Johnson v. Agnew

1 All. E.R. 883 (House of Lords 1979)

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Nature of the Case

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Facts

By a contract dated November 1, 1973, Seller (S) agreed to sell a house and grazing land to Buyer (B). The purchase price exceeded the amount required to pay off all the mortgages on the land and also a bank loan obtained by S for the purchase of another property. The completion date was fixed for December 6. B paid part of the deposit and accepted S’s title but did not complete the transaction. On December 21, S served on B a notice making time of the essence and fixing January 21, 1974, as the final date for completion of the contract. B failed to complete. On March 8, S sued claiming specific performance and damages or in the alternative a declaration that the vendor was no longer bound to perform a contract for the sale of real property and further relief. A summons was issued for specific performance on May 20, and the order was made on June 27 but was not drawn up until November 26, 1974. During this time action was taken by S’s mortgagees. The lands were taken into possession and sold, and by April 3, 1975, specific performance of the contract was impossible. S took no action on the specific performance until November 5, 1976, when they issued a motion seeking an order that B should pay the balance of the purchase price. That motion was dismissed on the grounds that specific performance was no longer possible. The trial court also held that S was not entitled to damages. S appealed, and that appeal was rejected, but the Court of Appeal held that S could recover damages under the Chancery Amendment Act 1858 which allows a court to award damages in addition to or in substitution for specific performance. The court then fixed a date for damages to be assessed. B appealed.