In the recent Court of Appeal case of Wynn Clons Development Ltd v Cooke,  IECA 317, a vendor claimed specific performance of a contract for sale of a new commercial unit which the purchaser had refused to comply with due to a noxious odour in the property.
When the sale was due to complete, the purchaser inspected the property and discovered a strong smell of diesel. The purchaser’s solicitor, his engineer and the estate agent all confirmed the existence of the noxious odour but scientific tests were not carried out.
The purchaser refused to complete the sale and so the vendor’s solicitors issued a completion notice under the terms of the contract. The purchaser informed the vendor that he was repudiating the contract due to the strong odour of diesel. When the sale did not complete following the issue of the vendor’s completion notice, the vendor put the unit back on the market and retained the contract deposit. The vendor then agreed a sale with a third party which subsequently fell through.
In upholding the High Court’s grant of an order of specific performance for the vendor, the Court of Appeal found that:
- The purchaser had not presented sufficient scientific evidence to prove that there existed a noxious smell which would render the unit unsafe or unfit to entitle him to repudiate the contract for sale.
- By placing the unit back on the market the vendor did not forfeit its right to specific performance. The court held that a vendor is entitled to and perhaps obliged to mitigate his possible losses and that a mere attempt to re-sell the property, where he or she is unsuccessful, does not prevent the vendor from seeking specific performance.
This case therefore clarifies that a vendor will not be penalised for attempting to prevent a purchaser from repudiating a contact while protecting his or her financial position by putting the property back on the market. Furthermore, purchasers must ensure that if they are going to repudiate a contract due to the presence of a noxious odour, that they have sufficient scientific evidence to show that the smell renders the property unfit for human use or habitation to such an extent that the purchaser should be freed from the obligation to perform the contract.Back to Full News
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About the Authors
Fiona is an associate solicitor in the Property team at Hayes solicitors. She acts for clients in the purchase, sale, mortgaging and refinancing of both residential and commercial properties. She has particular expertise in advising receivers and banks in the sale of distressed properties.
Ashley Lewis is an intern in the Hayes Property team.