Gregory M. A. Lee v Ian Harrison and Others (CL 1 of 2018) [2022] TCASC 3 (21 January 2022)

Flynote

Contract Law

Case summary

The plaintiff’s claim was dismissed and the 2nd defendant’s counterclaim succeeded with damages to be assessed. The Court found that none of the plaintiff’s claims were established by any cogent evidence. The entire claim was commenced and prosecuted for the purpose of retrieving the deposit, which was forfeited under the terms of the Agreement. The plaintiff admitted that the Agreement was valid at the point of execution. The court found that there was no variation of the Agreement (paras 323-324; 350-351). The Agreement required any amendment to be in writing. There was no evidence of a signed written varied agreement and there was no evidence of any agreement to dispense with the formality requiring writing. Further there was no evidence that the defendants orally agreed to a variation of the terms of the Agreement (paras 189-192) MWB Business Exchange Centre Ltd. v Rock advertising Ltd [2018] UKSC 24 CONSIDERED. While there was evidence that the defendants agreed to allow the plaintiff to explore the possibility of the debt takeover, it was made clear that any variation was subject to FCIB’s consent, which was not obtained by the closing date. The Court found that even if there had been an agreement to vary the Agreement in the terms alleged by the plaintiff, it would not be enforceable as it was not supported by any consideration (paras 178-188) In Re Selectmore Ltd [1993] EWCA Civ 8; Cowey v Liberian Operations Ltd [1966] 2 Lloyd’s Rep 45, cited in T. Comedy (UK) Ltd. v Easy Managed Transport Ltd [2007] 2 Lloyd’s Rep 397 at [29] CONSIDERED. Having found that there was no variation to the Agreement, the Court found that the defendants were entitled to have recourse to the default provisions in the Agreement, and that the Default Notice, which made time of the essence, and the Notice of Termination, served following the plaintiff’s failure to complete, were valid (Default Notice: paras 239-242; Notice of Termination: paras 243-272) Behzadi v Shaftesbury Hotel Ltd [1992] Ch 1 CONSIDERED In all the circumstances, the Court denied the plaintiff specific performance as he failed to demonstrate that the Agreement had been varied, and there could be no enforcement of the unproven varied agreement. Further, the plaintiff failed to prove that he was ever in a position to complete the transaction (paras 290-291). The plaintiff was not entitled to damages as the agreement was lawfully terminated (paras 292-295). The Vendor’s retention of the deposit as agreed upon damages for the plaintiff’s failure to perform his obligation of completing the sale/purchase transaction, was neither wrongful, nor fraudulent, and there was no element of unjust enrichment in it (paras 296-303) Banque Financiere v Parc (Battersea) [1998] UKHL 7 per Lord Steyn; Fibroska Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 CONSIDERED. In the counterclaim, the Court ordered that the Caution on the 2nd defendant’s property be removed immediately. The Court found that the Caution was also not lodged in good faith, or for good cause, as by the plaintiff’s admission, it was not to vindicate his right as the purchaser, but to bring the defendants to their knees, for the purpose of bringing them to the table again to agree to a new Agreement on terms favourable to the plaintiff, even though the executed Agreement had been terminated. The defendants were awarded their costs (paras 328-348).

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