Mungalsingh v Juman

In an open contract for the sale of land, the vendor must show good marketable title within a reasonable time, and completion must follow promptly. A vendor cannot make time of the essence before showing good title. In Trinidad and Tobago, current water-and-sewerage and land-tax documents formed part of that requirement because unpaid charges could affect the property. Specific performance remains generally available for land sales because damages are not ordinarily adequate for unique land. A seller’s promise to provide documents may also support promissory estoppel where the buyer reasonably relies on it and it is understood to precede completion, although that alternative was not necessary to decide the appeal.

Mungalsingh v Juman concerned an agreement under which Mr Mungalsingh agreed to sell land and a dwelling house to Mr Juman. The agreement contained no detailed completion conditions. After paying a deposit, Mr Juman sought current water-and-sewerage and land-tax documents. Mr Mungalsingh later served a notice requiring completion by a specified date and treated the agreement as terminated when completion did not occur.

Bereaux J found that the seller had not shown good title because the documents had not been produced and ordered specific performance. The Court of Appeal of Trinidad and Tobago upheld that decision. The appeal concerned whether the seller could make time of the essence before producing the documents, whether the buyer was ready, willing and able to complete, and whether damages were an adequate remedy.

1. Disposition. Lord Neuberger delivered the judgment of the Board. The appeal was dismissed and the order for specific performance was upheld.
2. Open contract and time. An open contract for sale of land contains implied terms that the vendor must show good title within a reasonable time and that completion must occur promptly thereafter. Time was not initially of the essence. After the completion date had passed, a party ready, able and willing to complete could make time of the essence by requiring completion within a reasonable time. The rule was stated by reference to Raineri v Miles [1981] AC 1050.
3. Good marketable title. The Board rejected any material distinction between good title and good marketable title. The title must be one which the court would require an unwilling purchaser to accept. The Board relied on Re Spollon and Long’s Contract [1936] Ch 713 and Barclays Bank plc v Weeks Legg & Dean [1999] QB 309.
4. Production of documents. The evidence of local conveyancing practice, together with the statutory consequences of unpaid water rates and land tax, established that the vendor had to produce the current documents before good title was shown. The seller therefore could not validly serve the notice to complete on 28 December 2006. Sieunarine v Carr (HCA No 5719 of 1986) did not undermine that conclusion because it concerned whether outstanding water rates were a defect in title.
5. Estoppel. Alternatively, and obiter, the Board considered that a seller may be estopped from requiring completion where the seller promises to provide documents, the buyer reasonably relies on the promise, the promise is understood to precede completion, and the seller has not resiled from it. The point was unnecessary to decide.
6. Other arguments. Reliance on outstanding rates and taxes as an existing encumbrance failed because the relevant charges were paid up to the end of 2006 and land tax did not become due until 31 March 2007. A readiness objection raised for the first time on appeal was not permitted absent unfairness, and there was no positive evidence that the buyer was unable to complete. Specific performance was appropriate because damages are traditionally inadequate for the sale of land, each piece of land being unique. The costs order was reserved for written submissions within 14 days.

• Privy Council: Appeal dismissed. The Board upheld the Court of Appeal’s decision and the order for specific performance.
• Court of Appeal of the Republic of Trinidad and Tobago: Yorke-Soo Hon, Smith and Rajnauth-Lee JJA upheld Bereaux J’s order.
• High Court: Bereaux J ordered specific performance of the agreement for sale.