Johnson v Humphrey
LAND; Sale of Land
CHANCERY DIVISION
ROXBURGH J
18, 19 FEBRUARY 1946
Sale of Land – Memorandum of contract – Terms – Balance of purchase money “to be paid immediately on possession” – When possession to be given not
stated – Verbal agreement that possession should be given only when vendor had found other accommodation – Insufficiency of memorandum – No
enforceable contract – Law of Property Act, 1925 (c 20), s 40.
On 9 November 1944, H entered into an oral agreement with J to sell her house to him for £750, on the understanding that she would not give vacant
possession until she had made some other suitable arrangement for herself. On 10 November, J gave £20 to H as a deposit on account of the purchase money,
and made her sign a document stating that she thereby agreed to sell her house to J for the sum of £750, for which he had paid a deposit of £20, “the balance to
be paid immediately on possession.” On 25 November H wrote to J, saying that she was unable to proceed with the sale and was therefore returning the £20.
In an action brought by J for specific performance of the contract of sale, it was contended on his behalf that the document of 10 November was a sufficient
memorandum within the meaning of the Law of Property Act, 1925, s 40. It was further contended that there was an implied term in the agreement that
possession was to be given and completion was to take place within a reasonable time of the making of the agreement:—
Held – (i) since the document signed by H, on 10 November did not say when possession was to be given, which was a term of the contract made on 9
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November it omitted a material term of the contract and therefore it was not a memorandum sufficient to comply with the Law of Property Act, 1925, s 40.
(ii) the ordinary principle of construction that, where no date was fixed for completion, completion was to take place in a reasonable time, and that vacant
possession should be given on completion, could not be applied, because the document contained an express term that completion was to be determined by
reference to possession. Moreover, where completion was made referable to possession, and nothing was said as to when possession was to be given, the court
would not imply any term as to when possession should be given. Therefore, even assuming that the memorandum contained all the material terms of the
contract, the contract was nevertheless unenforceable because it contained no provision as to the date for completion.
Notes
It is argued as a subsidiary point in this case that where an agreement for the sale of land provides for the payment of the balance of the purchase money on
completion, completion being made referable to possession at a time unstated, then completion must take place and possession be given in a reasonable time.
This argument the court rejects, because in fact the document expressly provided that completion was to take place on possession being given and the
document was silent on that point.
As to Sufficiency of Memorandum, see Halsbury, Hailsham Edn, Vol 7, pp 120, 121, paras 170, 171; and for Cases, see Digest, Vol 12, pp 148, 149, Nos
1015, 1024.
Action
Action for specific performance of a contract for the sale of land. The facts are fully set out in the judgment.
Alan S Orr for the plaintiff.
The defendant appeared in person.
19 February 1946. The following judgment was delivered.
ROXBURGH J. The statement of claim as amended reads as follows:
‘By an oral agreement on or about Nov. 9, 1944, the defendant agreed to sell to the plaintiff certain freehold premises being a bungalow known as
“Seabys,” Croft Way, Selsey, in the county of Sussex, for the sum of £750. On Nov. 10, 1944, the plaintiff paid to the defendant the sum of £20 by way
of deposit and in part payment of the said purchase price and on the said date the defendant signed a written record of the said agreement which
constitutes a note or memorandum of the said agreement to satisfy the Law of Property Act, 1925, s. 40. By the said memorandum it was agreed that
the balance of said purchase price should be paid immediately on possession of the said hereditament being given by the defendant. It was an implied
term of the said agreement that the said sale should be completed within a reasonable time of the making of the said agreement. By a letter dated Nov.
25, 1944, the defendant repudiated the said agreement and refused to proceed with the said sale and the defendant has returned to the plaintiff the said
sum of £20. The plaintiff claims specific performance [and certain other relief].’
ô€‚ 460ô€€‰
There is no doubt that by letter dated 25 November 1944, the defendant did repudiate the agreement, if any, and did refuse to proceed with the said sale
and did return the said sum of £20. Therefore, the issues which I have to determine are as follows: (i) whether there was an oral agreement on or about 9
November 1944, and, if so, what were the terms of that oral agreement; (ii) whether those terms were embodied in the document which was undoubtedly
signed by the defendant, which is alleged to constitute the note or memorandum; and (iii) if the oral agreement is truly recorded in the memorandum, what the
memorandum itself means.
On 9 November 1944, the plaintiff, having heard that the defendant might be prepared to sell her bungalow, called upon her and inquired whether she
would sell it to him. He said something to the effect that she would be prepared to sell it if she could find somewhere else to go to, and it was against that
background that the negotiations took place. There was a discussion about the price. The plaintiff offered her £750 and she accepted that offer. There was a
discussion as to when she could give vacant possession, and she said—I have this from the plaintiff himself—that she would give vacant possession as soon as
she could find somewhere to go, and if she could not find the place she wanted, she was prepared to store her furniture and go into either a hotel or a boarding
house. Then the plaintiff offered her a deposit. She showed some reluctance, whereupon he said it was a matter of business, and he then left. Shortly
afterwards he returned with his wife. In the course of that visit the defendant told Mrs Johnson that she would do her best to get out by Christmas, and if she
could not find a place she would try to go to a hotel and store her furniture. At the close of that interview the plaintiff said that he would bring the deposit and
an agreement on the following morning.
On the next day, the plaintiff returned accompanied by his son. The plaintiff had in his own home prepared a document which he took with him together
with a sum of £20. It was a very small deposit for a purchase at £750, but the plaintiff explained to me, quite frankly, that he was anxious to have something
binding upon the defendant. He took this document, together with the £20, and he placed both of them in front of the defendant. The defendant having read
the document, signed it. It is in these terms:
‘Nov. 10, 1944. I hereby agree to sell my bungalow, “Seabys,” Croft Way, Selsey, to Mr. E. G. Johnson, Jeweller, High Street, Selsey, for the
agreed sum of £750 [the amount is then written out in words] and for which he has paid a deposit of £20, the balance to be paid immediately on
possession.’
It is signed “C B Humphrey.”
There was no suggestion by the plaintiff, and there is no suggestion in the pleadings, that the contract was made on 10 November. Both in the evidence
and in the pleadings it was said that the contract was made on 9 November and this document, according to the plaintiff’s case, was intended to be a record of
the contract which should bind the defendant.
On 16 November 1944, the plaintiff’s solicitors wrote the following letter to the defendant:
‘Re “Seabys,” Croft Way, Selsey. We are acting for Mr. E. G. Johnson in his purchase from you of the above property for the sum of £750 of which
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he has paid to you a deposit of £20 on account of such purchase money, and we understand vacant possession of the property is to be given on
completion of the sale. We shall be glad if you will put us in touch with your solicitors in order that we may obtain the draft contract from them. If you
have no regular solicitor, and would like us to act for you in the matter as well, we shall be happy to do so.’
It will be observed that the letter is far from suggesting that the defendant had already bound herself by a contract; on the contrary, the purchaser’s solicitors
are offering their services to her for the preparation of a contract. I accept the evidence that the memorandum was not in the possession of the plaintiff’s
solicitors when the letter of 16 November was written. It, therefore, comes to this, that the solicitors wrote that letter without any inquiry as to what the true
position was.
It is very noticeable how quick the defendant was to take up the statement in the letter:
‘We understand vacant possession of the property is to be given on completion of the sale.’
ô€‚ 461ô€€‰
She replied:
‘I thank you for yours received this morning, and in reply beg first to correct the statement to the effect that vacant possession of the property, as
address above, on completion of the sale was the arrangement I made with Mr. E. G. Johnson. I was not anxious to sell just now with the scarcity of
houses vacant or available, and my condition of selling was that I would do so when I could make other suitable arrangements for myself and furniture.
I did not ask for a deposit, and declined it, but Mr. Johnson came the next day with £20 deposit, and I signed his written statement that the balance of the
purchase money would be received by me from him on the complete possession being given. If this does not suit Mr. Johnson’s requirements I will
immediately return the deposit money to him, more especially as in answer to all my inquiries I have had no glimmer of success for suitable
accommodation … I thank you also for your offer of legal assistance … ’
On 20 November the plaintiff’s solicitors wrote:
‘We thank you for your letter of Nov. 17. We will see Mr. Johnson upon it and take his instructions and write you again.’
On 25 November Miss Humphrey wrote to Johnson the letter to which I have already referred as being the letter of repudiation. She said:
‘Owing to the present very difficult circumstances and to a sudden breakdown in my health, I am unable to proceed with the sale of the above
property. I am, therefore, inclosing my cheque for £20, the amount deposited on account by you on Nov. 10 …’
The letter was clearly a repudiation, if there was a contract.
The answer is this:
‘Mr. E. G. Johnson has handed to us your letter of Nov. 25, with accompanying cheque … It is clear to us that the memorandum signed by you
under date Nov. 10, 1944, evidences a binding contract between you and Mr. Johnson for the sale of the property for £750 and to this agreement Mr.
Johnson is compelled to hold you. He asks us to point out that in consequence of your agreement to sell him this present property, his son has sold the
house in which he now lives and is required to give possession. In any case there is a binding contract and our client is entitled to require you to
perform the same and he does so require you to do. Will you therefore please instruct your solicitors to furnish us with abstract of title in order that the
matter may proceed. We return your cheque for £20.’
The money was ultimately sent back.
I am quite satisfied that one of the terms to which the plaintiff and the defendant agreed on 9 November was that vacant possession should not be given
until the defendant could make other suitable arrangements for herself and her furniture. Undoubtedly there was some discussion by way of modification of
that agreed term. There is no doubt that the defendant said that she would try to get out by Christmas and that if she did not succeed in finding what she
wanted she would try to go into apartments and store her furniture. Upon the whole, I think that the modifications of the stipulation never reached any degree
of finality or certainty, ie, I do not think it was ever agreed for how long the defendant was to look for suitable accommodation before she was to move into
apartments and store her furniture; nor do I think exactly what she was to do was ever finally determined. But that the stipulation was made, and insisted
upon, that she was not to give vacant possession until she had made some suitable arrangements for herself and her furniture, is to my mind established beyond
all doubt. I do not think there is any conflict of evidence on the point.
If there was a term agreed to by both parties on 9 November that the lady should give vacant possession when she could make other suitable
arrangements for herself and her furniture, the memorandum does not contain all the terms of the bargain because it does not contain that term. It leaves the
matter as a big query. It says:
‘… the balance [i.e., the balance of the purchase money] to be paid immediately on possession.’
But it does not say when possession is to be given: therefore, plainly it does not include all the terms of the bargain, if I am right in holding, as I do hold, that
one of the terms related to the giving of vacant possession. Nor do I think it matters precisely what that term was and whether or not it was too vague to be
enforceable. If the term was too vague to be enforceable in a court ô€‚ 462ô€€‰ of law, it would only mean that there was no contract, and, therefore, there could
be no memorandum of it. Therefore, in my judgment, once I reach the conclusion, which I do, that there was a term about vacant possession agreed to on 9
November the memorandum signed by the defendant on 10 November cannot be a memorandum sufficient to comply with the Law of Property Act, 1925, s
40, because it omits a material term of the bargain.
But, even if I am wrong in this conclusion and if, contrary to my judgment, all the material terms are embodied in the memorandum, then in my judgment
the contract is unenforceable because it omits to deal with the vital question as to when possession is to be given. It is pleaded in this way:
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‘It was an implied term of the said agreement that the said sale should be completed within a reasonable time of the making of the said agreement.’
Plainly it was not, because there was an express term about completion and, therefore, there cannot be any implied term about completion. There is an express
term about completion because it is said:
‘… the balance to be paid immediately on possession.’
I would not wish to dispose of that point on that very narrow ground because, if that had been all, I should have given leave to amend. What counsel for
the plaintiff really says is that there is an implied term that possession is to be given within a reasonable time of the making of the said agreement.
As regards that proposition, I desire to say this. It is, of course, well understood that, if a contract fixes no date for completion, the law implies that
completion is to take place within a reasonable time. What is a reasonable time has to be measured by the legal business which has to be performed in
connection with the investigation of the title and the preparation of the necessary conveyancing documents. It is also an implied term of a contract of the sale
of land that vacant possession shall be given on completion, but here possession cannot be fixed by reference to completion because, by the express terms of
the document itself, completion is to be determined by reference to possession. Therefore, the ordinary principles of construction clearly are inapplicable to
the present case. Counsel for the plaintiff argued that in a case such as this, the direction that the balance is to be paid immediately on possession ought to be
construed as meaning that possession is to be given, and completion is to take place, within a reasonable time. I do not know any case in which the court has
construed a stipulation about possession in that manner, and counsel for the plaintiff has not referred me to any. If the reasonableness of the time is to be
measured by such considerations as the difficulty of obtaining accommodation in the post-war world, I doubt whether the court would proceed to any such
investigation. I should not be prepared to hold that in a contract of this sort, where completion is made referable to possession and nothing is said as to when
possession is to be given, the court will imply any term whatever as to when possession should be given.
Accordingly, in my judgment the plaintiff has failed to prove an enforceable contract, and the action must be dismissed with costs.
Judgment for the defendant with costs.
Solicitors: Kenneth Brown, Baker, Baker agents for Wannop & Falconer, Chichester (for the plaintiff).
B Ashkenazi Esq Barrister.
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[1946] 1 All ER 464
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