Irwin v Wilson & Ors

A contractual condition requiring a seller to provide documents correcting a defect in title may be waived unilaterally by the buyer where, construed in the contract as a whole, it is for the buyer’s exclusive benefit. A separate right allowing either party to terminate if the condition is not fulfilled by a specified date does not alter that conclusion. Waiver does not make the contract unenforceable merely because the contractual completion machinery refers to the waived condition; the court may determine a reasonable completion date, ordinarily by reference to the agreed period. However, a notice exercising a contractual right to terminate takes effect when given, unless the contract provides otherwise. A later waiver cannot revive the terminated obligations.

The claimant agreed to sell the defendants a leasehold flat. The contract required him to provide corrected title documents by a specified date and allowed either party to give five working days’ notice to terminate if he had used all reasonable endeavours but had been unable to provide them. The claimant served such a notice. Before the notice period expired, the defendants purported to waive the document-production condition and sought specific performance.

The County Court held that the condition was not solely for the buyers’ benefit and dismissed their application. On appeal, the issues were whether the condition was capable of waiver, whether it was severable from the completion provisions, and whether the defendants could waive it after the termination notice had been served.

1. The appeal was dismissed. The contract had been validly terminated, although the reasoning differed from that of the County Court judge.
2. The governing test was whether the stipulation was, expressly or by necessary implication, for the exclusive benefit of the party seeking to waive it. The question was one of construction of the contract. The relevant benefit was the substantive benefit of performance of the condition, not the separate benefit of a right to terminate if performance failed.
3. The document-service term concerned the correction and production of title documents. Once the sale completed, the seller would have no continuing interest in defects in his former title. The term was therefore for the exclusive benefit of the buyers and was capable of unilateral waiver. The fact that clause 25.2 gave both parties a termination right did not change that conclusion, since that right arose only if the condition was not fulfilled.
4. The term was severable from the remainder of clause 25. If waiver were treated as performance, completion was due 14 days after waiver. If the term were treated as deleted, the court could supply a reasonable completion date. The contractual machinery did not therefore prevent waiver.
5. The decisive issue was the effect of the claimant’s notice under clause 25.2. Construed in context, the notice brought the parties’ contractual relationship to an end when served. The five working days allowed time for the buyer to vacate and for repayment arrangements; they did not preserve the primary obligations or provide a final opportunity to perform or waive the condition. The reasoning in Akzo Nobel UK Ltd v Arista Tubes Ltd [2010] EWCA Civ 28 was applicable despite differences in the wording and factual context.
6. Because the claimant’s notice was effective on service, the defendants’ later purported waiver was ineffective. Their application for specific performance was accordingly dismissed.

• High Court (Chancery Division): On appeal from the decision of His Honour Judge Madge in the Central London County Court dated 16 July 2010, the appeal was dismissed and the dismissal of the defendants’ specific-performance application was upheld.