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GAZETTE
JULY AUGUST 1981
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.
xxiii