304 / 336
Specific performance in sale of land refused due to
defective title.
The claim is for specific performance of an agreement
made between the plaintiff as receiver of Tractasales
(Longford) Ltd., and the defendant for the sale of a
large garage and premises of that company contained
in Folios 9792 and 12146, Co. Longford, on the Edge-
worthstown road near Longford. These premises were
in fact registered on three separate Folios, namely,
Folio Nos. 9972, 12386 and 12146, all in County Long-
ford. The total area of the three Folios was 2 acres,
2 roods and 6 perches.
On 11 September 1969 by a Debenture issued by
Tractasales (Longford) Ltd. to United Dominions Trust
(Ireland) Ltd. (hereinafter called U.D.T.), the company
charged its undertakings and all its property assets in
exchange for a payment of £25,000 to U.D.T. On
1 June 1971 a second debenture on similar terms was
made with U.D.T. By deed of 26 July 1971 the plaintiff
was appointed by U.D.T. receiver of this property.
The plaintiff as receiver caused the premises to be
offered for sale by public auction on 26 February 1974.
The defendant attended the auction, and was declared
the purchaser, and signed a contract of purchase the
same day for £30,500, having duly paid a deposit of
£7,625. The standard conditions of sale of the Law
Society were used. A special condition bound the Vendor
to discharge all registered charges before closing, and
to pay Land Registry fees for cancellation of the charge.
However, the omission of any reference in the condi-
tions of sale to Folio 12386 was a
mutual mistake
between the parties, as they thought they were dealing
with all the Folios comprised in the premises. In Feb-
ruary 1974, apart from the two charges to U.D.T.,
there was registered on Folio 9792 two further Judg-
ment Mortgages, one of 23 November 1971 in favour of
Doggett, and one of 26 March 1973 in favour of Smith;
on the same date in 1973 a further Judgment Mort-
gage in favour of Smith was registered on Folio 12146
and also on Folio 12386. The closing date of sale was
fixed for 28 May 1974.
The solicitors for the vendor sent a copy of the con-
tract and of the debentures to the solicitor for the
purchaser on 12 March 1974 and asked for Requisi-
tions on Title. A reminder was sent on May 14 warning
the purchaser that if the sale were not closed on May 30
interest would be charged. On May 12 Requistions on
Title were sent by the solicitor for the purchaser, and
replies were sent, together with a draft transfer
approved for engrossment, on May 23. On May 22
Longford Arms Motor Works registered a further Judg-
ment Mortgage against Tractasales for £1,429 in respect
of each of the three Folios. This provoked further
correspondence, and, on August 28 the solicitor for the
purchaser inquired when the sale would be closed.
There was a reply on September 24 enclosing a deed
drafted by counsel, and expressing the hope that the
Judgment Mortgages would be cleared. On 1 July 1974
Foster Finance had registered a further Judgment Mort-
gage on Folios 12386 and 12146 against Tractasales for
£2,250. On October 23 solicitors for the vendor wrote
confirming that they would be in a position to close,
and that the deed had been duly executed by the plain-
tiff as receiver, by Tractasales and by U.D.T. As regards
the other Judgment Mortgages, arrangements had been
made with the parties concerned that their solicitors
would attend the closing, and be paid out of the pro-
ceeds of sale.
About this time, the defendant decided that, due to
changes in his family circumstances, he was not anxious
to proceed with the sale, and was seeking advice about
the return of his deposit. The defendant was advised he
could not avoid the contract, and was reluctantly pre-
pared to close. In November 1974 a preliminary meet-
ing was held between the parties about the closing, and
the defendant objected to the registered Judgment
Mortgages not being discharged. Negotiations con-
tinued about this and a further appointment for closing
was made in January 1975. This did not take place,
as the defendant raised objections about planning per-
mission for a change of user which had recently
occurred in the premises, which had not been satisfac-
torily answered by the Longford Planning Authority.
Shortly afterwards, the defendant, having inspected a
Land Registry map, discovered for the first time that
the lands included Folio 12386. Upon being informed of
the existence of Folio 12386, the solicitor for the vendor
obtained the Land Certificate relating to it, and pre-
pared a new engrossed transfer of all three Folios. It
was then agreed that the defendant would pay one
month's interest. Terms were arranged whereby the
moneys would be retained on joint deposit in the names
of the two solicitors concerned.
A final appointment was made for closing in the
Four Courts on 18 March 1975 and the solicitor for the
vendor, and the defendant and his solicitor attended.
On the ground that two of the Judgment Mortgages had
not been discharged, the defendant refused to complete,
as the vendor refused the offer made by the defendant
to retain £4,500 pending settlement of outstanding
claims. The defendant claims as follows :
(1) That, as Folio 12386 was not mentioned in the
contract, the vendor had failed to show title. It was
held that this was a genuine mutual mistake between
the parties and that the vendor was able and willing
to rectify the matter as soon as he became aware of it.
(2) That, as this was a business contract, time must
be deemed to be of the essence of the contract. As the
defendant did not purport to repudiate the contract on
the ground of delay, the vendor's delay was acquiesced
in by the defendant.
(3) That the title ultimately offered to the defendant
was a doubtful title, and that therefore he was entitled
to refuse to complete the contract. As regards the two
Judgment Mortgages which were to be discharged six
weeks after the completion of the contract, there was a
difficulty that, by reason of the fact that Folio 12386
was not included in the contract, and that U.D.T.
had not got their debenture charged on the property,
consequently the interest of that Judgment Mortgage,
which had been registered against Tractasales after the
date of the contract and before the date of the transfer,
would not be postponed to any interest arising from the
subsequent transfer between the parties. It was held
with hesitation that the delay period of six weeks after
payment of the full purchase money and before the
necessary cancellation of these Judgment Mortgages
was a concession made by the defendant. The purchaser
defendant at the closing on 18 March 1975 was entitled
to insist'''that, upon payment of the whole purchase
money, he would get a sufficient good title which he
could entrust to a bank. Consequently the plaintiffs
claim for specific performance must be dismissed.
(Tempany v. Hynes
— Finlay P. — unreported —
in July 1975.)
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