Summary

The Standard Conditions of Sale (4th edition), applicable to residential conveyancing, did not at clause 1.5 operate to exclude subsales

Facts

The claimant purchaser (P) claimed for the return of a deposit paid on exchange of contracts for the purchase of a leasehold residential property from the defendant vendor (N). The contract incorporated the Standard Conditions of Sale (4th edition), which at clause 1.5 provided that "The buyer is not entitled to transfer the benefit of the contract". The lease provided that N could not assign it without the landlord's consent, and the contract required P to provide references so that N could obtain that consent. P later proposed that the property should be transferred direct to a sub-purchaser, but N refused to do so, relying on clause 1.5 as excluding direct-transfer subsales. P failed to complete the purchase and gave notice rescinding the contract on the basis that N's refusal to transfer to the sub-purchaser was a repudiatory breach, alternatively because N had not obtained the licence to assign by the required date. The issues were whether clause 1.5 operated to exclude subsales, and whether P or N was the party entitled to rescind the contract. P argued that, by contrast with the Standard Commercial Property Conditions of Sale (2nd edition), which at clause 1.5.2 specifically excluded subsales, there was nothing in the non-commercial standard conditions explicitly to exclude subsales, and no reason to imply such an exclusion.

Held

(1) In the absence of provision to the contrary, a buyer was entitled to require the vendor to transfer the property on completion to a third party of his choosing, Earl of Egmont v Smith (1877) LR 6 Ch D 469 Ch D, Curtis Moffat Ltd v Wheeler (1929) 2 Ch 224 Ch D and Williams on Vendor and Purchaser, 4th edition, 1936 considered. That also applied to the sale of leasehold property, including cases where any prohibition on assignment without consent could not be unreasonably withheld. It was open to any vendor to include an exclusion of subsales in a non-commercial contract, as clause 1.5.2 of the commercial standard conditions did. If that explicit exclusion was not present, clause 1.5 of the non-commercial standard should be read as not excluding subsales. It was significant that the commercial standard conditions were different, and the Conveyancing Handbook, 16th edition, The Law Society, Part B.14 was unfortunate or even misleading in failing to draw a distinction between the two. P had been entitled to rescind for repudiatory breach. (2) The licence to assign had not been provided by the required date and P was not in breach by failing to provide references, as the landlord had indicated that it did not require such references. Accordingly, P had been not been in breach and was entitled to return of the deposit with interest.

Judgment for claimant