PROPERTY EXCHANGE

Otago Daily Times, Issue 21356, 9 June 1931, Page 2

PROPERTY EXCHANGE

CLAIM FOR SPECIFIC PERFORMANCE JUDGMENT FOR THE PLAINTIFF Judgmnet was given by Mr Justice Kennedy in the Supreme Court y esterday morning in the case in which Edith Charlotte Simpson proceeded against Alfred Lewis Marshall Smith asking for an order for specific performance of a contract for an exchange of properties, or, alternatively, for damages for breach of contract. At the hearing Mr J. S. Sinclair appeared for the plaintiff and Mr A. G. Neill for the defendant. Hie Honor’s judgment was as follows: The plaintiff produced a document which is in form a contract of exchange signed by the parties and satisfying the Statute of Frauds. The defendant has declined to complete the contract, thereby appearing to be evidenced, and alleged that there was no agreement in writing sufficient to satisfy the Statute of Frauds or at all.

The defendant had a section with a bungalow house at Roslyn, which he was willing to sell or exchange, , and in the company of Rice, a salesman for a Dunedin firm of land agents, he inspected certain properties at Dunedin, and signed an offer to purchase the plaintiff’s property by way of exchange. The plaintiff's property was at Anderson's Bay, and was in the hands of the land agents for sale. Defendant inspected it, but the agent did not then know definitely, if the plaintiff would agree to an exchange. The document produced was that signed by the defendant. It is in the form of an unconditional offer, and is in terms which unmistakably point to legal relations if , accepted. This was taken by Rice to the plaintiff, who, after an inspection of the defendant’s property, accepted the offer. Next morning the defendant, was informed of the acceptance, but he declined to be bound or to recognise any sale. In brief bis evidence was that he never agreed to purchase only the house property, but contemplated a purchase of the house property plus a strip of land adjoining, and when he signed the offer omitting any reference to the adjoining strip he was told, he said, that it was not binding and that a proper signed agreement would be drawn up when the adjoining strip was obtained and when he had had an opportunity of going into figures. When the defendant inspected the property with Mr Rice he was accompanied by his son.’ The three called on a Mr Downie on the way back, when Rice stated it would be a good deal if a strip of adjoining land were to be secured. The defendant, after swearing positively that 20 feet was mentioned at Downie’s receded from that portion when pressed in cross-examination.

Different accounts are given by the father and son and by the land agent particularly in regard to an interview at which the defendant signed the offer for the exchange of the defendant’s and the plaintiff’s properties. On the evidence I am satisfied that the defendant was willing to make an offer by w*ay of exchange for Mrs Simpson’s property prior to the Crucial interview in respect of which the conflict chiefly arises, and in respect of that interview I accept the account of the witness Rice as in substance recording what took place. The unreliability of the father’s recollection, where it could be tested by contemporary documents, was demonstrated and a hesitation evinced both by father and son when asked to recount what they stated took place when the exchange agreement was signed by the father, together with my general observation of their demeanour, has led me, in the conflict of evidence upon this point, to prefer Rice’s. I have not overlooked, in coming to that conclusion, a number of circumstances which counsel for the defendant drew my attention to, and particularly the statements deposed to by father and eon as to what occurred prior to the signing of the offer. The evidence of two witnesses, other than those mentioned, who depose as to observations of the defendant, if... accepted, and I do accept It, supports the conclusion ' readied on h'eitriftg the 1 evidence of the defendant and his son and the witness Rice. From Mr Downing's evidence it appears that Downing was not previously approached by any person to sell part of his land. The defendant said that he had heard from a man whose name he was unwilling at , first to disclose, but afterwards did give, was, he said, “ dead and gone;” that Downing would not sell part of his land. I hold then that, although there had been mentioned earlier of the purchase of a strip, that the offer signed 'was unconditional, and intended so to be, and on the communication of the acceptance, the defendant became bound. If the evidence as to value called by the defendant be accepted, there was with the £l5O practically equality of value. But if the valuation of Mr Ireland be accepted, then the consideration is inadequate to the extent of £2OO. I think that Ireland's valuation is approximately correct, and £2OO. must be taken as representing the value of her bargain to the plaintiff. It was urged that in view of the inadequacy of consideration the remedy by way of specific performance should be refused, and Day v. Newtian (1788), 2 Cox, 77, was quoted in support of this submission. It is true that 'the doctrine of the older cases, of which, in addition to Day v. Newman, reference may be made to Tilly v. Peers, 10 Ves. 301, and Savile v. Savile, 1 P. Wma. 744, was that mere inadequacy of consideration was sufficient to induce the court to refuse the remedy of specific performance. It has now, however, been established that inadequacy of consideration is not in itself a ground for resisting specific performance unless it is so gross as to amount to conclusive evidence of fraud: 27 Ualsbury pp. 41 and 42; Fry on Specific Performance, 6th edm, p. 211, referring to Coles v. Trecothick, 9 Vee. .234; White v. Damon, 7 Ves, 30; Burrowes v. Lock, 10 Ves. 470, and Abbott v. Sworcler, 4 De G. and Sm. 448.

His Honor asked whether the plaintiff desired specific performance or damages. Mr Sinclair said that she asked for specific performance. His Honor continued: There will accordingly be a declaration that the agreement referred to in paragraph 1 of the statement of claim ought to be specifically performed and carried into execution in case a title can be made by the respective parties to the premises comprised therein, and it will be ordered and adjudged accordingly. There will be an order that the following inquiries be made, namely: (1) An inquiry whether a good title can be made to the land comprised in the agreement in the pleadings mentioned and in case it should appear that a good title or titles can be made to the said estates; (2) an inquiry, when it was first shown that such good titles could be made and it is ordered that further consideration of this action be adjourned and that the parties are to be at liberty to apply generally as they may be, advised.