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Allahabad High Court · body

1935 DIGILAW 43 (ALL)

Harold Wood Brick Company v. Ferris

1935-01-24

SWIFT

body1935
JUDGMENT Swift, J. - (After stating the facts as mentioned above proceeds).--The liquidator of the Plaintiff company does not seem to have been in any way harsh or oppressive towards the Defendant, but when the date for the completion had gone by, on November 13, 1933, the liquidator's solicitors wrote saying: In view of the fact that you have not completed the purchase in accordance with the contract. 2. Those words were to my mind a quite clear intimation to the Defendant that the delay which had taken place in providing the purchase-money amounted to a repudiation, to a breach of the contract which he had made, and the letter stated what the consequences of that were going to be: Our clients instruct us to give you notice that they rescind the contract, and are proceeding to sell the property by tender. They will hold you responsible in damages for any loss occasioned to them by your breach of the agreement. 3. I do not think that letter can be read in any other way than as a statement: You have broken the contract, and under the terms of Clause 16 we consider it is wiped out or erased from the Land Registry, or wherever it might be a blot or clot upon the title, and we intend to sue you at once only for damages for the breach of which you have been guilty. 4. Not receiving any damages, or further negotiations not resulting in any fresh bargain, the Plaintiffs issued their writ in this case in which they merely claim damages for breach of the agreement of August 15, 1933. They might, I suppose, have sued in another division for specific performance of the contract; whether they could or whether they could not does not seem to me to matter. At common law, in my view, they were right in bringing an action merely for damages for breach of the agreement to purchase the land. The damages are agreed. They might, I suppose, have sued in another division for specific performance of the contract; whether they could or whether they could not does not seem to me to matter. At common law, in my view, they were right in bringing an action merely for damages for breach of the agreement to purchase the land. The damages are agreed. There is no dispute that in law such an action would lie, and the case raises purely a point of law as to whether or not, in the admitted state of the facts which are disclosed by the agreement and by the correspondence and about which there is no difference of opinion between the contending parties, the Plaintiffs are entitled to damages for breach of contract having regard to the terms of the particular agreement of August 15, 1933. 5. It is said on behalf of the Defendant that having regard to the terms of Clause 16 an action for damages at common law will not lie. Clause 16 provides: Should the purchaser fail to complete the said purchase in accordance with this agreement any deposit paid by the purchaser shall be forfeited to the vendore who may rescind the same and re-sell the property either by public auction be private contract subject to such stipulations" as they might think fit. 6. Counsel for the Defendant contends that the vendors have said: We are going to rescind the contract because of your breach or repudiation; we are going to re-sell and that they are limited merely to their right to re-sell, and are not entitled to damages for breach of the agreement. I am unable to take that view of the rights for the parties. In support of it two cases were cited. The first is Henty v. Schroder (1879) 12 Ch. I am unable to take that view of the rights for the parties. In support of it two cases were cited. The first is Henty v. Schroder (1879) 12 Ch. D. 666, which was decided in 1879, in which the headnote is as follows: After a decree for specific performance of an agreement against a purchaser who was unable to complete-on emotion by the Plaintiffs that the agreement might be rescinded, and all farther proceedings in the action stayed except as to any application which might be made to the Court to award and assess the damages which the Plaintiffs had sustained by the breach of the agreement: Held, that the Plaintiffs were only entitled to have the agreement rescinded, and could not at the same time claim damages for its breach. 7. Counsel for the Defendant contended that that was an authority for saying that where an agreement was rescinded no action for damages would lie; indeed that no claim for damages could arise. 8. The second case cited was Hulchings v. Humphreys (1885) 51 L.J. Ch. 650, decided in 1885, and the headnote in that case is: After a decree for specific performance of a contract which the party against whom the decree has been made is unable or neglects to carry into effect, the party in whoso favour the decree was made is entitled to an order for rescission of the contract, retaining the benefit of any direction as to costs of the action, but not to damages or to occupation rent. Fie is also entitled to costs of obtaining the order for rescission. 9. I do not think that the effect of those two cases is that which was contended for by the Defendant. It does not seem to me that there is to be found anywhere a statement of law to the effect that where specific performance of a contract is ordered, and that order is not obeyed, there can the no claim for damages, but only a right to have the contract rescinded. It seems to me that all those cases amount to is that it is not appropriate, or was not appropriate in the years they were decided, in the Chancery Division, to put into one order,' an order rescinding the contract and an order providing for the assessment of damages for breach of contract. It seems to me that all those cases amount to is that it is not appropriate, or was not appropriate in the years they were decided, in the Chancery Division, to put into one order,' an order rescinding the contract and an order providing for the assessment of damages for breach of contract. I certainly cannot find anything which takes away the common law right laid down so clearly in Laird v. Pirn that, on the failure of the purchaser to complete, the vendor is entitled to damages for breach of contract. This right was recognised so lately as 1925 in the case of York Glass Company v. Jubb, by the Court of Appeal, which considering as the main point in the case the position of a lunatic who had contracted and who had repudiated, assumed and never questioned the right of the vendor to recover damages for breach of contract for the sale of land. The Master of the Rolls said (134 L.T. at p. 40): This is really a simple case in which we have to apply the old rule of common law as to damages, which is: 'Where a party sustains a loss by reason of a breach of contract; he is, so far as money can do it, to be placed in the same situation with respect to damages as if the contract had been performed.' There is abundant authority for that statement of the law. I am reading a passage from Parke, B., in Robinson v. Harman (18 L.J. Ex. , at p, 204; 1 Ex. , at p. 885). Those damages are not confined to the actual margin between the sum realised and the contract price; there may be incidental expenses which have necessarily flowed from the breach of contract, and if those are to be taken into account the damages may be enhanced by an amount which will recompense the party who has suffered for the expenses which the breach of contract has entailed upon him. All those considerations have been before Lawrence, J. fie has applied his mind to the evidence before him, and he has come to the conclusion that a sum of 21,000 pounds is the right amount. I am not disposed at all to differ from him. 10. All those considerations have been before Lawrence, J. fie has applied his mind to the evidence before him, and he has come to the conclusion that a sum of 21,000 pounds is the right amount. I am not disposed at all to differ from him. 10. In this cake I am relieved of the burden which was imposed upon Lawrence, J., in the case which 1 have just read. Here the parties have agreed that if there should be and there is any liability in law on the Defendant to the Plaintiffs the amount of the damages is 4,990 pounds. I am satisfied here that there is no answer in law to the Plaintiffs' claim. The Defendant repudiated his contract, and the Plaintiffs accepted that repudiation. They said: "That contract no longer exists and now we want damages because you have broken it." In my opinion they are entitled to those damages, and I give judgment for them for the agreed amount with costs.