[2024] EWHC 3625 (TCC)

Mr Horne contends that the language of the contract is such that the payment of the deposit should not be construed as a condition precedent to the exercise of the option. He argues that, if the draughtsman had intended otherwise, he would have included appropriate wording in Clause 8.1 or 8.3 of the contract, whereas Clause 8.3 simply provides that the deposit is to be paid “on the day of exercise of the option”.

Mr Horne points to the Option Notice at Schedule 1 to Option Agreement F, which, he says, makes no reference to how and when the deposit should be paid.

He also refers me to clause 10.1 of Option Agreement F, which incorporates into the contract the Standard Commercial Property Conditions (Second Edition). Clause 10.2 provides that, on the exercise of the option, Part 2 of the conditions will not be incorporated. Mr Horne says that, accordingly, the interest provisions found in the Standard Conditions are not excluded on the exercise of the option. He argues that the reason for this is to allow interest to accrue on a deposit payment not made on time.

Mr Horne asks me to find that, in any event, the Defendants waived their right to payment of the deposit by the actions of their solicitors, Hibberts LLP, who were asked to provide their client’s account bank details but failed to do so and did not take instructions from the Defendants on the issue.

Mr Horne argues that it must have been implicit that the Defendants would do nothing to prevent Mr Lomax from exercising the option during the Option Period. The solicitors’ failure to supply their bank account details constituted a breach of that obligation. The consequence is that either the provision should be interpreted as not being time critical or, alternatively, the Defendants by their actions implicitly represented that the payment of the deposit was not time critical. Either way, on Mr Lomax’s case, the Defendants are estopped from asserting that he has failed to exercise Option F or that he has failed to pay the deposit, when required to do so.

Moreover, Mr Horne notes that Clause 8.3 of the Option Agreement provides that the Defendants’ solicitors were to hold the deposit “as stakeholder”, pending completion. On the basis that they refused to cooperate in the provision of their banking details, the solicitors, in effect, rejected their role as stakeholder.

The Defendants’ case is that the words “on the date of exercise” in Clause 8.3 render the requirement to pay the deposit a condition precedent to the exercise of the option.

Mr Aslett points out that the deposit payment still remains unpaid. A payment was made on Mr Lomax’s second attempt to exercise the option approximately 18 months after he purported to exercise the option for the first time, but Mr Aslett argues that it was out of time in any event.

The Defendants do not accept the factual basis of Mr Lomax’s assertion that they waived the payment of the deposit.