IN THE HIGH COURT
CHANCERY DIVISON
HIS HONOUR JOHN JARVIS QC (SITTING AS A DEPUTY JUDGE OF THE CHANCERY DIVISION)
3rd October 2000
Between:
-and-
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M King
(Druces & Attlee) for the Claimant
M Zaman (Irwin Mitchell, Birmingham) for the Defendant
H Marten (Wortley Redmayne Kershaw, Chelmsford) for the Part 20 Defendant
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First, this is an appeal against the order of Master Bragge given on 4 April 2000 when he gave summary judgment against the defendant Alspath Properties Ltd. ("Alspath") in favour of the claimants, Anthony Harry Ratcliffe and Malcolm Oliver Brown, who have sued as the trustees of the Carolgate Friendly Society ("Carolgate"). Second, there is an application by Alspath as a Pt 20 claimant for summary judgment against the Pt 20 defendant, Chelmsford Star Cooperative Society ("Chelmsford").
The Master's order was a declaration that the claimants have no obligation under clause 4.2 of the agreement dated 9 November 1995 made between Alspath of the first part, the claimants of the second part, and Beewise of the third part, to pay the sum of £50,000 to Alspath. The parties have agreed that I should hear both these applications together, which I have done. Beewise was the tenant in relation to the land which is the subject matter of the issue between the parties.
On 9 November 1995 Alspath as vendor agreed to sell to Carolgate as purchaser the property at 13 to 15 Bank Street, Braintree, Essex ("the property"). The purchase price was £675,000. As I have indicated, Beewise was to be the tenant of those premises. The property was to be used as a shopping centre. By an agreement of the same date Alspath had agreed to purchase the property from Chelmsford for the price of £487,500. For the purposes of this case it is agreed that the agreements are in identical terms save as to the difference in price in each of these sales.
This case is concerned with the construction of clause 4.2 of the sale agreement in each agreement. Clause 4.2 provides:
If by the completion date the vendor has not obtained deeds from Shah & City Developments Ltd. granting rights of way and loading and unloading over the yard and access road leading from Rain Road to the rear of the property in substantially the form of the two draft deeds referred to in and exhibited to the draft agreement annexed hereto, then the purchaser shall be entitled to retain the sum of £50,000 out of the purchase price until such time as the said deeds are completed. On completion of the said deeds the purchaser shall forthwith pay the said sum of £50,000 to the vendor or to whom it may direct. If the said deed shall not be completed within three years of the completion date, this provision shall lapse and the purchaser shall have no obligation to pay the said sum of £50,000 to the vendor.
I also need to refer to clause 4.3 which provides:
The purchaser shall use all reasonable endeavours to obtain the said deeds and shall be entitled to deduct from the said retention any expenses properly incurred in connection with the said deeds whether by way of premium costs or otherwise.
On 30 November 1998 a deed of grant between Braintree District Council and Carolgate was executed by the Council and this purported to grant some of the easements contemplated in the first draft deed which were referred to in clause 4.2. The first draft deed provided for certain rights of way and for the rights of vehicles to have access and to load and unload. The second draft deed provided for rights of repair and maintenance and they were to be over the servient land which on the plan in the bundle at p 82 is edged in red. For the sake of completeness I should point out that the conveyed land is shown on the plan and is edged in purple.
The issues before me have turned on whether the deed of grant dated 30 November 1998 was a fulfilment of clause 4.2 thus entitling Alspath and therefore in turn Chelmsford to be paid the £50,000 pursuant to clause 4.2.
Mr Marten, who represents Chelmsford, submits that in construing clause 4.2 I must look at the factual matrix, and he has referred me to the well known speech of Lord Wilberforce in Prenn v. Simmonds [1971] 1 WLR 1381 at pp 1383H to 1384C. Mr Marten urges me to say that in this case in construing the words of clause 4.2 I must not take the words literally but must look at the circumstances in which the words were used and the object appearing from those circumstances. Of course I accept that submission. Mr Marten develops that submission by saying that the facts before me in this case are insufficient and are so skeletal that I cannot properly construe clause 4.2 and that this by itself therefore is a good reason why this is not a fit case for summary trial. He says that evidence must be led to show what the negotiations were and what were the real objects of the parties so as to ascertain whether or not there has been substantial performance.
There is, in my view, ample evidence before me to show what the objects of the parties were. It seems to me quite unnecessary for there to be further evidence when one is dealing with a conveyancing matter such as this. The documents really speak for themselves. Here was a piece of land which was to be used as a shopping centre and clearly there was to be provision to enable lorries to deliver to that shopping centre and to load and unload at the rear and to be able to turn. The green land was to provide for a right of way on foot together with, or without, trolleys, and that was plainly to enable customers of the shopping centre to use that right of way. These were commercial requirements of the eventual purchaser, Carolgate.
In any event, it seems to me that for a defendant to summary judgment to say that more evidence is necessary is not an easy submission for such a defendant. This defendant, although faced with the actual hearing of this matter at relatively short notice, had had ample opportunity to put in full and adequate witness statements. It availed itself of that opportunity with two full witness statements. It seems to me that it is a matter for the defendant in these circumstances to put before the court the evidence which it says would assist in the construction of the agreement.
I therefore reject the first submission of Mr Marten that this case should go to trial because the evidence is insufficient to enable me to construe the agreement.
Mr Marten then submits that the proper construction of clause 4.2 is that the words that must be looked at are the whole of the first sentence and that the deeds that were to be provided were to be the grants of way and loading and unloading and the access road to the rear of the property, and that what I should do is to see whether the provision of those rights was substantially made, or not, by reference to the deed that was provided on 30 November 1998. The competing submission is that clause 4.2 is a carefully drawn clause which identifies precisely the form of those covenants. In my judgment, clause 4.2 emphasises that the deeds which are to be provided are to be substantially in the form of those that are exhibited to the sale agreement. It is substantial compliance with the form of the exhibited draft deeds which is the prerequisite of clause 4.2. I do not consider that "substantially" in these circumstances refers to some kind of performance by means of some alternative route of the rights of way of loading and unloading.
So the question is whether or not the deed that was provided on 30 November 1998 fell short of compliance with clause 4.2. It is quite plain and accepted by Mr Marten that there were parcels of land which were not capable of being made the subject of the deeds. Those parcels are shown in the plan at p 393 in the bundle and it shows that over part of the servient land a small triangle of land which was to be land used for goods vehicles could not be made subject to the grant. It also shows that an area of land which was to have been used for the right of way on foot, with or without trolleys, could also not be conveyed. Also there are two areas which on the original plan were marked in yellow and were for the rights of goods vehicles not exceeding 30 hundredweight. Those areas were also incapable of being transferred. They were incapable of being transferred because at that stage compulsory purchase orders had not been completed so as to bring all these parcels of land into the ownership of Shah & City Developments Ltd.
In my judgment, there was a clear failure to provide all of the area of land which was to be subject to the deed of grant.
Second, and this is again accepted by Mr Marten, there was no actual grant of the rights required by the second deed, namely the rights of repair and maintenance. It cannot be said that they were fanciful rights because of course although such rights are available under the Neighbouring Land Act 1992, there is a process which has to be gone through to utilise those. Plainly to be given rights by deed is far more beneficial to a purchaser than relying on its statutory rights.
Accordingly, in my judgment, the deed of 30 November 1998 was not in substantially the form of the two draft deeds. Indeed, it fell way below any threshold of satisfaction of that clause.
However, Mr Marten submits that it is impossible for the claimants to rely on this because under clause 4.3 it was the obligation of the purchasers to use their best endeavours to procure the grants of the deeds. He says there is nothing to suggest that the claimants did anything at all and that they should therefore be barred from relying on their own breach. First, I am not satisfied in any way that that submission is factually made out. There is clear correspondence in the bundle showing that the solicitors for the claimants were asking for the deeds and had been doing so, I am told by Mr King, for some time. The claimants were to that extent of course at the mercy of the vendors and they obviously had to do what they could, but it seems to me that there is no threshold of evidence shown by Chelmsford that the claimant was in breach of that clause. In any event it would not, in my judgment, be a defence in any way to this matter to say that there had been a breach. The most that could arise would be some claim for damages which is totally unspecified and unparticularised at this point of time.
At one stage it had been asserted by Chelmsford that this was a contract which had been substantially performed and that it was entitled to payment. Mr Marten this morning has abandoned that argument but he advances an argument based on unjust enrichment. He invited me to consider the principles of unjust enrichment as set out in the fifth edition of The Law of Restitution by Goff & Jones. The final analysis of these rules is perhaps best summarised by the words of Lord Browne-Wilkinson in the case of Woolwich Equitable Building Society v. Inland Revenue Commissioners [1993] AC 70 at pp 196-197:
Although as yet there is in English law no general rule giving the plaintiff a right of recovery from a defendant who has been unjustly enriched at the plaintiff's expense, the concept of unjust enrichment lies at the heart of all the individual instances in which the law does give a right of recovery.
In short, what Mr Marten submitted was that the claimant here has received the benefit of these covenants in the deed of 30 November. They are of value and advantage to the claimants. Therefore if the claimants do not have to pay for that benefit, they have been unjustly enriched. He submits that it would be unconscionable to allow them to retain that benefit.
In my judgment, that is not a sustainable submission in these circumstances. The doctrine of unjust enrichment does not embrace some general doctrine of unconscionability. In short, this was a commercial contract negotiated between businessmen who are to be expected to be able to look after their own interests. Unconscionability has no place where one party makes a good bargain at the expense of the other in such circumstances. Here clause 4.2 provided that the deeds had to be provided substantially in the form of the drafts and if there was non-compliance within three years of the completion date then the purchaser should have no obligation to pay the £50,000 to the vendor. That is a contractual provision and, in my judgment, the failure to comply with that contractual provision is the end of the case. There is no scope for the court to allow some locus poenitentiae for a defaulting contracting party in these circumstances.
Accordingly, in my judgment, the claim for summary judgment by the claimant against the defendant was rightly given by Master Bragge, the appeal is therefore dismissed, and the Pt 20 claim by Alspath against Chelmsford for summary judgment succeeds. I make the declaration in the same form as the Master against the Pt 20 defendant.
Judgment for the Claimants.