Pathway to Relief & Anor v Shvan Abbas Ali & Anor
[2024] EWHC 1284 (Ch)
IAA Vehicle Services Limited v HBC Limited
5 January 2024
[2024] EWHC 1 (Ch)
High Court
A tenant had the right to buy their landlord's property. They did so but didn't pay a deposit immediately. The landlord said the tenant broke the deal. The judge said the tenant was right, as the specific situation meant they didn't have to pay the deposit right away, and they hadn't broken the deal in any other way. The tenant won, and the landlord has to sell the property.
Key Facts
- •IAA Vehicle Services Limited (Claimant) was a tenant under three commercial leases with an option to purchase the freehold reversion.
- •The Claimant exercised the options on June 7, 2023.
- •The options incorporated standard commercial property conditions requiring a 10% deposit 'no later than the date of the contract'.
- •The Claimant did not pay the deposit on the exercise date.
- •The Defendant, HBC Limited, claimed the Claimant's failure to pay the deposit constituted a repudiatory breach, terminating the contracts.
- •The Claimant argued the deposit wasn't due until the Defendant provided banking details.
Legal Principles
Contractual interpretation uses an objective and contextual approach, prioritizing the words used while considering business common sense and purpose.
The Federal Republic of Nigeria v JP Morgan Chase Bank NA [2019] EWHC 347 (Comm)
In ordinary contracts for sale of land, failure to pay a deposit on time is a repudiatory breach, and time is typically of the essence.
Samarenko v Dawn Hill House Ltd [2011] EWCA Civ 1445
Whether time is of the essence depends on contractual interpretation; a court considers all circumstances.
Samarenko v Dawn Hill House Ltd [2011] EWCA Civ 1445
Repudiatory breach requires a clear intention to abandon the contract; it's not lightly inferred.
Peacock v Imagine Property Developments Ltd [2018] EWHC 1113 (TCC), Eminence Property Developments Ltd v Heaney [2010] EWCA Civ 1168
A party cannot rely on its own wrongdoing to justify non-performance by the other party.
Implicit in the judgment's analysis of the Defendant's failure to provide banking details
Outcomes
The Claimant validly exercised the options.
The options were exercised according to the lease terms; the deposit's non-payment didn't invalidate the exercise.
Time was not of the essence for deposit payment.
The specific context of a tenant's option to purchase a reversion, coupled with the lack of express time-of-the-essence language in the contract, distinguished it from ordinary land sale contracts. The court found that the Claimant's failure to pay the deposit did not amount to a repudiatory breach.
The Claimant's subsequent conduct did not constitute repudiation.
The Claimant's letters didn't unequivocally show an intent to abandon the contract, and the Defendant's failure to provide payment details contributed to the situation. Therefore, the Defendant's assertion that the Claimant's actions constitute repudiation failed.
Order for specific performance granted to the Claimant.
The court found in favor of the Claimant's claim for specific performance given the valid exercise of options, and the lack of any effective repudiation by the Claimant.
Costs awarded to the Claimant.
Costs followed the event, as per agreement at trial and summarized assessment by the Judge.
Similar Cases
The Tropical Zoo Limited v The Mayor and Burgesses of the London Borough of Hounslow
[2024] EWHC 1240 (Ch)
S Franses Limited & Anor v Block 6 Ashley Gardens Roof Gardens Limited & Ors
[2023] EWHC 2880 (Ch)
Moqsud Ahmed Khan v Abdul Malik & Anor
[2023] EWHC 2529 (Ch)
Sheffield City Council v Scotfield Group Limited & Anor.
[2023] EWHC 990 (Ch)