Oakglade Investments Ltd & Anor v Dhand

A notice to complete a land sale contract is effective only if it requires completion of the contract that actually binds the parties. A vendor cannot rely on a notice requiring payment based on an unproved variation or auction bid. The vendor must also be ready and willing to fulfil its own outstanding obligations. A notice requiring completion on different terms is ineffective, may amount to repudiation, and does not entitle the vendor to rescind or forfeit the deposit.

The vendors contracted to sell three properties to the purchaser under underwriting agreements. They later alleged that the agreed prices had been increased orally and by higher auction bids. The trial judge rejected those allegations and found that the purchaser was bound to buy at the original settled prices.

The vendors served notices to complete requiring the higher sums, then rescinded the contracts and purported to forfeit the deposits. HHJ Platts held that the notices were ineffective and ordered repayment. The vendors appealed, arguing that they were ready to transfer the properties and that the purchaser should have tendered the sums he considered due.

1. Appeal dismissed. The notices to complete were ineffective because, read with the completion statements, they required payment of higher sums based on unproved oral variations and auction bids. They did not require completion of the original underwriting agreements at the settled prices.
2. A purchaser cannot be in repudiatory breach for failing to complete a contract on terms by which he was not bound. The notices were therefore nullities.
3. The vendors’ proposed answer that the purchaser should have tendered the sums he considered payable did not cure the defect. The vendors would have refused to complete on payment of the settled price unless the higher sum was paid. On the findings, that refusal would itself have repudiated the contract.
4. A party serving a notice to complete must be ready and willing at that time to fulfil its own outstanding obligations: Quadrangle Development and Construction Co Ltd v Jenner [1974] 1 WLR 68 at 71. The vendors were not ready and willing unless the purchaser paid more than he was legally bound to pay.
5. The notices did not put the purchaser in breach and amounted to repudiation by the vendors. The vendors could not rescind or forfeit the deposits; the purchaser was entitled to repayment.

• Court of Appeal (Civil Division): Appeal from the orders of HHJ Platts dated 7 January 2011 and 23 February 2011 dismissed.
• Manchester County Court: HHJ Platts held that the notices served on 5 August 2004 were ineffective and that the vendors were not entitled to forfeit the deposits.