Cumberland Consolidated Holdings Ltd v Ireland

Cumberland Consolidated Holdings Ltd v Ireland

LAND; Sale of Land, Other Land

COURT OF APPEAL

LORD GREENE MR, DU PARCQ AND TUCKER LJJ

11, 14 JANUARY, 1 FEBRUARY 1946

Sale of Land – Vacant possession – Position of parties pending completion – Maintenance of property – State and condition of property sold – Breach of

undertaking to deliver vacant possession.

All England Law Reports 1936 - books on screen™

All ER 1946 Volume 1

Preamble

On 24 March 1945, the appellant, as vendor, and the respondents, as purchasers, entered into a contract for the sale of certain freehold property which included

a warehouse. The property was expressed to be sold with vacant possession on completion, which took place on 3 May 1945. The contract also provided that

the purchaser bought with full notice of the state an condition of the property sold and took the property as it was. The warehouse, which covered a large area,

had been disused for some time and had been damaged by fire. Underneath the upper part of the warehouse, and extending over the whole area, there were

cellars. When the negotiations began about two-thirds of the height of the cellars was filled with rubbish consisting chiefly of bags of hardened cement and

empty drums. During the negotiations the appellant undertook to remove the rubbish, which was valueless. A small part was in fact removed, but the greater

part, sufficient effectively to preclude the user of the property by the respondents in the way and for the purpose they intended, was was left behind. The

appellant, having refused to remove the remainder of the rubbish, the respondents had it removed at their own expense and successfully sued the appellant in a

county court for the amount paid by them. On appeal it was contended on behalf of the appellants (i) that the respondents could not complain of the presence

of the rubbish by reason of the condition in the contract which related to the state and condition of the property sold; (ii) that the expression “vacant

possession” was used in order to show that the property was, on completion, to be transferred free from any claim of right to possession in the vendor or any

third person, and that the presence, on the premises, of chattels which had been abandoned by the vendor did not constitute on evidence any such claim of

right:—

Held – (i) The rubbish formed no part of the property sold, and its presence upon the property sold could not be said to be covered by the words “state and

condition of the property sold,” which related to the physical condition of the property sold itself.

(ii) subject to the rule de minimis, a vendor who left property of his own on completion, could not be said to give vacant possession, since by doing so he

was claiming a right to use the premises for his own purposes, as a place of deposit for his own goods, inconsistent with the right which the purchaser had, on

completion, to undisturbed enjoyment.

(iii) the right to actual unimpeded physical enjoyment was comprised in the right to vacant possession, and the existence of a physical impediment, which

substantially prevented or interfered with the enjoyment of the right of possession of a substantial part of the property, to which the purchaser did not

expressly or impliedly consent to submit, stood in the same position as an impediment caused by the presence of a trespasser. The appellant had therefore

failed to deliver vacant possession.

(iv) pending completion, the appellant stood in the position of quasi-trustee to the respondents, and, by the act of abandonment of the rubbish had

committed a breach of trust, for which an action would have lain for damages.

Notes

It is curious that the expression “vacant possession” does not appear ever to have been authoritatively defined. In connection with service of summons in

ejectment it has been held that there may be no vacant possession when beer is left in a cellar (Savage v Dent (1736) 2 Stra 1064), or when furniture or goods

are left on the premises (Isaacs v Diamond [1880] WN 75). For the purpose of sale of land the expression is generally assumed to mean possession of property

free from any claim of right by the vendor or a third party, but the court holds in this case that the expression extends to freedom from any physical

impediment to enjoyment which would substantially interfere with the enjoyment of the property. The court takes the view that as it is the duty of a vendor to

eject an unauthorised occupant in order 􀂭 284􀀉 to give vacant possession to a purchaser, so it is equally his duty to remove any substantial accumulation of

chattels as would by their continued presence preclude the use of the word “vacant” in regard to the premises.

As to Position of Parties Pending Completion, see Halsbury, Hailsham Edn, Vol 29, pp 337–344, paras 456–461; and for Cases, see Digest, Vol 40, pp

178–190, Nos 1472–1594.

Cases referred to in judgment

Lysaght v Edwards (1876), 2 ChD 499, 40 Digest 182, 1518, 45 LJCh 554, 34 LT 787.

Clarke v Ramuz [1891] 2 QB 456, 40 Digest 184, 1536, 60 LJQB 679, 65 LT 657.

Royal Bristol Permanent Building Society v Bomash (1887), 35 ChD 390, 40 Digest 187, 1562, 56 LJCh 840, 57 LT 179.

Engell v Fitch (1869), LR 4 QB 659, 40 Digest 263, 2284, 10 B & S 738, 38 LJQB 304.

Appeal

Appeal by the defendant from an order of His Honour Judge Allsebrook, made at Whitehaven and Millon County Court, and dated 10 October 1945. The facts

are fully set out in the judgment of the court delivered by Lord Greene MR.

J P Ashworth for the appellant.

G Heilpern for the respondents.

Cur adv vult

1 February 1946. The following judgment was delivered.

LORD GREENE MR [delivering the judgment of the court]. The appellant, who was the defendant in the action, appeals against a judgment for the sum of

£80 0s 7d with costs, awarded against him by way of damages for breach of an undertaking to deliver vacant possession of a warehouse which was the subject

matter of a contract of sale between the appellant as vendor and the respondents as purchasers.

The contract was in the form of a written memorandum, which was signed on 24 March 1945, and embodied particulars and special conditions of sale,

and also what are known as the national conditions of sale. The property sold was of freehold tenure and consisted of a warehouse, yard and buildings

described in the particulars. The purchase price was £1,000. By cl 7 of the special conditions the property was expressed to be sold with vacant possession on

completion. No date for completion appears in the copy of the contract before the court, but completion in fact took place on 3 May 1945. National condition

9(3) provided that:

All England Law Reports 1936 - books on screen™

All ER 1946 Volume 1

Preamble

‘… the purchaser shall be deemed to buy with full notice in all respects of the actual state and condition of the property sold … and shall take the

property as it is.’

The question which we have to decide is whether upon the facts as found the county court judge was wrong in law in holding that the appellant had failed

to give vacant possession. If he was right in so holding, no question is raised as to the correctness of the judgment in regard to the measure of damage. It is

not suggested that the contractual force of the obligation to give vacant possession came to an end when the conveyance was executed.

The facts are of an unusual character, and the question of law to which they give rise has not apparently been the subject of previous decision. The

warehouse, which covered an area of some 1,900 sq ft, had been disused for some time, and had been damaged by fire. Underneath the upper part of the

warehouse, and extending over the whole area, there were cellars below ground level which were ceiled at ground level by a wooden floor. These cellars were

some 9ft in height. When the negotiations began some two-thirds of this height was filled with rubbish consisting chiefly of bags of cement which had gone

hard, and of empty drums. It was all valueless and, in the words of the county court judge, “its presence prevented the use of the cellars for any purpose.”

During the negotiations the appellant undertook to remove the rubbish, but no attempt is made to base a cause of action on that undertaking. Some of the

rubbish was in fact removed, but the greater part of it was left behind, amounting to a “considerable” quantity, so much as “effectively to preclude the user of

the property by the purchasers [respondents] in the way and for the purposes they intended.” We are not clear as to what force, if any, the county court judge

intended to give to this reference to intended user. Before 􀂭 285􀀉 the partial removal no user of the cellars was possible. The only evidence as to what was

removed appears to have been that of one Baum, who said that some drums only were removed, leaving 200 drums, and that none of the other material was

removed. We can find nothing in the evidence to suggest that this limited amount of removal to any substantial extent improved the previous position as far as

non-usability was concerned, nor do we think that the judge’s reference to intended user is to be construed as meaning that the cellars had been made usable

for any purpose by reason of the removal of some of the drums.

The appellant having refused to remove the rest of the rubbish, the respondents had it removed at a cost of £80 0s 7d. It was not argued before us that the

respondents by accepting a conveyance had waived the alleged breach of the undertaking to give vacant possession.

One argument put forward by counsel for the appellant can be disposed of at once. It was to the effect that the purchaser could not complain of the

presence of the rubbish owing to condition 9(3) quoted above. But this condition relates to the “state and condition of the property sold.” The rubbish formed

no part of the property sold and its presence upon the property sold cannot, in our opinion, be said to be covered by the words “state and condition of the

property sold.” Those words refer, in our view, to the physical condition of the property sold itself, such as its state of repair, and do not extend to the case

where the property sold is made in part unusable by reason of the presence upon it of chattels which obstruct the user. Such obstruction does not affect the

“state and condition of the property” but merely its usability, which is a different matter altogether.

The principal argument on behalf of the appellant was of a different character altogether. It was said that the expression “vacant possession” was merely

used in contradistinction to “possession” simpliciter, in order to show that the property was on completion to be transferred free from any claim of right to

possession in the vendor or any third person such as a tenant or a licensee: and that the presence on the premises of chattels which had been abandoned by the

vendor did not constitute or evidence any such claim or right. It was admitted that the rubbish belonged to the appellant at the date of the contract, and that he

could have removed it before completion. It was said, however, that he had abandoned the rubbish, and had accordingly reserved no right to keep it on the

premises or to enter on the premises after completion in order to remove it. When asked as to the date when the abandonment took place, his counsel replied

that it took place at the moment of completion.

In considering this argument it is important to bear in mind the duties of a vendor pending completion. His position is that of a quasi-trustee for the

purchaser. As was said in Lysaght v Edwards, by Sir George Jessel MR ((1876), 2 ChD 499, at p 507):

‘He is not entitled to treat the estate as his own. If he wilfully damages or injures it, he is liable to the purchaser; and more than that, he is liable if

he does not take reasonable care of it.’

An action for damages for breach of these obligations can be brought after conveyance (Clarke v Ramuz, at any rate in the absence of waiver. A vendor who,

between contract and conveyance, deposited on the property old rubbish of his own which he desired to abandon would clearly commit a breach of his

obligations if the presence of the rubbish caused a substantial detriment to the property. In the present case the rubbish was on the property at the date of the

contract, and was not deposited subsequently, as in the example given. But at the date of the contract the rubbish still belonged to the vendor since admittedly

no abandonment had taken place. By abandoning his property in the rubbish he did something in relation to the land which was detrimental to the land. He

converted a quantity of rubbish belonging to himself which was removable by him into a permanent source of damage. By the very act of abandonment he

changed the whole situation, and in effect at that moment converted the land into a dump for his rubbish. In these circumstances, there being no waiver or

consent by the purchaser, we are of opinion that an action would have lain for damages for breach of trust, and that the measure of damages would have been

the same as that awarded by the judgment under appeal.

􀂭 286􀀉

But it is said that the cause of action is not breach of trust, but breach of the contract to give vacant possession. This is no doubt true, although we should

be averse to dealing with this appeal on what is no more than a point of pleading. But even if full weight is given to the objection, we do not think that it ought

to be allowed to assist the appellant for this reason. If there had been no abandonment, and the property in the rubbish had remained in the vendor after

completion, there would, in our opinion, have been a breach of the undertaking to give vacant possession. Subject to the rule de minimis, a vendor who leaves

property of his own on the premises on completion cannot, in our opinion, be said to give vacant possession, since by doing so he is claiming a right to use the

premises for his own purposes, sc, as a place of deposit for his own goods inconsistent with the right which the purchaser has on completion to undisturbed

enjoyment. Counsel for the appellant endeavoured to escape from this difficulty be relying on the abandonment which he said necessarily negatived and such

claim by the appellant; once he abandoned the rubbish it could not be said that he was using the property as a place for deposit for his chattels, since ex

hypothesi the rubbish was no longer his. But if we are right in our view that by abandoning the rubbish the appellant committed a breach of trust, can he be

allowed to allege his own breach of trust as a defence to the present action? To allow him to do so would lead to serious injustice, and in our opinion, he is

precluded from raising this point. In fact he is in a dilemma; for he must be claiming the right either to keep property of his own on the premises, or to use the

premises as a place on which to deposit rubbish which he desires to abandon. In either case his action is inconsistent with the respondents’ rights.

But there is, we think, a quite different ground upon which the judgment under appeal can be supported. The phrase “vacant possession” is no doubt

generally used in order to make it clear that what is being sold is not an interest in a reversion. But it is not confined to this. Occupation by a person having

All England Law Reports 1936 - books on screen™

All ER 1946 Volume 1

Preamble

no claim of right prevents the giving of “vacant possession,” and it is the duty of the vendor to eject such a person before completion: see Royal Bristol

Permanent Society v Bomash, and Engell v Fitch. The reason for this, it appears to us, is that the right to actual unimpeded physical enjoyment is comprised in

the right to vacant possession. We cannot see why the existence of a physical impediment to such enjoyment to which the purchaser does not expressly or

impliedly consent to submit should stand in a different position to an impediment caused by the presence of a trespasser. It is true that in each case the

purchaser obtains the right to possession in law, notwithstanding the presence of the impediment. But it appears to us that what he bargains for is not merely

the right in law, but the power in fact to exercise the right. When we speak of a physical impediment we do not mean that any physical impediment will do. It

must be an impediment which substantially prevents or interferes with the enjoyment of the right of possession of a substantial part of the property. Such

cases will be rare, and can only arise in exceptional circumstances, and there would normally be (what there is not here) waiver or acceptance of the position

by the purchaser. The facts as found by the county court judge are of a very exceptional nature, since the presence of the rubbish which the purchaser never

bought and to whose presence he never submitted did in fact make it impossible for him to use a substantial part of the property which he had bought.

The appeal must be dismissed with costs.

Appeal dismissed with costs.

Solicitors: Gregory, Rowcliffe & Co agents for Howson, Dickinson & Mason, Whitehaven (for the appellant); W C Crocker agent for W C Sumner,

Whitehaven (for the respondents).

F Guttman Esq Barrister.

􀂭 287􀀉

[1946] 1 All ER 288