Maloo and others v Somar

An express obligation to convey land with good marketable title does not require a separate implied term allocating responsibility for planning permission where that permission is necessary to convey the promised title. The vendor must obtain it as part of performing the primary obligation, rather than as a contractual condition, absent an express term. A transfer of the land to a third party may constitute repudiatory breach. Where specific performance is unavailable because the required permission is absent, the purchaser may recover substantial damages, including loss of bargain, rather than merely the purchase money.

The respondent agreed to purchase eight development lots from the first appellant for $500,000. The agreement was initially oral and was later recorded in a memorandum stating that the vendor would provide good marketable title. Before completion, the first appellant transferred the whole property to his sister, the third appellant, who had notice of the agreement.

At trial, Jones J found breach of contract, awarded damages assessed at $2,035,400, and held that specific performance was unavailable because planning permission for subdivision had not been obtained. The Court of Appeal of the Republic of Trinidad and Tobago dismissed the appellants’ appeal in February 2016. The central issue before the Board was whether planning permission was an implied contractual obligation or a condition of the agreement, and whether the respondent was limited to recovery of the purchase price.

Appeal dismissed.

1. On the trial judge’s findings, which were not challenged on appeal, the agreement contained no express term concerning planning permission. It did not make permission an obligation of either party or a condition of the contract’s formation or completion. No term needed to be implied.
2. The memorandum imposed an express obligation on the vendor to convey the eight lots with good marketable title. The Board proceeded on the shared assumption that subdivision required planning permission under section 8(2) of the Town and Country Planning Act (No 29 of 1960). The Board expressed no view on whether subdivision by conveyance alone fell within that statutory definition.
3. Where planning permission was necessary to convey the promised good marketable title, the vendor had to obtain it as part of performing the primary obligation to convey. This was not a separate implied contractual obligation.
4. The first appellant’s transfer of the lots to his sister was a repudiatory breach. Although the respondent initially sought specific performance in the alternative to damages, the contract was discharged by repudiation once specific performance was found unavailable because planning permission was absent.
5. The respondent was therefore entitled to substantial damages, including loss of bargain, rather than merely the return of the purchase price. A challenge to the assessment of damages based on the state of planning permission in April 2012 could not be entertained because permission to raise that factual issue before the Board had neither been sought nor granted.

• Privy Council: Appeal dismissed on 25 March 2019: [2019] UKPC 13.
• Court of Appeal of the Republic of Trinidad and Tobago: Appeal dismissed in February 2016.
• Trial court: Jones J found breach of contract, awarded damages of $2,035,400, and held that specific performance was unavailable because planning permission for subdivision had not been obtained.