Following our e-update on 17 August discussing Malcolm Snowie (and others) v Museum Hall LLP - "Developer-1, Purchaser-0; another failed attempt to avoid completion", a sheriff court decision of 27 August rejected another (inventive) attempt by a purchaser to resile.
The Facts
The case of AMA (New Town) Limited v Anthony Findlay, concerned a plot developed by AMA, to be purchased by Mr Findlay, who had paid a deposit.
The date of entry passed without the remainder of the purchase price being paid. AMA therefore withheld delivery of the disposition.
AMA sought an order from the court, forcing Mr Findlay to perform his contractual obligations in terms of the missives - namely to pay the remainder of the price. In exchange, AMA would hand over the disposition.
The facts were not in dispute and the arguments centred on the remedies available to AMA: in particular whether Mr Findlay could be forced to pay despite not having received a disposition and vacant possession.
The Arguments
Mr Findlay argued that it was not competent to seek judgment for the balance of the price, as AMA too were in breach by not transferring title to the property to Mr Findlay. Mr Findlay argued that AMA were bound to seek either implementation of the contract or to cancel it altogether and seek damages. The pursuers were only entitled to payment of the purchase price where entry to the property had already been given.
AMA argued that, as Mr Findlay was in breach of contract (i.e. by not paying), AMA were entitled to withhold performance (i.e. by not delivering the disposition).
The Decision
Sheriff Holligan decided that this was a case of breach of contract and the remedies available are clear; breach of contract for the sale of specific subjects gives the aggrieved party "the legal right to sue for implement, and although he may elect to do so, he cannot be compelled to resort to the alternative of damages unless implement is shown to be impossible."
Sheriff Holligan concluded that the question of whether entry to the property had been given or not was not of importance. Once faced with an admitted breach of contract by Mr Findlay, AMA was entitled to seek implement by way of payment.
This shows that it is entirely proper for a developer to refuse to deliver a disposition when a purchaser fails to pay; he is still able to obtain decree to implement the terms of the contract and enforce payment by the purchaser, rather than have to cancel the contract, seek damages and find a new purchaser.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
