High Court of Ireland Decisions

1. This Matter comes before the Court by way of an appeal from the decision of the Circuit Court on an application for directions by the Solicitor having carriage of a sale pursuant to an Order of the Circuit Court the original order for sale having been made on the 23rd July, 1991. While the factual matrix is clear and undisputed save in one particular, namely whether the purchaser (who was added as a co-Defendant to the application for directions) Chesington Limited ("the purchaser") was at any material time in sufficient funds to enable it to comply with its obligations under the order for sale. A number of legal issues arise upon which the law or the application of the law to the facts is uncertain.

2. The Action commenced on the 21st January, 1991 by Equity Civil Bill issued by Gerard Blackall, Plaintiff against Eileen Blackall and Rose Blackall, Defendants (together called "the parties") seeking partition or sale of premises Marino Park, Blackrock, Co. Dublin ("the premises"). The parties are entitled to the premises as tenants in common, the Plaintiff as to one undivided quarter share, the first named Defendant as to one undivided quarter share and the second named Defendant as to one undivided half share. By Order dated the 23rd July, 1991 it was ordered that the premises be sold by public auction subject to the approval of the Court and to such conditions of sale as should be settled by the Court and carriage of the sale was given to the Plaintiff's Solicitor Mr James O'Higgins. This Order was appealed to the High Court and on the 20th July, 1992 the High Court ordered the sale of the premises subject to the approval of the Court and to such conditions of sale as should be settled by the Court. The matter again came before the High Court on the 30th October, 1992 when it was ordered that the Solicitor for the first named Defendant Brendan Moloney ("the Solicitor having carriage") should have carriage of the sale. The first named Defendant discharged the Solicitor having carriage and a Notice of Change of Solicitor was filed in the matter on the 16th June, 1993. The High Court by order dated 15th December, 1993 confirmed that the Solicitor having carriage should have carriage of the sale notwithstanding the circumstance that he no longer acted for any party to the Action. By Order of the Circuit Court made on the 19th July, 1995 it was ordered that the premises be sold to the purchaser for the sum of £400,000 and liberty was given to the County Registrar or his authorised officer to sign the contract for sale in default of signing by any of the parties.

3. The contract of sale was available in Court on that day and it was signed on behalf of the purchaser. It was not however, signed by or on behalf of the Plaintiff or the Defendants then or at any later time. By that order the Defendants were allowed six months from the date of signing the contract to deliver vacant possession.

4. That order in turn was appealed to the High Court and by order of the High Court made on the 12th February, 1997 the order for sale was confirmed.

5. As the contract for sale was exhibited on affidavit before the Circuit Court on the 19th July, 1995 and as the order expressly refers to "the contract" it is indisputable that the sale approved by the Court was a sale upon the terms of that contract.

6. The delay in progressing the matter from the 19th July, 1995 to date was due to a determination by the Defendants that the sale should not be completed and in addition to appealing the order they refused to yield up vacant possession so that it was necessary inter alia to have them evicted by the Sheriff to make vacant possession available for the purchaser. The Defendants refused to sign an assurance to the purchaser. The delay in completing the sale was not in any way attributable to the Plaintiff or to the purchaser.

7. During the period of delay the premises have appreciated greatly in value. On the 7th December, 1998 the Defendants had obtained an offer of £1,040,000 for the premises. On the 11th December, 1998 the Solicitors to the Defendants wrote to the Solicitors to the purchasers in which they said -

8. The Solicitors to the purchaser replied on the 16th December, 1998 in effect stating that their client had an enforceable agreement to purchase the premises. By letter dated 17th December, 1998 the Solicitors to the Defendants wrote to the Solicitors to the purchasers as follows -

9. The Plaintiff at that time was willing to complete the sale to the purchaser and maintained this position at all times up to and including the hearing before me. On the evidence given by the purchaser's Solicitor I am satisfied that he was in funds to pay the deposit as of the 19th July, 1995 but was awaiting confirmation of the contract being signed by the parties. The deposit was tendered by him on the 18th May, 1999.

10. The contract for sale in is the Incorporated Law Society of Ireland standard form 1991 edition and is signed on behalf of the purchaser. It provides in the memorandum for a deposit of £40,000. The special conditions are not relevant to the issues raised on this application. The following general conditions are relevant.

11. General Condition 2

12. General Condition 3

13. The words "vendor" and "purchaser" respectively include (where appropriate) parties deriving title under them or either of them and shall apply to any one or more of several vendors and purchasers as the case may be so that the stipulations and the conditions contained shall be capable of being enforced on a joint and several basis.

14. General Condition 5 (a)

15. Where the sale is by private treaty the purchaser shall on or before the date of the sale pay to the vendor's Solicitor as stake holder a deposit of the amount stated in the memorandum in part payment of purchase price.

16. General Condition 31

17. The failure by the purchaser to pay in full the deposit hereinbefore specified as payable by him shall constitute a breach of condition entitling the vendor to terminate the sale or to sue the purchaser for damages or both but such entitlement shall be without prejudice to any rights otherwise available to the vendor.

18. No issue as to the Statute of Fraud was raised in these proceedings and while the question of whether a memorandum to satisfy the statute is necessary remains an open question in this jurisdiction there are a number of authorities for the proposition that on a Court sale none is necessary and that the Court will enforce its order; Daniell's Chancery Practice 7th Ed Vol. 1, 415, Sugden Vendor & Purchaser p. 109, A.G. -v- Day [1749] 1 Ves Sen. 466. The agreement here is contained in the Court order of the 19th July, 1995 as amended by subsequent orders the only relevant amendment being as to the Solicitor having carriage and the contracts signed by the purchaser. Upon the making of the order for sale on the 19th July, 1995 there was a binding contract for sale which the Court would enforce.

19. In a Court sale the Court is not the vendor Bank of Ireland -v- Smith & Ors [1966] IR 646 at 655-656. In that case and in Bank of Ireland -v- Waldron [1944] IR 30 the Court held that the party to the action having conduct of the sale was the vendor and that their Solicitors and auctioneers were their agents for whose acts they were liable. Insofar as it was so held the statements were obiter and not in accordance with authority. The Solicitor having carriage is agent for all the parties to the suit: see Daniell's Chancery Practice 7th Ed. Vol. 1 p. 876 and Dalby -v- Pullen [1831] Russ & M 296, Re Bannister, Broad -v- Munton [1879] 12 Ch. D.131. Again see Hallsbury 4th Ed. reissue Vol. 42 para 135 -

20. Again the effect of the Rules of the Superior Courts Order 51 Rule 1 is that all parties to the suit are bound by the sale. In these circumstances I am satisfied that the parties i.e. the Plaintiff and the Defendants jointly are the vendors and that the Solicitor having carriage is their agent so that they are bound by his acts of defaults. Thus while in both Bank of Ireland -v- Smith and Bank of Ireland -v- Waldron the party having conduct was held liable to the purchaser he being the vendor named in the agreement for sale it is clear that that party would be entitled to recover over all or a proportion of the expense incurred against the other parties to the suit depending on the circumstances: Smith -v- Nelson 2 Sim and Stu. 557, Berry -v- Johnson 2 Yo and Col. 564. In arriving at the view as to who is the vendor I have considered the judgments in Connolly -v- Keating (No 2) [1903] 1 IR 356, Union Bank -v- Munster 37 Ch. D 51 and the statements of Jessel M.R. In Re Bannister, Broad -v- Munton 12 Ch D 131 each of which suggest that vendor's equivalent to the party having conduct but in each case I am satisfied that the use of such language was appropriate and sufficient for dealing with the rights of a purchaser under an order for sale seeking compensation or to be released from his contract but was not intended to define "vendor" contrary to existing authorities as consisting of some only of the parties to the suit in which the order for sale was made.

21. It was argued on behalf of the Defendants that the general conditions of sale condition 5(a) is a condition precedent to any contractual liability being incurred. The Defendants relied upon Myton Limited -v- Schwab-Morris [1974] 1 WLR 331 where a condition as to payment of deposit was so held to be. The question whether such condition was a condition precedent or a condition of the contract was left open by the Supreme Court in Kramer -v- Arnold [1997] 3 IR 43 at 60 and in Damon S.A. -v- Hapag-Lloyd S.A. [1985] 1 WLR 435. The contrary view namely that the obligation to pay a deposit was a term of the contract was taken in Millichamp -v- Jones [1983] 1 All ER 267 and in his judgment Warner J. reviewed the authorities in arriving at this conclusion. I prefer the view expressed by Warner J. and accordingly I construe clause 5(a) as a term of the contract non-performance of which would entitle the vendors to rescind immediately but so long as they refrain from so doing the contractual obligations of both vendor and purchaser remain. I am fortified in this view by the terms of general condition 31 which provides that failure to pay the deposit in full constitutes a breach of condition entitling the vendor to terminate the sale and recover damages: the damages can only be for breach of contract. See also the definition of sale in general condition 1 - "means the transaction evidenced by the memorandum the particulars and the conditions"

22. The obligation under condition 5(a) is to pay the deposit on or before "the date of the sale". "Date of sale" but not "date of the sale" is defined in general condition 2. Insofar as "date of sale" is concerned it is defined as the date upon which the contract becomes binding on the vendor and the purchaser. I hold that the same was the date upon which the order for sale to the purchaser was made namely the 19th July, 1995. As of that date the Court had power to enforce the sale against the parties and the purchaser notwithstanding the absence of any memorandum: Daniell's Chancery Practice 7th Ed. Vol. 1 p. 415, Sugden Vendor and Purchaser p. 109, A.G. -v- Day 1 Ves. Sen. 218. However, there is an inconsistency in that general condition 5(a) refers not to "date of sale" but to "date of the sale". In the event of an inconsistency a clause in the contract must be construed contra proferentem . Reading the agreement in conjunction with the order of 19th July, 1995 it is arguable that it was envisaged that the contract would be signed by the parties to the action and the purchaser. This would suggest a misapprehension by all concerned that it was necessary for the agreement to be effective that it should be so signed. The agreement was not in fact signed by the Plaintiff or the Defendants although the Plaintiff was at all times willing to perform the agreement. On this basis it would be open to take the view that the obligation to pay the deposit in this case would only arise when the purchaser was notified that the agreement had been executed by the parties to the action. Support for this view is to be found in Kramer -v- Arnold [1997] 3 I.R. at p. 55 where Keane J. said -

23. Adopting this approach it may well have been the intention of the parties that the deposit should have been paid immediately the agreement was signed by the parties to the suit the same having already been signed by the purchaser. However, the intention of the parties in the case of a sale by the Court is not paramount. A sale by the Court is a sale on the terms approved by the Court and any variation in such terms must be approved by the Court and not by the Solicitor having carriage: Daniell's Chancery Practice 7th Ed. Vol. 1 p. 904-905. Accordingly, neither the parties nor the purchaser had power to vary the requirement that a deposit should be paid in accordance with the terms of the agreement approved by the Court. It seems to me to follow from this that there can be no question of waiver or acquiescence in breach or estoppel operating to alter the terms of the agreement approved by the Court.

24. I have come to the conclusion that the word "the" in general condition 5(a) is included in error and in construing the contract I am entitled to reject the same and should do so: Norton on Deeds 2nd Ed. p. 91. Accordingly, I hold that the deposit was payable on or before the date of sale, the 19th July, 1995; it was not paid.

25. Having regard to the finding that the deposit was not paid in accordance with general condition 5(a) there was a breach of condition and the provisions of general condition 31 apply; the vendor became entitled to terminate the sale but until such time as the sale was terminated the agreement remained in force. "Vendor" is defined in general condition 3 and the definition is of assistance in determining whether one or more of the several vendors but not all can serve a valid and effective notice under the agreement insofar as it stipulates that liability is joint as well as several. The Defendants contend that they were entitled to serve such a notice and relied by way of analogy on a number of cases relating to the giving of notice to quit. There is authority for the proposition that one of several joint lessors can serve a valid and effective notice to quit although there are also authorities to the contrary. The cases tend to turn on the wording of the lease in question or in some cases on agency. However, insofar as tenants in common are concerned signature by one of two was held to be bad in Moroney -v- Moroney IR 8 CL 174. It is best to regard cases on signature of notices to quit as sui generis . The general law as between landlord and tenant and the rights of joint tenants and a fortiori tenants in common is as set out by a strong Court of Appeal in Leek and Moorlands Building Society -v- Clarke and Ors [1952] 2 All ER 492, which held that where two joint tenants had a right to surrender rights held by them jointly such rights could not be exercised by one of their number. In short, there the Court refused to hold that a clause giving rights to lessees should be read as giving such rights to either of the lessees. More strongly against the entitlement of one or some but not all the parties to a suit intervening is Dean -v- Wilson 10 C.D. 136 where it was held that interference in a Court sale by a party to the suit who had not been given carriage was a special contempt (i.e. a contempt not coming within the Rules of the Superior Courts Order 41 Rule 7); see Daniell's Chancery Practice 7th Ed. Vol. 1 at 716-717. On the basis of the authorities I am satisfied that the Defendants here had not power or authority to interfere in the sale. In the event of their being dissatisfied with the manner in which the sale was proceeding the proper course for them to adopt was to apply to the Court. Likewise, where an issue such as the failure of the purchaser to pay the deposit arises the party having conduct or the Solicitor having carriage should apply to the Court for directions. It is not necessary for me to decide whether a notice given by all the parties through the Solicitor having carriage would have been effective but I take the view in the circumstances of this case that it would. Without authority of all the parties or the approval of the Court the Solicitor having carriage has no authority actual, implied or apparent to give such notice. However, the purchaser having tendered the deposit it is not now open to take any of these courses. In these circumstances I hold that the purported termination by the Defendants by the letter dated 17th December, 1998 was of no effect and that the contract remains in existence.

26. The Defendants in this matter referred to the power of the Court to open biddings. The practice was widespread prior to the Sale of Land by Auction Act, 1867 which Act also applied to Court sales by private treaty; In Re Oriental Bank Corporation 56 NTLS 868 and Wiley Judicature Acts and Re Bartlett 16 Ch. D. 561. It is now well settled however, that bidding may only be reopened on the ground of fraud or improper conduct in the management of the sale; Munster Bank -v- Munster Motor Company [1922] IR 15. The Defendants argue that the failure of the purchaser to pay the deposit was improper conduct. The power has been exercised where there has been a misstatement in the conditions of sale. It was held in Longvale Brick and Lime Works Limited [1917] 1 Ch. 321 that improper conduct does not mean something bordering on fraud. However, having considered the cases I am satisfied that this jurisdiction was exercised when something occurred in the course of the sale which resulted in a sale at an undervalue to the detriment of the parties interested in the suit or a sale at an overvalue to the detriment of the purchaser e.g. where there had been puffing at the auction to the detriment of the purchaser. The practice of opening bidding does not apply in the present case nor is it any necessity that it should as the terms of the contract for sale adequately protect the parties who in the event of a failure to pay the deposit can (as can the Solicitor having carriage) apply to the Court which has full power to terminate the contract.

27. Accordingly, I find that the contract has not been terminated but remains in full force and effect. In addition to the purchase price the purchaser must pay interest on the deposit (less the sum of £5,000 already paid to the Solicitor having carriage) at the contract rate from the date of sale, the 19th July, 1995 to date of completion. I will hear Counsel for the Solicitor having carriage as to the directions which are required. I require to be addressed as the appropriate order as to costs.