interest to reduce the outstanding purchase price. Accordingly there were sufficient acts of part performance for this variation to the 1989 contracts.
(e) The notices to complete dated 16 July 1990 making time of the essence of the contracts were waived by the defendants' acceptance of the variation from 20 July 1990. Wylie, paragraph 13.25.
(f) The other matters raised in the defendants' solicitor's letter of 3 August 1990 which were not put into effect, including the extension to 24 June 1991, were stated to be subject to contract and such contracts were never achieved. As a result there existed the 1989 contracts, as varied from 20 July 1990, and the proposed new 1990 contracts did not come into existence.
(a) The 1989 contracts as varied from 20 July 1990 remained extant as there had been a waiver of the effect of the notices to complete dated 16 July 1990 as outlined above, so that the defendants were not entitled to rescind the contracts for the reason given on 30 November 1990.
(b) The licence granted to the plaintiff was a contractual licence which would have been revocable as contemplated by the terms of the agreement. The licence would have continued until final payment or rescission and the non payment of the weekly payments was a breach of the terms of the licence by the plaintiff by reason of which the defendants were entitled to recover the payments. After repossession the plaintiff offered the overdue payments to the first defendant but he refused to accept those payments. As with any contract it is not every breach of the terms of the licence that would entitle the innocent party to terminate the licence. On the right to terminate the licence in the present case I adopt the analysis in Cheshire Fifoot Furmston's Law of Contract 13th Edition at pages 549-555. The right of the defendants to terminate the licence would have arisen in two types of cases –
(1) Where the party in default has repudiated the contract before performance is due or before it has been fully performed.
(2) Where the party in default has committed what in modern judicial parlance is called a fundamental breach. Breaches of this nature arise, if, having regard to the contract as a whole, the promise that has been violated is of major as distinct from minor importance.
As to repudiation at (1) above, I am satisfied that the failure of the plaintiff to make the payments for two weeks did not arise from an intention no longer to perform his side of the bargain.
As to fundamental breach at (2) above, I am satisfied, having regard to the contract as a whole, including the importance of the term requiring weekly payment and the seriousness of the consequences arising from a failure to make the payments for that period, that default for two weeks does not constitute such a fundamental breach.
Accordingly the plaintiff's failure to make two weekly payments did not entitle the defendant to terminate the plaintiff's licence and to repossess the house and site.
In any event I am satisfied that the plaintiff was, and would have been at all times, unable to make the final payment. Had this been a case where specific performance might have been ordered I would, for the above reason and in all the circumstances, have exercised my discretion to refuse an order for specific performance.
From 23 June 1989 to 23 June 1990 the plaintiff paid £10,400 at £200 per week. This was agreed between the plaintiff and the defendants as a payment on account of the purchase price, during which time the plaintiff received such rents as were obtained from the property. That was the agreement between the parties on the basis that ultimately the final payment would be made to the defendants. I consider that it must necessarily be implied into the arrangements that in the event of the plaintiff not acquiring the house and site there would be a repayment of the payments made on account of the purchase price less a charge to the plaintiff for use and occupation. Mr Crothers, on behalf of the defendants, considered the actual payment of £200 per week to be a reasonable sum for the rent of the premises and while Mr Wylie on behalf of the plaintiff stated that the sum was "not entirely reasonable" I accept the sum of £200 per week as a reasonable figure for use and occupation during this period. The plaintiff would be entitled to repayment of the £10,400 and I measure the payment for use and occupation at £200 per week, which would cancel out the sum of £10,400.
From the 23 June 1990 to 2 November 1990 the plaintiff made payments of £250 per week by way of interest on the outstanding capital payment. I make no order in respect of payments made during that period for the same reasons as set out above in relation to the previous year as it does not alter that position that the payments were converted from payments on account of the purchase price to payments by way of interest.
The plaintiff incurred expenses in the management of the premises during the period he was in possession but as these expenses were incurred in anticipation of making final payment to the defendants and as I find that the plaintiff was, and would have been, unable to make the final payment, he is not entitled to repayment of those expenses.
The plaintiff claims loss profits by way of loss of income from the house and site for the period from 2 November 1990 to 23 June 1995. I have rejected the plaintiff's case that he was entitled to extend the period of final payment to 23 June 1995. Had the plaintiff remained in possession after 2 November 1990 he would have received the value of the lettings and discharged the outgoings, including the interest payment to the defendants at £250 per week. It was accepted by Mr Kinney, on behalf of the plaintiff, that even up to 23 June 1991 there would have been no loss occasioned to the plaintiff by reason of the loss of possession. I find that the plaintiff sustained no loss of profits as the anticipated income would not have exceeded expenditure during the period up to any date when the plaintiff might reasonably have been expected to make the final payment.
The plaintiff claims damages for loss of opportunity to develop the premises. On the basis that the final payment would not have become due until 23 June 1995 the plaintiff valued that loss at £210,000 based on a valuation of the house and site at that time, less the payments that would have been made by the plaintiff. This item is not recoverable as I have found that there was no agreement to extend the date of final payment to 23 June 1995. Alternatively, the plaintiff provided a valuation of loss on 23 June 1991 at £75,000, calculated on the same basis. Again, as I have found that the plaintiff would have been unable to make the final payment in any event, I find that the plaintiff has suffered no such loss.
The defendants' counterclaim for the sum of £20,000, being the alleged loss sustained by the second defendant on the resale of the house for the sum of £10,000. The defendants did not give evidence and I am not satisfied as to the circumstances of any purported resale of the house and dismiss this item in the counterclaim.
The plaintiff is entitled to recover the sum of £2,000 from the defendants, with interest from 23 June 1989.