clr/1988/1988_1_285.pdf

(1988)warning that otherwise he would hold them liable for breach of contract and for damages No evidence was adduced as to the exact day of posting of this letterorastothedayitwasreceived However, from the factthatthe twopurchasers' solicitors answered back byletterdated 26 10 82,it can be gathered that the letterwasreceived bythat day 5 In reply to the solicitors' letter, the vendor replied by three separate telegraphs,wherebyhestated, interaha,thatintheeventof continued failure to make default in the payment of outstanding instalments, he would consider the contract as broken by the two 10 purchasers Theinference from suchtelegraphsisthatthevendorregarded the contract asextant Cheques forthe instalmentsweresent,butdue to misunderstanding the funds werenottransferred and,asaresult, the cheques remained unpaid They were not presented for payment On 20 1182 thevendor informed thesolicitorsthatthecontractisat an end by reason of the purchasers' breach, he asserted hisnght to retain the £5,000 and intimated hisintention toresellthe land 15 The purchasers broughtanaction for repudiation ofcontract The vendor counterclaimed £6,140 by way of damages The trial Court 20 dismissed the action and gave judgment on the counterclaim for £5,000 Hence thisapeal Held, allowing the appeal

(1)The ruleisthattimestipulations for the payment of the purchase pnce, including a contract for the sale 2 5 of land, are not of the essence of the agreement unless they are so declared to be for reasons mutually in the contemplation of the contracting parties (TheContract Law,Cap 149,section55).Inthis case time was not of the essence The provision as to interest is suggestive ofthisfact ^"

(2)Apartytoacontractcannotunilaterallyvaryorsupplement the terms of an agreement. He may, however, in the face of improper conduct on the part of the counter-contracting party, give notice of intention torepudiate or withdrawfrom the agreement whereupon, provided the notice is reasonable having regard to all the 35 circumstances, hemayterminatetheagreement after effluxion ofthe timelimitedby the notice

(3)Inthiscase the notice dated 9 1082waswhollyineffective Ir the first place, itwasaddressed toonlytwoofthepurchasers,in the seconditdidnotfurnish theaddresseeswithareasonableforewarning 286 <0 1 C.L.R. Paraskeva & Others v. Lantas The absence of evidence as toposting andthedate of receipt of the letter,isfatal tothecase of therespondent.

(4)Inanyevent,even ifthenoticewas effective, ithasbeenwaived by thetelegraphs of 3.11.82. 5

(5)Hence, the vendor had no right in law to repudiate the agreement. Hisconductandactionamountedtoarepudiationofthe agreement, entitling the purchasers to treat the contract either as rescinded or as broken by the vendor for which he could be held liable indamages for breach of contract. 10

(6)It is not clear what the appellants have done in this case. It appears that they have rescinded the contract.Insuch a case they mustbe restoredtotheirpre-contractposition.Inanyevent,they are entitledtothe£5,000 for totalfailure of considerationoras damages for breach of contract. 15 Appeal allowed withcosts. Judgment for the appellants for£5,000. Casesreferredto: Charalambous v. Vakana

(1982)1C.L.R. 310; 2 0 Jamshed v.Βυήοήί

(1916)431 A. 26; Stickney v. Keeble and Another [1915] A.C. 386; Re Ban's Contract[1956] 2 All E.R. 853; FederalCommerce v. Molena Alpha Inc.& others [1979] 1All E.R. 307; 25 . Woodar Investment v. Wimpey Construction [1980] 1All E.R.571; Horsier&Another v. Zorro [1975] 1All E.R. 584; ChabbraCorp.Pte. Ltd. v.Jag Shakti [1986] 1All E.R. 480; C.R. Taylor(Wholesale) Ltd.&Othersv. Hepworths Ltd. [1977] 2 All E.R. 784. 287 Paraskeva &Othersv. l-antas

(1988)Appeal. Appealbyplaintiffs againstthejudgmentoftheDistrictCourtof Paphos (Anastassiou,S.D.J.)datedthe31stJanuary, 1986(Action No.885/83) whereby theiractionforgeneralandspecialdamages for breach of contract for thesaleof land wasdismissed. 5 Chr. Georghiades, for the appellants. C. Emilianides, for the respondent. MALACHTOS J.: The judgment of the Court willbe delivered byPikisJ. PIKISJ.:Therespondent, ChristakisLantas,soldapieceofland 10 situate at Peyia, Paphos, to theappellants,two Englishmen and a Cypriot.Thelandwasnotregisteredinthenameofthevendorbut he had covenanted tobuy itfrom the owner. Itwasa landdeal on the part of the respondent designed toyield profit. The sale agreement, reduced inwriting,specified thepurchase 15 pricetobe £12,500.-- payable inseven instalments, as follows: (a) £1,000.— payable on the day of execution of the written agreement; (b)£2,000.- payable on 31/1/82; (c)£2,000.- payable on30/4/82; (d)£2,000.- payable on 31/7/82; (e)£2,000.- payable on 31/10/82; (f)£2,000.- payable on 31/1/83;and (g)£1,500.- payable on31/3/

1. Inthe event ofdelay tomeetthepaymentofanyinstalmentthe 25 purchasers would be liable topay interest fixed at7per centum. After paying thefirstthree instalments, amountingto£5,000.--, the purchasers made default in the payment of the fourth instalment due on 31/7/
2. InOctober, 1982,Mr. Komodromos, the advocate acting for the respondent, addressed a letter to two 30 ofthethree purchasers,thoseresidinginEngland, invitingthem to remedy their omission by 31st October, 1982, and pay on or before that day an amountof£4,000.--,thatis,theinstalment due •and the one payable on 31/10/
3. In case of failure the two purchasers were warned that they would be held answerable for 35 breach of contract and liable to damages. The letter isdated 9th October,
4. There was no evidence indicating when it was 288 20 1 C.L.R. Paraskeva &Others v. Lantas Plkis J. posted or received in England. We can, however, infer that the letter wasreceived priortoOctober26,1982, inviewofthe reply made on behalf of the two purchasers by their solicitors on that day. In their reply (given through their solicitors) the purchasers 5 informed the vendor they had every intention of honouring the agreement and that arrangements were being made for the despatch of the monies ofthe outstanding instalments. However, theydidexpressconcernaboutthefactthatthevendorwasnotthe registered owner ofthepropertyand fears aboutthelikelihoodof 10 inability on his part to transfer the property after payment of the purchase price. As a matter of fact, the vendor was not the registered owner of the immovable property he sold, but the purchaser of it,subject totermsand conditionsthat would enable himattheend oftheday,soheasserted,tohonourhisobligations 15 tothe purchasers. In response to the aforementioned ietter the respondent addressed threeseparate telegramstothesolicitorsofthe English purchasers, indicating(a)that he would fulfill hiscommitments to the purchasers, but 20 that (b)he was unwilling to have the terms ofthe agreement varied in any way and, more significantly still that, he insisted on the enforcement of existing contractual stipulations as to payment; addingthatintheeventofcontinued failuretomakedefault inthe 25 payment of outstanding instalments, he would consider the contract as broken bythe two purchasers. The inevitable inference is that on a date subsequent to the expiration of the period set forth in his letter of October 9, 1982, he informed the purchasers to whom the letter had been 30 addressed, that he regarded thecontractasextant and demanded payment of the outstanding instalments. As a matter of fact the amount of money due was posted to the respondent by cheque butowingtodelay ormisunderstanding thenecessary funds were nottransferred intimetomakepossiblepayment ofthecheque on 35 presentation. As a matter of fact, sufficient funds were made available for the purpose two days later. The respondent did not present the cheque for payment again and, a while later, on 20/ 11/82, informed the solicitors of the two purchasers that he regarded the contract as at an end for failure of the purchasers to 40 comply with the notice contained in the letter of 9/10/
5. He 289 PikisJ. Paraskeva & Others v. Lantas

(1988)adopted thisstand notwithstanding the telegrams of 3/11/82 and the letters addressed by the English purchasers' solicitors, signifying the commitment of their clients to honouring their contract with the respondent. Furthermore, thevendor asserted a right to retain the amount of £5,000.— already paid; also, the 5 vendor intimated hisintention tosellthe land elsewhere. The three purchasers joined in an action for repudiation of contract, claiming that the contract had been broken by the vendor and that in consequence they were entitled to a return of the money paid towards the purchase of the property, legal and 10 travelling expenses, and the fees paid to architects for the preparation of plans made in contemplation of acquiring. The vendor resisted the claim and maintained that the purchaserswereliableforbreachofcontractentitlinghimtoclaim, as in fact he did by way of counterclaim, £6,140.- by way of 15 damages.The loss wasascertained byreference tothe difference between the vaiue at which the property had been sold to the purchasers and the highestbid, thatis£6,500.-that theauctionof thepropertyattracted ashortwhileafter allegedbreachof contract by the purchasers. Be that as itmay, the property wasnotsold to 20 the highest bidder but returned to the registered owner upon payment to him by respondent the amount of £2,500.-compensation. The trial Court found for therespondent (vendor) and awarded him£5,000.--damageson thecounterclaim. Itisnonetooclearin the judgment whether the amount of £5,000.- was awarded additionally to the £5,000.— already paid by the purchasers or, whether bythejudgment itwasintended to allowthe respondent to retain the monies already received under the sale agreement. The claimwas dismissed. Inhisreasonsforjudgment thetrialJudge explainsthatthetime of payment of the instalments was of the essence and, consequently, the failure of the purchasers to meet stipulations regulating the payment of the instalments entitled the vendor to terminate the contract. It is evident that in so holding the Judge 35 misinterpreted the decision of the Supreme Court in Charalambous v. Vakana*, and cases cited therein, and failed to *

(1982)1 C.LR.310(thejudgmentoftheCourtwasgivenbyStyliamdes, J.) 290 25 30 1 C.L.R. Paraskeva &Others v. Lantas Pikis J. appreciate that equity has superseded the common law rule that contractualstipulationsaffecting paymentareoftheessence ofthe agreement. Now the rule isthat time stipulations for the payment of thepurchase price,includingacontract forthe sale ofland, are 5 notof the essence oftheagreement unlesstheyaresodeclared to be for reasons mutually in the contemplation of the contracting parties.The same principles govern the application of s.55 of the Indian ContractAct, 1872,upon whichs.55 of ourContract Law, . Cap. 149, is founded*. In this case not only the parties did not 10 make thetime of payment of thepurchase price of the essenceof the agreement but, on the contrary, they made provision for the payment of interest, a fact in itself suggestive that time was not intended to be of the essence. Therefore, time wasnot initiallyof the essence of thecontract as, indeed, counsel forthe respondent 15 candidly acknowledged. Was,then, the time ofpayment madeof the essence bythe subsequent notice of the vendor? The trial Court answered that question too, in the affirmative, holdingthatthatwastheeffect ofthenoticeofthevendordated 9/ 10/

1. Itcame to this conclusion despite the fact that the notice 20 had been addressed to only two of the three purchasers and the absenceofanyindication ofthelengthofthenoticegiventhereby. There wasno evidence indicatingeitherthetimeofpostingof the notice or establishing the date of its receipt; expect that we may infer that it was received not later than 26th October,
2. 25 Furthermore, the trial Court wholly overlooked the effect of subsequent events, noted earlier, particularly the telegram of 3 / 11/82, whereby the vendor had waived any right he might have acquired from the notice of 9/10/
3. Apartytoacontract cannot unilaterally varyorsupplement the 30 termsofan agreement. He may,however, intheface of improper conductonthepartofthecounter-contractingparty,givenoticeof intention to repudiate or withdraw from the agreement whereupon, provided thenoticeisreasonable havingregardtoall thecircumstances,hemayterminatetheagreementafter effluxion 35 of the time limited by the notice. There is most illuminating discussion ofthesubject inRe Barr'sContract**. * (See,Jamshedv.Burjor1i

(1916)431A.26,andStlckneyv.KeebleandAnother[1915]AC. 386). *· ii956]2AiIE.R.853. 291 Pikis J. Paraskeva &Others v. Lantas

(1988)Assuming the delay of the purchaser to meet the fourth instalment wasinexcusable andthevendor hada right to make timeoftheessence byreasonablenotice,wemust,nonetheless,in lightofthe facts, conclude that thenotice waswholly ineffective. Firstly,the noticewasm>taddressedtoallthepurchasersandas such waswholly abortive. 5 Secondly, thenotice was ineffective tofurnish thepurchasers, be itthosetowhom itwas addressed, ofreasonable forewarning of theintention of thevendor torepudiate thecontract for non compliance with stipulations affecting the payment of the 10 purchase price. Theabsence of evidence astoposting and the date ofreceiptofthe letter, isfatal tothe case ofthe respondent. Thirdly, the right, if any, that had accrued to the vendor following theexpiration ofthe period limited bythenotice,had been waived bysubsequent conduct, particularly the telegram of 15 3/11/

1. Counsel forthe respondent found itdifficult, attheendofthe day, tosupport the judgment ofthe trial Court onthispoint, too. In ourjudgment the notice dated 9/10/82 didnot, for the reasons indicated, make time oftheessence. Hence, thevendor hadno 20 right in lawtorepudiate the agreement. The intention declared in the letter of20/11/82, nolonger tobebound bythe agreement, had nojustification in law;it wasnota bare threat either.The vendor intimated that hewould look foranother purchaser and, more importantly that, hewouldretaintheamountof£5,000.- in 25 satisfaction of a claim to damages. His conduct and action amounted to a repudiation of the agreement, entitling the purchasers totreat thecontract either asrescinded orasbroken by thevendor forwhich he could beheld liable indamagesfor breach of contract. Wearewell aware that therepudiation isa 30 drastic conclusion nottobe arrivedatsave where the repudiatory acts, presentoranticipatory, gotothe rootofthe agreement*. The claimofthe plaintiffs isnotclearlydefined inthe statement of claim anddoes notclarify whether their action isfounded on «iscission orbreach ofcontract.Judgingfrom theitemsofspecial 35 damage claim, oneisapttoinfer that the essence oftheir action • (See. interalia,FederalCommerce v.MotenaAlpha inc.11979) 1AllE.R. 307(H.L.); and WoodarInvestment v. Wimpey Construction[1980}1 AllE.R. 571 (H.L.). 292 1 C.L.R. Paraskeva & Others v. Lantas Pikls J . <tesrescission; andthecase was prosecuted uponthatbasis before tthetrial Court.The rights of the innocentparty upon rescission of contract are explained with remarkable clarity, if I may say so with respect, by Meggary, J. as he thenwas, inHorsierv. Zorro*. 5 The parties will, so far as possible, be restored to their pre­ contract position which, in the case of the purchaser of land,will include the return of purchase price orthe part thatwas paid plus legalexpenses for investigating thetitle.Thelatteritemof damage istoalarge extentinterwoven with English conveyancing practice. 10 Applying these principles tothe facts of ourcase the appellants are entitled torecover uponrescission theamountof£5,000-. To. the same conclusion we would be driven if the claim were treated as one for damages for breach ofcontract.Theamountof £5,000.is in any event recoverable by the appellants for total failure of 15 consideration. Moreover, it can be argued on the authority of Chabbra Corp. Pte. Ltd. v. JagShakti** that the same amount is recoverable by way of damages for breach of contractalthough no definitive answer need be given on that aspect of the case as the claim of theplaintiffs hasbeen treated as one for restorationupon 20 rescission ofcontractfollowingtherepudiationof therespondent. 25 Lastly, the amount of £5,000.-- satisfies the fundamental rule governing the award of damages, applicable both in cases of contractandtort,referred toby May, J.,inC.R. Taylor (Wholesale) Ltd. v. Hepworths Ltd***, that damage must, at all events, be reasonable as between plaintiff and defendant. 30 For all the above reasons the judgment of the trial Court is set aside. Judgment is entered on the claim for the plaintiffs for £5,000.-; the counterclaim is dismissed. Therespondentwill pay the costs of the proceedings on appeal and before thetrialCourt. Order accordingly. Appeal allowed. * [1975)1 AllE.R.584,
2. ** [1986]1 AllE.R. 480; theimmediateissue wasthedamagerecoverableforconversion. * " [197η 2All E.R.
3. 293