The Gazette 1981

GAZETTE

JULY AUGUST 1981

Recent

Irish

Cases

BREACH OF CONTRACT

Claim for Damages arising out of

delay in completion of Sale —

whether "time of the essence".

The Defendant agreed by contract in

writing dated 17 December 1974 to

sell certain lands in Co. Meath to the

Plaintiff for £325,000. Special

Conditions 3 and 4 of the contract

provided as follows:

"(3) The Vendor reserves the right

to hold an auction of all the stock,

farm machinery, equipment and

utensils on the properties which

items are specifically excluded

from the sale.

(4) Prior to the completion of the

sale the Purchaser shall purchase

the silage stored on the lands the

subject matter of this contract and

in the event of default of

agreement on the price then at a

price to be fixed by an auctioneer

to be nominated by the vendor

which said auctioneer shall act as

an expert; the purchase monies for

such silage to be paid with the

balance of the purchase monies on

closing".

The date fixed for completion was 7

January 1975. Time was not made of

the essence of the contract.

During the negotiations prior to

the signing of the contract the

Defendant had said he would sell the

cattle on the lands to the Plaintiff at

market value. There was no reference

to the cattle in the contract sent by

the Defendant's solicitors to the

Plaintiffs solicitors on 6 December

1974 and the Plaintiff tried to

telephone the Defendant in England

to discuss the sale of the cattle but

failed to contact him. The Plaintiff

wrote to the Defendant on 16

December 1974 as follows:-

"My purpose in phoning you was

to see how you would meet me

with the cattle and machinedry.

However I will depend on the

reputation I have got of you to

meet me on this. As one West of

Ireland man to another I know

you will get me off to a good

start".

By letter of the same date (16

December

1974) the PlaintifTs

solicitors returned the contract

executed by the Plaintiff (purchaser)

with the deposit to the Defendant's

solicitors. When sending requisitions

on title to the Defendant's solicitors

on 20 December 1974 the PlaintifTs

solicitors said:-

"Our client wishes to have the sale

closed on or before the 5th day of

January as we understand that

your Mr. Marren will be departing

for Geneva on the 5th day of

January".

A meeting between the Plaintiff and

the Defendant arranged for 3

January 1975 was cancelled when

the Defendant's manager telephoned

the Plaintiff to inform him that the

Defendant had changed his mind

about selling the cattle to the Plaintiff

as the Defendant proposed to take

the cattle to England. On 3 January

1975 the Defendant's solicitor told

the Plaintiffs solicitors that he (the

Defendant's solicitor) could not close

the sale on 7 January 1975 (the

contract closing date) because he was

going away on 5 January 1975 and the

Defendant's solicitor suggested it be

closed on 5 January 1975, but this was

not feasible because the question of the

cattle and the silage had not been

resolved. By letter of 7 January 1975

the Plaintiffs solicitors told the

Defendant's solicitors that the

purchase money was available and

suggested closing the sale on 11

January 1975.

In mid-January 1975 arrange-

ments were made to have the

cattle valued by an independent

valuer but his valuation was not

acceptable to the Plaintiff. The sale

was subsequently closed on the 21

January 1975 with the Plaintiff

purchaser

purchasing

cattle

elsewhere to stock the lands being

purchased.

The Plaintiff claimed that the

Plaintiff had expressly made it known

to the Defendant before the

agreement was executed that the

Plaintiff urgently required vacant

possession for the purpose of

stocking the lands and that in these

circumstances it was an implied term

of the agreement that time was to be

deemed of the essence. Alternatively,

the Plaintiff claimed that it was an

implied term of the agreement that

the same would be completed without

any undue delay. The Plaintiff

claimed that the price of cattle

increased between 7 January 1975

(contract closing date) and 21

January 1975 (actual closing date)

and that he suffered the loss of

£19,400 being the extra amount paid

by him in stocking the lands.

The

Court

considered

that

although the Plaintiffs claim was at

common law for damages it must

approach the case as if it were a

claim for equitable relief. The Court,

referring to the equitable maxim that

the time fixed for the completion of a

contract was not of the essence of a

contract noted the dictum of Lord

Parker in

Stickney

Keeble

[19151

A.C. at page 416 as follows:

"This maxim never had any

application to cases in which the

stipulation as to time could not be

disregarded without injustice to

the parties, when, for example, the

parties, for reasons best known to

themselves, had stipulated that the

time fixed should be essential, or

where there was something in the

nature of the property or the

surrounding circumstances which

would render it inequitable to treat

it as a non essential term of the

contract".

Held

(per Hamilton J.) that there was

nothing in the nature of the property

in the sale which would make it

inequitable in the particular case for

the Court to treat the time fixed for

completion of the contract for sale as

a non-essential term of the contract.

In so holding, the Court noted that

tht contract provided only three

weeks between the date of execution

of the contract and the date fixed for

completion and that the Defendant

had reserved the right to hold an

auction and had provided for the

purchase by the Plaintiff of silage at

an agreed price and for the price to

be fixed in default of agreement by an

auctioneer and for that silage

purchase price to be paid with the

balance of the purchase money for

the property on closing. The Court

also noted that Christmas and New

Year had intervened. The PlaintifTs

claim for damages for delay was

therefore dismissed.

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