Hedworth v Jenwise Ltd

Agreement to purchase freehold property — Purchaser failing to comply with notice to complete — Vendor terminating contract — Action by purchaser for relief from forfeiture of contract and specific performance — High Court allowing application by vendor to strike out action — Court of Appeal dismissing appealOn March 13 1989 a sale agreement was made by the defendant (as vendor) to the plaintiff (as purchaser) of a freehold property Elderbeck, Houghton Road, Pooley Bridge, Cumbria. The property comprised 35.39 acres including a small frontage to Ullswater. The purchase price was £550,000 with deferred completion. The contractual completion date was December 15 1989. Special condition (e) provided that the abstract of title should begin with a conveyance of sale made on February 15 1951, but in respect of the small strip fronting the lake (which was not included in the paper title) “the vendor will provide a statutory declaration…evidencing a good possessory title”. The completion date passed because the purchaser was unable to complete. There were a series of extensions subject to the purchaser paying sums in compensation to the vendor. These all passed because the purchaser was unable to complete and on September 13 1990 the vendor terminated the contract. The purchaser attempted to reinstate the contract. He then registered an estate contract and started legal proceedings seeking relief from forfeiture of the contract to allow specific performance. The vendor applied successfully to strike out the action. The purchaser appealed. Held The appeal was dismissed. 1. In English law the equitable doctrine of relief against forfeiture did not extend to granting relief by way of an order for specific performance of a contract where the person seeking relief was in default in performing an essential term of the contract: see Steedman v Drinkle [1916] 1 AC 275. 2. In the Australian case of Legione v Hateley [1983] 4 6 ALR 1, a strong High Court refused to follow Steedman and held that there was no principle preventing the court granting relief against forfeiture and specific performance to a purchaser who was in breach of an essential condition, although such relief would be exceptional. 3. Assuming for the purposes of this case (though not deciding the point) that the principle in the Australian case was applicable in the English jurisdiction, on no view of the facts could it properly be said that the present case fell within that principle. The circumstances in the Legione case were exceptional in that it was not simply the land which was being forfeited, but with it a house which the purchasers had erected upon it after taking possession before completion. There were no such circumstances in the present case, which was a simple case of termination for noncompliance. 4. A purchaser had a lien analogous to a vendor’s lien on property in the hands of the vendor for the deposit paid under a contract, but if the contract went off through the purchaser’s default that lien went away. In this case the failure to comply with a notice to complete was a default by the purchaser. 5. An order vacating a caution or an estate contract could and ought to be made on motion if there was no fair arguable case in support of the registration which ought to go to trial. In that respect a certain robustness of approach was permissible and adopting that test, on the present facts, it was appropriate to vacate the estate contract: see Alpenstow Ltd v Regalian Properties [1985] 1 EGLR 164. The appellant purchaser appeared in person; Elizabeth Weaver (instructed by Cartmel Shepherd, of Carlisle) appeared for the vendor.