Symes v Couch and J.J. Couch Engineers Ltd

JurisdictionJersey
CourtRoyal Court
Judge(Crill, Deputy Bailiff and Jurats Le Quesne and Le Breton):
Judgment Date27 July 1978
Date27 July 1978
ROYAL COURT
(Crill, Deputy Bailiff and Jurats Le Quesne and Le Breton):

C.M.B. Thacker for the plaintiff;

P.R. Le Cras for the first and second defendants.

Courts—Royal Court—jurisdiction—general equitable jurisdiction—allows court to recognize doctrine of part performance, with reliance by plaintiff on oral promise, as justification for ordering defendant to implement contract of sale

Land Law—contract of sale—enforcement—specific performance not strictly available but oral contract followed by plaintiff's part performance in reliance on contract not to be used as vehicle for fraud—defendant ordered to pass contract or pay damages

CRILL, DEPUTY BAILIFF: The plaintiff in this action is a chartered engineer. The first defendant is the beneficial owner of the second defendant, which conducts the business of heating and general engineers in Jersey and Guernsey. It will be convenient hereafter to refer to the second defendant, where appropriate, as "the company".

In the summer of 1968, the plaintiff was told by a member of the company's staff that there might be a vacancy for him to be employed by the company. There followed a number of discussions between the plaintiff and the company, represented by the first defendant, and also between the company's professional advisers; some correspondence also ensued. The plaintiff arranged to sell his home in England, gave notice to his employers and started work for the second defendant on the 1st December, 1968. He did so, he says, because he had made an oral contract of employment with the first defendant, on behalf of the company, under which, apart from the conditions of his salary, he would contribute £3,000 towards the cost of buying a house for him, but in the name of the company (an arrangement necessary because of the exigencies of the housing position at that time), pay the interest on such remaining sum as might be necessary to be raised to acquire a property and finally, when the Housing Committee had given its consent, the company would transfer the property to him. The Housing Committee has not yet given its consent.

The plaintiff moved into the property which was, and is, 11 Nomond Avenue, La Pouquelaye, St. Helier, and remained there until he left in 1975, to live in a flat at First Tower, which formed part of a commercial set of premises, the lease of which had been acquired by his wife. The plaintiff's position in the company had been that of Managing Director, until he resigned that post in 1975. He remained employed by the company in a subordinate technical capacity until he was given notice in April, 1976.

Later that year, the company notified the tenant of 11 Nomond Avenue, who had been installed by the plaintiff, to discontinue the payment of rental to the plaintiff and instead, to pay it to the company. Up to that time, the plaintiff had continued to pay interest on the bank mortgage. He stopped doing so in July, 1976. He claimed that the action of the company in instructing the tenant to pay the rental to it, was a repudiation of the valid oral agreement (evidenced in writing, as we shall mention later) for the sale of 11 Nomond Avenue to him, but postponed until the happening of a condition subsequent, i.e., the grant of the consent by the Housing Committee. He sues for damages and the following relief from the second defendant:—

"That the Plaintiff be granted a declaration that there is an agreement between himself and the Defendant Company under the terms of which he is entitled (i) to require the Defendant Company to join him in an application to the Housing Committee for consent for the transfer to him of the said property (ii) pending such application being approved and the said transfer being effected to allow the Plaintiff to let the said property and to receive the rental (if any) paid by occupants of the said property (iii) upon such a transfer being approved but in the event of the Defendant Company failing to complete the transaction to seek an order from the Royal Court that the said property be transferred to him (iv) in the event of breach by the Defendant Company of its obligations under (i), (ii) or (iii) above to seek damages . . ."

The first defendant and the second defendant deny that there was any such agreement to transfer 11 Nomond Avenue or any other property to the plaintiff; that he occupied it under a normal service tenancy; and that if there was an agreement to enable the plaintiff to acquire the company's property, that agreement is unenforceable, because it was not in writing, contained no penalty clause, and in addition, the consent of the Housing Committee was a condition precedent before any action could be brought. However, Counsel for the first and second defendant, Mr. Le Cras, agreed that the Court should hear the case as if the consent of the Housing Committee had been obtained, and the Company had refused to pass the necessary contract of the transfer of property to the plaintiff. After hearing the case for the plaintiff, we dismissed the first defendant from the action. Hereafter, therefore, the issues lie between the plaintiff and the second defendant only.

The matters we had to decide were:

1. Was there an agreement to sell the company's property to the plaintiff at all, upon the happening of a future event, i.e., the consent of the Housing Committee

2. If so, what were the terms of that agreement

3. Having ascertained the terms, do they amount to an enforceable contract against the company

4. If they do not, has the plaintiff a remedy in damages

We had the advantage of having before us an agreed bundle of documents, and we are grateful to Counsel for having prepared them as this has made our task considerably easier.

We begin by considering questions 1 and 2; the answers to which are to be found in the evidence. The evidence of Mr. Symes may be summarized thus. After being told about the possible vacancy with the company, he approached Mr. Couch, who confirmed that the company was interested in obtaining managerial staff. Mr. Symes wrote to Mr. Couch on the 23rd August, 1968, giving some information about himself. In that letter there was the following paragraph:—

"I reckon to live fairly well by English standards. My salary is £2,500 p.a. and I get liberal vehicle and general expenses. I own a new four bedroom detached house in the country which I regard as an essential part of my ability to entertain customers in the correct manner . . ."

It was agreed subsequently between the plaintiff and the company, (and whenever we refer to an agreement between the plaintiff and the company, we mean between the plaintiff and Mr. Couch, on behalf of the company), that the plaintiff would advertise for a design engineer. He was not successful and reported to Mr. Couch by letter of the 23rd September, 1968, in which he set down a staffing structure for the company. The plaintiff knew a Mr. Tony Heal, who, like him, was an engineer, but who lived in Bristol and who he thought might be able to join the company in Jersey. The letter of the 23rd September contained a reference to Mr. Heal and to the question of accommodation for the plaintiff and Mr. Heal. The relevant parts of the letter are as follows:—

"If we employed Tony Heal the housing question might also be easier to resolve. Between us Tony and I could put up £5,000 as a deposit on a large £12,000 property and if the Company could convert it into two three-bedroomed houses then we could each meet our share of the mortgage and this would be at about the same rate as we pay at present for our own respective properties which would be ideal.

The loan the Company would require would then only be the bridging loan between the Company purchasing the property and our putting down our £5,000 deposit and taking up a Building Society's mortgage payment. The loan would also need to cover the cost of such reconstruction as would be necessary to divide the property.

I believe you said you were looking at a property in the £12,000 region, can you tell me if you had any success regarding this matter

I am most anxious now that we should get something moving regarding my own position John and I am therefore arranging to send you a rough draft of a contract for you to look through. I am sure that you will appreciate that I need something of this sort to be tied up before I can give in my notice and start work with you.

A further point of interest which you may like to think about is that Tony Heal has some holidays outstanding which he must take before November and he has suggested he would come over and work for you for a week or ten days if you were prepared to pay for the fares and accommodation for he and his wife. If this could be arranged, I would come over for part of the same period with my wife and we could then go into matters in detail and perhaps take a further look at some housing. This visit would obviously give you the opportunity to make your own assessment as to whether Tony is worth the additional expense which would be involved in employing him, although my own mind is quite made up on this question.

Perhaps we can discuss this a little further on the 'phone sometime.

Yours sincerely,

J. H. A. Symes."

Mr. Couch did not reply to that letter, nor had he done so to the earlier one, but the plaintiff was sure that Mr. Couch, who was eager to obtain assistance, agreed with their terms. Mr. Symes sent a draft agreement with the letter of the 23rd September, the relevant part of which is as follows:—

"5. Mr. Symes shall be entitled by way of remuneration for his services to an annual salary of £2,000.0.0. per annum, to be paid monthly on the last Friday of each month and the said salary shall be reviewed by the Board of Directors annually. Mr. Symes shall also be entitled to payments amounting to ten per cent of the first £5,000 and twenty per cent above £5,000 of all net [in the...

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