Paige v Webb

A consent order for specific performance does not, without express wording, replace the underlying contract. The contract remains operative subject to the amendments stated in the order. Where the order changes the price and completion date but does not alter the contractual payment provisions, those provisions continue to govern completion. A notice to complete is ineffective where the party serving it is not ready, willing and able to complete on the proper construction of the order. In that event, contractual rescission cannot validly follow.

The buyer agreed to purchase the seller’s leisure centre. After a dispute about completion, the parties compromised earlier proceedings by a consent order requiring specific performance of the agreement at an amended price and by an amended completion date.

The buyer tendered the contractual minimum payable on completion and contended that the balance remained payable under the instalment provisions. The seller treated the buyer as being in breach, served a notice to complete and purported to rescind. The county court declared the agreement rescinded and ordered cancellation of the buyer’s caution. The central issues were the effect of the consent order on the contractual payment provisions and whether the seller had validly rescinded.

1. Appeal allowed. The consent order did not require the buyer to pay the entire amended price of £83,700 as a single payment on completion.
2. The order was for specific performance of the existing agreement. It expressly amended the price and completion date, but did not amend the contractual provisions governing the manner of payment. The original provisions therefore remained effective. The buyer was entitled to pay £75,000 on completion and the balance of £8,700 within six months, subject to the contractual provisions concerning interest and the seller’s finance charges.
3. The finance charges remained payable, but only for the six-month period from the amended completion date. If the parties could not agree the figures, the matter was remitted to the county court.
4. The seller’s notice to complete was invalid. Under Standard Condition 6.8, the party serving such a notice had to be ready, willing and able to complete. The seller was unwilling to complete on the basis of the proper construction of the consent order. There was therefore no effective rescission under Standard Condition 7.5.2.
5. The question concerning the deed of rectification did not arise for decision because the seller was not entitled to rescind. The court nevertheless observed that the buyer was contractually entitled to the deed and that practical arrangements could be made for delivery of the original or execution of a duplicate.
6. The buyer was entitled to enforce the order for specific performance. The outstanding matters in the draft order, including any sums requiring determination, were remitted to the county court.

• Court of Appeal (Civil Division): Appeal from the Portsmouth County Court allowed. The order declaring rescission and cancelling the caution was set aside, and the matter was remitted for determination of outstanding matters.