(1988)1988September 20 (MALACHTOS,PIKIS,PAPADOPOULOS,JJ.) MARIASTYLIANOU RODOULLI, Appellant-Plaintiff, v. ANTONIOSCONSTANTINOU PAPASAWAS &ANOTHER, Respondents-Defendants. (CivilAppeal No. 7270). Contract— The Contract Law, Cap. 149, s.55 — Time of payment — Thepartiesmay make itoftheessence ofthecontract— Agreement for sale of land stipulating for vendor's right to rescind in case of default— Time of payment isof the essence — Whether offer of payment afterdefault remedies thedefaultand extinguishes rightto rescind—In the absence of a waiver, question determined in the negative. 5 Contract—Notice of rescission —Time when such notice becomes effective. The respondents agreed to sell a share in a plot of land to the 10 appellantsfor£8,000.-payableasfollows, i.e.£2,000.-upon signing theagreement andthe balanceintwoyearlyinstalmentsorwithintwo yearsat6% interest. The agreement provided that the instalments should be paid promptly; in the event of default the vendor would be at liberty to 15 terminate the agreement. The appellants failed to pay the balance as aforesaid and the respondents, as a result, rescinded the agreement by a double registered letter dated 3.1.1980. The notification of arrivarof the letter reached appellant's letterbox on 5.1.1980, but the appellant 2 0 didnot collect the letter until 10.1.1980. The trial Court, however, found that the appellant had communicated withtherespondent on5.1.1980signifying readiness tomeet hisobligationsunder thecontract.Therespondents reacted negatively and informed him they had already rescinded the 2 5 agreement and that a notice tothatend had been sent to him. 540 1 C.L.R. Rodoulll v. P a p a s a w a s Thisisanappeal from thejudgmentwhereby appellant'saction for specific performance* of thesaid agreement was dismissed. 5 10 15 20 Held, dismissing the appeal:
(1)The effect of the stipulations affecting timeinthiscase was, asacknowledged, tomake timeof the essence. Notonly that;the parties went a step further and specified the rights of the vendor in the event οΓηόη-payrnent, the most prominent of which was therighttoterminatethe agreement.
(2)InTheBrimness [1974] 3 All E.R.88,itwas decided thatnotice of termination, communicated through a telex machine, became effective atsuchtimeasitwould, inthenormalcourseofbusiness, be expected tocome tothe knowledge of the addressee. The principle espoused intheabove caseisbothfair andcommerciallysound.The implications of the application of that principle to letter communications were not explored. Arguably the wider principle involved isthatwritten communicationsmustbe deemed tocometo the notice of the addressee at such time as it would be objectively reasonable toanticipatethatthey would reach him.
(3)However, theexactpointof thattimeneednotbe decided inthis case, because theappellant was orally informed of therescission un 5.1.1980. Her attempt to remedy the default was made after such oralcommunication.
(4)An offer to remedy a default after the accrual of a right to rescind,does notextinguish theright.Therightremainsextant unless waivedby unequivocal action. 25 Appeal dismissed withcosts. Casesreferred to: Paraskeva and Others v.Lantas {1988) 1C.L.R. 285; TheBrimness [1974] 3 All E.R.88; , MardorfPeachy. AtticaSea Carriers [1977] 1All E.R.
- 30 Appeal. 35 Limassol (Hadjitsangaris, P.D.C. and Hadjihambis, D.J.)dated the 11th October, 1986 (Action No. 368/80) whereby her action for specific performance of the contract between the parties was dismissed. Appeal by plaintiff against the judgment of the District Court of * Theagreement had been registered under TheSale olLand (Specific Penormance) Law. Cap.
- 541 Rodoulll v. P a p a s a w a s
(1988)ft Michaelides with C.Loizou, forthe appellant. B. Vassiliades,for the respondents. MALACHTOS J.: Having heard Counsel for the appellant, we consider it unnecessary to hear Counsel for the respondents in reply.Thejudgment of the Court willbe delivered byPikisJ. 5 PIKISJ.: Thisistheappeal ofthebuyer ofaplotofland against an order of the District Court of Limassol dismissing his action against the vendors for specific performance of the contract between them. The trial Court found that appellant made default :n his obligations under the agreement affecting the payment of 10 the purchase price; a default that gave the purchaser a right to terminate thecontract.Andasthevendor, inexerciseofthatright, rescinded the agreement between them, the contract lapsed or was extinguished. Consequently, the contract that the appellant sought to enforce by his suit before the District Court became 15 inoperative and assuch incapable of enforcement. Thewritten agreement between theparties, dated 29.12.1977, provided for the sale of a share in a plot of land for £8,000.payable by instalments as follows:(a)£2,000.- upon execution of the agreement, an amount duly 20 paid inaccordance with thetermsof the contract; and, (b)The balance intwo yearly instalments orwithin twoyearsat 6% interest. The agreement provided that the instalments should be paid promptly; inthe event of default thevendorwould be atlibertyto 25 terminate theagreement. Recentlywehad occasion todebate the implication of terms in a contract for the sale of land affecting the time of payment of instalments of the purchase price.The case is that of Paraskeva and Others v. Lantas*.We pointed out that the parties may make the time of payment of the essence of the 30 asgreement, a position safeguarded by s.55 of the Contract Law, ?ap. 149**thatbyenlarge reproducesEnglishlawonthe subject. The effect of the stipulations affecting time in this case was, as acknowledged, to make time of the essence. Not only that; the partieswentastep further andspecified therightsofthevendor in 35 the event of non-payment, the most prominent, ofwhich was the ^41988)1 C.L.R.
- *'Modelledons55,IndianContractAct,
- 542 1 C.L.R. Rodoulli v. P a p a s a w a s Pllds J. right to terminate the agreement. In Paraskeva (supra) it was explained that where a contract is rescinded the parties must be restored, so far as possible,totheirpre-contractposition a process thatwillordinarily entailreturntothepurchaserofthemoniespaid 5 towards the purchase price. The trial Courtfound thatappellant failed topay thebalance of the purchase price as provided inthe agreement, whereupon the respondents acquired arighttoterminatethecontract. Inexercise of that right they rescinded the agreement, a decision notified by
- c. letteraddressed totheappellant on3rd January,
- Copy of that letter was sent to the Lands Dept. in view of the fact thatthe contract had been registered under the provisions of the Sales of Land (Specific Performance) Law, Cap.
- The letter was despatched by double registered post, a process entailing 15 notification of the arrival of the letter atthe post office of the area where the addressee resides. Thereafter the recipient is free to collect the letter athis convenience.The notification of the arrival of theletterreachedtheletterbox attheresidence of theappellant on 5th January, 1980, as thetrial Courtfound, or possibly earlier. 20 The appellant did not collect the letter until 10th January,
- Nonetheless, on 5th January, 1980, the trial Court,found, he communicated with the respondents over the phone signifying readiness to meet his obligations under the contract. The respondents reacted negatively and informed him they had 25 already rescinded the agreement and that a notice to that end had been sent to him. In that way appellant gained definite knowledge of the fact that respondents had terminated the agreement. Later, in the evening of 5th January, 1980, appellant sent atelegram tothevendors, succeeded twodayslaterby aletter 30 of his advocate expressing readiness to pay the balance coincidentallywith arrangementsforthetransfer of theland.Other than the above intimation, no attempt was made to pay the balance totherespondents.ThetrialCourtfound, ontheauthority ">f The Brimness*, that the notice of termination was effective 35 ιpon arrival at the letter box of the appellant of the notice of the registered letter.Therefore, theoffer to pay thebalance came too late, that is, after the rescission of theiragreement. Moreover, the tender was illusory and notreal in that at no time was the money ·! 197413AllE.R. 88 543 Pikls J. Rodoulll v.P a p a s a w a s
(1988)paidtotherespondents.Theaction ofthe appellant was confined to an offer to pay; no payment was made. Of the many grounds raised in the notice of appeal, only one waspursued before us,namely, the validityofthe finding that the notice of termination became effective by 5th January, 1980, examined in conjunction with what counsel described as the tender of the balance. 5 In 77ie Brimness (supra) it was decided that notice of termination, communicated inthat case througha telex machine, became effective at such time as it would, in the normal course of 10 business,beexpectedtocometotheknowledgeoftheaddressee.The principleespoused intheabovecaseisbothfairand commercially sound. The implications of the application of that principle to letter communications were not explored. Arguablythewider principle involvedisthatwritten communications mustbedeemed tocome 15 to the notice of the addressee at such time as it would be objectively reasonable to anticipate that they would reach him. Whether that time should be the hour at which the notice of a double registered letter arrives at the letter box or such time asit would ordinarily be reasonable to anticipate the recipient to 20 collect the letter thereafter, need not be decided in thiscase. For the decision to rescind the contract and the notification of it by letter, had been duly communicated to the appellant orally. His subsequent action was pursued despite knowledge of thatreality, a reality that neither the trial Court nor we can overlook. Such 25 attempt as was made to remedy thedefault on the evening.of 5th January, 1980, and subsequently was made after the exercise of the right of the appellant, earlier referred to, to rescind the contract, that is,after the event of rescission. Thecasewasargued before thetrialCourtandonappealonthe 30 assumption thatthetenderofthebalance,assumingavalid tender had been made, could remedy the default. This is not so. The implications of default to meet the payment of instalments when timeisof the essence, were analysed (withgreat clarity*,tiwe may saysowith respect), inMardorfPeach v.AtticaSea Carriers*. 35 An offer to remedy a default after the accrual of a right to rescind, does not extinguish the right. The right remains extant unless waived by unequivocal action. In this case not only the ' 11977] 1 AllE.R. 545 544 1C.L.R. Rodoulllv.Papasawas PUdsJ. respondentsdidnothingtowaivetheirrighttorescind,buton the contrary asserted itwithout equivocation before the belated offer of the appellant to remedy his default in the discharge of his contractual obligations.Inevitably the appeal mustbe dismissed. 5 10 Before disposing of the appeal, we may notice that the respondents offered to refund the amount of £2,000.representing the first instalment, and the Court ordered itsreturn to the appellant; no doubt in order to restore the parties to their statusquo ante. Inthe resultthe appeal isdismissed with costs. Appeal dismissed with costs. 545