Landmark victory for developer after buyer could not complete

Sorry if I picked up on some wrong vibes, Jonnie - but talk of "...some hateful over hyped new homes site" DID seem a wee bit anti-buider!

The recent cases, in Ireland and now Scotland, of developers pursuing buyers through the courts is very much a twin-edged sword. Obviously, the developers are wanting these sales to complete, as new buyers will be hard to get (especially at pre-agreed prices that go back several months and in some instances two years or more...). There will be fall-out, of course - "big, bad developer sues poor ickle buyer" type of sho!te - despite the fact that said buyer entered into a supposed legally-binding Contract of their own free will then decided to walk away 'cos it doesn't suit them anymore. Funny how you never saw a SINGLE instance of this behaviour when the market was increasing by a squillion quid an hour...

I don't know whether any change in the current Legal system will happen. I also don't know whether, if it did, it would be exercised by many. Private owner/sellers, for one, would find it I think too costly to instigate.

What do you think, Jonnie - a dead duck before it hatches? The thoughts of you and others would be interesting.

• 13 September 2010 12:04 PM

Peebee – not at all, I have no particularly negative views towards house builders but have many years experience in acting for them (big and small) for sales and land matters………………my issue is with the buyers that want to worm out of deals, not the developers.

No group therapy needed here!

• 13 September 2010 09:56 AM

Jonnie - I sense (cos I'm good like that...) a slight - almost imperceivable, in fact - hostility in your post toward builders.

Care to share? Some group therapy on this site may help...

• 12 September 2010 11:43 AM

Sounds like the argument for not coughing up the completion funds wasnt robust enough?

Anyway - makes no difference to English cases of non completion but might prove a nice result for any Jock builders who manage to get some mug to pay top money then wake up to his / her stupidity.

Funny we never hear about really savvy / nice deals not completing, its always in some hateful over hyped new homes site with a wally of a buyer..................'respectaable couple buying family home in Oxfordshire bottle it after exchaange and throw up a smoke screen of fibs to get out of it" - see, we never read that sort of thing do we?

• 12 September 2010 00:03 AM

Agent Orange - OI! don't you go all William Wallace on us, mate! ;0) Seriously, I think you're reading too much into this. I've read and re-read DP's post; I can't see anything in it that belittles Scotland - He's simply IMO stating that the rest of us shouldn't think that it will be so easy in England. Look at it this way - the Irish have adopted this course of action against those who breach Contracts; Scots have followed suit. I for one sincerely hope that it will only be a matter of time until English Law catches up. A Contract is a Contract - except when buying a house, apparently! Bizarre...

How's things up there, anyway? You've been quiet on here for a while...

• 11 September 2010 09:16 AM

Five paragraphs in, you'll note, Mr Perkins FINALLY lets us know that he isn't an expert in Scots law......

• 10 September 2010 22:52 PM

Well, it's nice to know that this case was 'only' in Scotland, and that it won't 'set a precedent' for England......

Mr Perkins, I'm truly sorry that this cae will not be of "great assistance where buyers in England fail to complete", and hope you find one that does fulfil this criterion for you sometime soon.

• 10 September 2010 19:45 PM

This may sound an interesting case but it is not necessarily as clear cut as it sounds since this is an area of law where English and Scottish law and practice differ significantly.

In a nutshell, a missive is not an English-style contract under another name. A contract contains all the terms of an agreement and both parties have remedies available if the other party defaults.

Missives on the other hand are more a set of mutually agreeable conditions which are met progressively as matters proceed. One condition from the seller's side is to vacate a property prior to the date of entry. On the buyer's side is one to complete the agreed payments prior to entry.

Here the court appears to have ruled that as all the seller's conditions had been met the buyer's default can be addressed by an order for the balance of the agreed price to be paid as compensation.

I am not a lawyer and certainly not a Scottish lawyer but I do not think Scottish Courts can order specific performance. Perhaps a Scottish lawyer-estate agent will care to comment but it does seem to me there was merit in Finlay's argument. If title remained with AMA it could remarket the property. Now the title has presumably passed to Finlay who can sell it on or even negotiate a resale back to AMA - in both cases at somewhat of a discount I imagine.

However the main point I want to make is that Scottish law does not create English precedents, and vice versa. Courts may take them into consideration, where relevant, but this is no binding obligation to do so and some Scottish Sherriffs in particular are easy riled at being invited to consider an English precedent.

In one case in Glasgow I well remember we were tentatively submitting a recent English Court of Appeal decision which struck me as highly persuasive. Accordingly when giving my expert evidence I was led into this case by the Defence Counsel but quickly cut off by the Sheriff. Counsel argued but to no avail.

Okay, we eventually managed to reverse this unfair (in my considered opinion) conviction but only once we reached the Court of Sessions in Edinburgh. And one point about Scottish cases is that acquitted defendants cannot claim costs which after three hearings were way out of proportion to the alleged offence.

I cannot cite a specific example of the English courts following Scottish precedents but I very much doubt whether this case will be of great assistance where buyers in England fail to complete. Here the courts are more likely to order specific performance.

David Perkins

• 10 September 2010 17:36 PM

Quite right, too! About time that vendors exercised their rights when purchasers decide that a legally binding Contract that they freely entered into no longer suis them...

• 10 September 2010 13:49 PM