Court dismisses claim for injunction and damages regarding land division and building interference.

[*128] 1979 September 22

(STAVRINAKIS, P .D .C . AND ORPHANIDES, S.D.J .)

IN THE DISTRICT COURT OF NICOSIA

Costas Zertalis,

Plaintiff,

v.

Despina Markidou and Others,

Defendants.

(Cross-Action No. 4684/72).

Contract - Anticipatory - breach - Unjust enrichment and proprietary estoppel - Assignment of contract - Powers of the Court in case of proprietary estoppel - A . purchasing from B an undivided part from a larger piece of land - And building on the part of the property acquired a bakery with the knowledge and consent of B - A then selling the property to C who converted it into a garage and expended money in extending the building - Transfer cannot be effected without the whole property being properly divided - Division as approved by the appropriate authority cannot be implemented without some interference with the holding of C - C objecting to any interference on the part of the property purchased from A - C claiming against A and B, injunction and damages for unjust enrichment, anticipatory breach of contract and on the principle of proprietary estoppel -' Nature of the obligations undertaken by .the parties to. the contract were not capable of being legally assigned -The threatened interference with C's rights, doubtful -Anticipatory breach not established.; but even if there was such a breach it would not have entitled C to terminate the agreement and claim compensation because alleged breach was not going to the root of the contract - Claim under unjust enrichment and proprietary estoppel premature - C was not dispossessed or threatened with dispossession - He would only be entitled to the Court's intervention if B actually enjoyed an unjust benefit at the expense of C - Injunction not a proper remedy under the circumstances [*129]

G. Mitsides, for L. Papaphilippou, for the Plaintiff.

A. Pandelides, for Defendant 1 .

Chr. Kitromelides, for Defendants 2 and 3.

JUDGMENT

The judgment of the Court was delivered by:-

STAVRINAKIS, P.D.C.: - This action was originally filed by Despina Markidou against Costas Zertalis, claiming an order for the abatement of a nuisance alleged to have been created by the defendant on a piece of land neighbouring the plaintiff's own property. The plaintiff Markidou also prayed for an order, restraining the defendant Zertalis from interfering in any way with her property. The defendant Zertalis, in his statement of defence, raised a cross-action against the plaintiff Markidou joining two other persons as co-defendants in the across-action. The title of the cross -action is now the following:-

Costas Zertalis of Strovolos,

Plaintiff,

and

1. Despina Markidou of Strovolos,

2. Kyriacos Kiliaris of Nicosia,

3. Enomena Artopiia of Nicosia,

Defendants.

On 16.6.76

the claim for nuisance was withdrawn and, thereafter any reference to the capacity of the parties has to be made in the order of the

title of the cross-action. [*130]

What the plaintiff Zertalis claims in his cross-action (hereinafter to be referred to as "the action" unless otherwise indicated) is for an (abridged translation in English) :-

(a) Order of the Court restraining defendant 1 from interfering with the property sold to the plaintiff (part of Plot 466) Plot G S/P XXX/5.E.I;

(b) Order restraining defendant 1 from proceeding to the division of Plot 466 in a manner affecting the part sold to him;

(c) Order directing defendant 1 to transfer and register in the name of defendants 2 and 3, or either of them, the part of Plot

466 which is described in contracts dated 2.10.64 and 26.11.65;

(d) Order directing defendants 2 and 3, or either of them, to transfer and register in the name of the plaintiff 1 the area described in contracts dated 2.10.63, 26.11 .65 and 3.4.69;

(e) Further, and/or in the alternative, damages in excess of £45,000.- for breach and/or anticipatory breach of agreement and/or agreements and/or for unjust enrichment.

FACTS OF THE CASE:

The plaintiff is the registered owner of Plot 466 Sheet/Plan XX/5 situated at Strovolos. By a contract in writing, dated 2.10.64, entered into between defendants 1 and 2, it was agreed that defendant 1 to sell to defendant 2 [*131] for £1 ,600.- part of Plot 466, the extent of which is described in the agreement as follows:-

About 80' ft. frontage, 75' ft. the side at the rear and average depth 80' ft.

By this contract, which is before the Court as Exhibit 3, it was further agreed -

(i) That upon the signing of the agreement, the purchaser, defendant 2, to pay to the vendor, defendant 1, the sum of £1 ,000.- and the balance of £600.- to be paid upon the issue of titles and if, for any reason, there was any delay in the issue of titles for more than 4 months, then the purchaser to be bound to pay interest on any unpaid balance.

(ii) That the purchaser, defendant 2, to have the immediate right to build anything he likes on the property and that the vendors to be obliged to give for this purpose any consent required before the appropriate authorities.

(iii) That anything built on the property by the purchaser to belong to him.

(iv) That the vendor to take all steps for the division of the property and for the issue of separate titles, and

(v) that in case anyone of the contracting parties would break any term of the contract to pay to the other party the sum of £1 ,000.- by way of pre-estimated damages.[*132]

On 26.11.65 defendants 1 and 2 entered into another agreement (Exhibit 4) whereby defendant

1 sold to defendant 2 a piece of land, 40' ft. in depth, forming part of Plot

466 at Strovolos. The price was £750.- agreed to he paid as follows: £150.- by way of deposit paid forthwith, and the balance of £600.- to be paid by monthly instalments of £30.- each as from 1 .1 .66 till final payment. Some of the other terms of the contract were the following:-

Term 3: The purchaser is entitled to effect improvements on the property and entitled also to recover his expenses in case of cancellation of the present agreement.

Term 4: Breach of the present agreement and/or of any term thereof by any of the contracting parties give the right to the other to claim damages.

Term 5: Transfer of the property to be effected within one month after the termination of the present emergency situation (Παρουσών Εκτάκτων Συνθηκών), the cost of transfer to be borne by the purchaser. The vendor is obliged to transfer the property free from any encumbrances.

Defendant 2 built on the property, the subject-matter of the above two contracts (Exhibits

3 and 4) a bakery. In 1969, there was. an agreement (Exhibit 2) between the plaintiff and defendant 3 whereby the latter agreed to sell to the former the property known as "Φούρνος του Κοιλικάρη" for £6,500.- plus the transfer of a field at Kythrea, belonging to the plaintiff. Term 3 of this agreement reads as follows: "The transfer of [*133 ] the above property and the payment of the aforesaid sum shall take place as soon as the title of ownership of the above property of defendant 3 is ready". The plaintiff took possession of the property and converted the building standing thereon from a bakery into a garage.

The history of the property in question and the buildings standing thereon, is as follows (see evidence of D.W.2, Sofroniou, secretary of the Improvement Board of Strovolos). In connection with this property there are with the District Officer two files: (a) D22/71 (Exhibit 12) and (b) B289/64 (Exhibit 13). File D22/71 contains all the" documents connected with an application for the division of Plot 466 into building sites and has nothing to do with the buildings standing thereon. The application for division was made by defendant

1 on 13.1.71 but it was not approved; later on, a second modified application was made which was approved, on 15.1.72. The relevant division permit was issued subject to 14 conditions. The validity of the permit was for -one year. The work for the division had started but a problem arose with the implementation of Condition 'E' of the permit, according to which pavements 6'6" on both sides of the road had to be constructed. Defendant 1 sent to the District Officer a letter dated 19.11.75 applying for a relaxation of the condition so-that the pavement on the south-western part of the property be 3' instead of 6'6" and this on account of the existence of buildings abutting the pavement which had to be made in accordance with the permit. The District Officer, by a letter dated 30.1.76, informed the applicant [*134] that the relaxation could not he granted. Eventually, on 8.6.79, a final approval certificate was issued for the division for which the permit was issued on 15.1.72. The approval certificate is to the effect that the work has been carried out satisfactorily and according to the approved plans.

File B289/64 contains applications for building permits in relation to the subject property. On 27.11.64 defendant 1 made an application for a permit to erect on Plot 466 a building, consisting of ground and first floor. The application was accompanied by plans according to which the ground floor was to be used as a bakery. The appropriate authorities requested the plaintiff to submit amended plans so as to comply with certain conditions contained in the letter dated

1.5.65 (Blue 10 in file). On 2.7.65 the applicant-defendant 1, submitted amended plans and finally on 6.12.65 Permit No. E0775 was issued for the building of a bakery and two apartments on the first floor. The name of defendant 2 appears on Blue 22, a letter dated 16.10.68 in the file, which is the report of a building contractor. On 18.4.69 defendant 2 applied to the District Officer for the issue of a building permit, apparently meaning final approval certificate, so that he could proceed with the division of the property he purchased and its transfer in his name. A similar application was made by defendant 1, dated 7.4.69 (Blue 25) in which she states that all contraventions have been removed and that all ovens - not just the ones which were built contrary to the permit - have been demolished. After that, the matter was referred to various [*135] departments for their views. Blue 29 is the report of the Senior Inspector of Factories, dated 29.12.70. It is a letter addressed to the District Officer and is headed, "Application for building permit (Garage) - Applicant, Despina Nicolaidou". Blue 30 is the report of the Fire Service, dated 11.1.79. According to the report, the building under inspection was being used as a garage and car-paint shop.

On 4. 8. 70 defendant 1 sent a letter to the Improvement Board of Strovolos in which she reports that the garage of Kyriacos Kiliaris operates without a permit and that a nuisance is created by the placing of old cars and other scrap iron. On

31.3.71 a receipt was issued in the name of defendant 1 for £20.- fees for the issue of a building permit and on the same day a building permit was issued again in the name of defendant 1. According to para. 8 of the permit, the buildings were to be used as a garage and a car-paint shop.

The plaintiff, by his letter dated 29.11 79, applied to the District Officer for a certificate of final approval. The letter is signed by him for defendant 1. The certificate applied for, was not granted on the ground that there was a nuisance on the property and he was called upon to remove same.

On 19.2.73 an approval certificate was issued for the ground-floor building only. The plaintiff, in July 1975, addressed a letter - this time in his personal capacity -to the District Officer for the renewal of the building permit relating to the first floor, and on 4.9.75 the building permit was renewed in the name of defendant 1. [*136]

PLAINTIFF’ S LINE:

The plaintiff’ s complaint is -

- That, to the knowledge of defendant 1 he purchased the property from defendant 2 to whom defendant 1 had earlier sold the same piece of land.

- That he converted the existing buildings into a garage.

- That he built the first floor.

- That defendant 1 took steps for the division of Plot 466 in such a manner so that the area sold to him as well as the existing building were detrimentally affected.

- That the steps so taken by defendant 1 and the action under its original title filed by defendant 1, constituted breach and/or anticipatory breach of the agreement.

- That, if the property is not transferred in his name, he will suffer damage in excess of £45,000.-.

The plaintiff based his claim against defendant 1, on proprietary estoppel, unjust enrichment and breach of contract.

LINE OF DEFENDANT NO.1 :

The line of defendant 1 is, that in the first place there is no privity of contract, and in the second place she denies that the steps which she had taken for the division of the property interfere in any way with the property possessed [*137] by the plaintiff. It is also averred that, if the plaintiff has any cause of action, it should be against defendants 2 and 3 only.

It was argued on behalf of defendant 1 that the contract where by the plaintiff purchased the property was between him and defendant 3 and there appears no connection between defendant 1 and defendant 3. It was further alleged that the plaintiff proceeded to the issue and implementation of the building permit obtained in the name of defendant 1 without the latter's knowledge or consent. But perhaps the gravamen of the case of defendant 1 is that there is no privity of contract between her and the plaintiff and, further, even if it is found that there was an implied agreement between them, yet such an agreement is without consideration.

Finally it was argued that a notice served on her by defendants 2 and 3, purported to be a third-party notice, does not operate as such as the procedure of third-partying a person had not been complied with.

LINE OF DEFENDANTS NO. 2 AND NO. 3:

They generally aver that they do not object to the transfer of the property in the plaintiff's name provided that defendant 1 transfers in their name the property, as agreed. Also they deny that the claim of the plaintiff for compensation concerns them in any way. It is further contended by defendants 2 and 3 that the plaintiff, at the time of the purchase, knew that what he was buying was merely the contractual rights defendant 2 had from defendant ,1 , and that since no titles were issued and since defendants 2 and 3 were not in any way [*138] negligent in the issue of the titles, the action against them is unfounded and immature. Also it was pointed out that defendants 2 and 3 assigned their rights under the contract and from that moment they dropped completely out of picture particularly since defendant 1 accepted the assignment and the plaintiff as a purchaser. It was further said that the plaintiff, in the circumstances of the case, is estopped from disputing the plaintiff's rights invoking for this purpose the operation of proprietary estoppel.

MAIN FACTUAL ISSUES IN DISPUTE:

These, in short, are the facts of the case as presented and argued before the Court. The facts are mostly admitted or beyond dispute. The main disagreement relates to the denial of defendant 1 that -

(a) She had knowledge of the assignment and/or of the plaintiff's rights to possess the property.

(b) That she was making applications for the issue of "building permits on behalf of the plaintiff, and

(c) That the plaintiff suffered any damage end even if he did, his right is only confined to £1,000.-, the agreed amount stipulated in the original contract.

As to the first issue in dispute, we have no difficulty in finding that defendant 1 knew about the change in possession and the plaintiff's rights soon after the plaintiff moved into the property. She was living quite near the place and could see the happenings on the subject [*139] property. When defendant 2 assumed possession of the land he proceeded to build a bakery, and he did so, with the consent and active help and participation of defendant 1. Then, a new person moved in and the building was converted from a bakery into a garage. There was no protest on her part and the only action she had taken was to complain about a nuisance alleged to have been created by the plaintiff on the land. On this, we accept the evidence of the plaintiff to the effect that defendant 1 was often visiting him at his place of business discussing with him matters connected with the property. In fact, we find, having regard to the evidence before us, that defendant 1 accepted the plaintiff - the person who had stepped into the shoes of defendant 2 - as the new owner. This is strengthened by the fact that she invokes the compensation clause of the contract between herself and defendant 2 as a weapon against the plaintiff's claim for damages, which is an ex post facto indication that she never really disputed the plaintiff's rights. So, the situation is as follows:-

(1) Defendant 1 sold part of plot 466 to defendant 2.

(2) Defendant 2 built on the property a bakery with the active consent of defendant 1.

(3) Defendant 2 went into partnership and defendant 3 was formed, and the property purchased by defendant 1 was thus put into the assets of the partnership.

(4) Defendant 3 sold the property acquired from defendant 1 together with everything standing thereon to the plaintiff. [*140]

(5) The plaintiff moved into the property and converted the bakery into a garage.

(6) Defendant 1 learned and must have known before the institution of the present action as to the change of ownership but did not make any complaint or protest, either to defendants 2 and 3 or to the plaintiff.

(7) In 1972 defendant 1 flies Action No. 4684/72 for nuisance against the plaintiff.

(8) The plaintiff, in his turn, files a cross-action against defendant 1 for orders preventing defendant 1 from interfering with the property and for damages on the ground of breach and/or anticipatory breach of a contract.

(9) So far, no titles for the property have been issued. Steps have been taken by defendant 1 for the division of plot 466 and the issue of separate titles, but the authorities imposed certain conditions interfering with the building standing on the property and the plaintiff does not consent to ceding part of the property to facilitate so the issue of titles.

(10) Defendant 1, late in 1978, files an action against the plaintiff, claiming a declaration that she is entitled to terminate the agreement entered into between herself and defendant 2 on payment of the compensation of £1,000.- stipulated therein. [*141]

Having the above skeleton facts in mind, together with the arguments advanced, we find it necessary to examine first the relationship between the plaintiff and defendants 2 and 3 as well as any cause of action existing between them, before we examine the relationship as between the plaintiff and defendant 1.

RELATIONSHIP AND CAUSES OF ACTION BETWEEN PLAINTIFF AND DEFENDANTS NO. 2 AND NO. 3:

Defendant 2 bound himself contractually with defendant 1 in the purchase of a piece of land which, to his knowledge at the time of contracting, was forming part of a larger undivided plot. The transfer of the property would have taken place as soon as the titles were ready and it appears from the contract (Exhibit 3) that the likelihood of a delay in the issue of titles was within the contemplation of the parties. A year later, defendant 2 purchased from defendant 1 an additional part of Plot 466 the transfer of which would have taken place within

one month after the termination of the "present emergency situation" (παρουσών εκτάκτων συνθηκών).

In 1969, on the strength of Exhibit 2, defendant 3 sold to the plaintiff the property known as "the bakery of Kiliaris" (Φούρνος του Κοιλιάρη). It is not disputed that what the plaintiff was buying was what defendant 2 had bought himself by virtue of the two contracts with defendant 1 (Exhibits 3 and 4).

According to Exhibit 2, the transfer of the property would have taken place as soon as the titles of ownership were [*142] ready. So, from here onwards, defendants 2 and 3 dropped out of the picture and the rights of defendant 2 were taken over by the plaintiff. Defendant 1 was not consulted about the sale of rights of defendants 2 and 3 to the plaintiff but according to the evidence, defendant 1 , by her subsequent conduct, did not manifest any contrary feelings about the change of hands. It is worth noting that in Exhibit 2 -the agreement between defendant 3 and the plaintiffno reference at all is made to the contracts between defendant 1 and defendant 2, nor is there any duty cast on defendant 3 as to any steps they or defendant 2 should have taken for expediting the issue of titles.

Exhibit 2 was simply an agreement for the transfer of a property known by a specific denomination containing the surname of defendant 2 as soon as the titles of ownership were ready. There is no indication as to when the titles were expected to be readyon the contrary, judging from the circumstances of the case and the loose manner the "transfer clause" is drafted, it appears that the parties were not contemplating an early occurrence of the event. In fact, they were contemplating a delay. For these reasons, we believe that we cannot apply the rule that when no time is specified "reasonable time" is implied because what would be reasonable in other cases it would certainly not be reasonable in this case particularly since the issue of titles was dependent on contingencies some of which were not entirely within the control of the parties.

So when the plaintiff acquired the contractual rights of defendant 2 he perfectly knew what those rights were and also he must have known of the difficulties or, should we say, [*143] the uncertainty appertaining to the date of transfer. The plaintiff, after moving into the property, took matters in his own hands and in fact it was he who pursued the issue of a building permit, either under his own name or under the name of defendant 1, without there being any evidence that the plaintiff ever asked for the assistance or concurrence of defendant 2 or defendant 3 for any of the matters connected with the property after the execution of Exhibit 2.

As far as defendants 2 and 3 are concerned, the contingency upon which their obligation to transfer would operate, had not as yet occurred and any delay or difficulty in the occurrence of such a contingent event was beyond their control. We could have foreseen a contractual liability if they were bound to do something for expediting the issue of titles and which they have failed to do, or if the titles were ready and they have failed to take the appropriate steps to either have the property transferred in their name and then in the name of the plaintiff or have the property directly transferred from the name of defendant 1 to the plaintiff.

None of these events occurred and, therefore, we find that defendants 2 and 3 are not liable contractually or otherwise towards the plaintiff.

RELATIONSHIP BETWEEN PLAINTIFF AND DEFENDANT NO. 1 :

This aspect of the case is the most crucial one and certainly not the easiest one to resolve.

Defendant 1 did not contract with the plaintiff directly but with defendant 2; yet, to the knowledge of defendant 1, defendant 2 sold his rights to the plaintiff and defendant 1 came to know about this transaction for quite some time prior to the filing of' the action without registering, [*144] at any time, any objection either with defendant 2 or with the plaintiff. The first action taken was in 1972 when defendant 2 filed the present action against the plaintiff, claiming an order for the abatement of a nuisance. In the meantime, defendant 1 was taking steps for the division of the property into sites which would have led to the obtaining of separate titles. The authorities rejected the plans as submitted by the applicants and imposed instead certain conditions in consequence of which a new layout was necessary which (doubtful) might have affected to a certain extent the area purchased by the plaintiff. The latter objected to any diminution of or interference with the area he purchased from defendant 3. By that time, he expended money for establishing a garage and made extensions to the existing buildings.

The plaintiff maintains that the new plan for division will interfere with the contractual obligation of defendant 1 towards him and treats this as a breach of contract. Defendant 1, on the other hand, considers the attitude of the plaintiff as unreasonable and unjustified and as resulting in damages to her. The present situation is that of a deadlock: The plaintiff does not accept any interference with the area purchased and defendant 1 cannot obtain separate titles unless she implements the plans and conditions as approved and imposed by the appropriate authorities.

A further question is whether defendant 1 would effect the transfer and register the property in the plaintiff' s name, after she obtains separate titles or would refuse to do so claiming instead compensation for plaintiff's own attitude in the materialization of the division. [*145]

In the light of the above summary of facts the issues falling for determination are the following:-

(A) Was there a legal binding assignment of the rights of defendant 2 to the plaintiff?

(B) If not, whether defendant 2 is estopped from disputing the plaintiff' s rights.

(C) Whether there is a breach of contract or a violation of the plaintiff' s rights.

(D) If so, what are the remedies of the plaintiff?

(A) - ASSIGNMENT OF CONTRACT;

The relevant sections in our law dealing with assignment or acts resembling assignment are sections 40, 37 and 62 of the Contract Law, Cap. 149, which are identical in every respect with the same sections in the Indian Contract Act from which our Contract Law was borrowed. We shall take first, section 40(1) It provides about personal performance of the contract by the promisor if it is so agreed. [*146]

The facts of the case at hand do not impose any personal obligation for the performance of the agreement. It is a sale of immovable property and the obligation of the purchaser is to pay the money, there Toeing no obligation that only his money would he good enough for the purchase of the property and nothing else.

We then go to s. 62(1) which provides about novation of contract and the mutual rescision or alteration. In this case we are only concerned about novation which should be distinguished from assignment. It is so stated in Dutt on Contract, 4th edition, at p. 519, and further down, it is also stated that "The section is but a legislative expression of the Common Law of England": and it goes on to define novation;

"Novation is a term derived from the Civil Law and it means that there being a contract in existence some new contract is substituted for it either between the same parties or between different parties, the consideration being the discharge of the old contract". [*147]

And further down,

"In a suit based on novation of a contract a plaintiff must prove (1) the existence of the liability under the original contract, and (2) the extinguishment of that liability by the new contract. The essence of novation of a contract lies not in the dissimilarities of the terms between the old contract and the new, but in the intention of the parties to supersede the old by the new. Novation of a contract implies a fresh contract directly or by implication in place of the original contract. The acknowledgement of liability does not amount to a novation…”.

The facts of the present case do not amount to a novation. The original contract with defendant 2 still subsists and the plaintiff merely for consideration given to defendant 2, he acquired the latter's rights. There was a mere change of parties and not an extinction of the original contract. In fact, when the sale of rights was effected, defendant 1 was not even consulted; if she accepted the change later on, it does not mean that she impliedly agreed to an extinction of the original contract and the substitution of it with different parties.

So the only section which remains for consideration [*148] is s.37(1). As to what kind of assignments are recognisable by the Indian Contract Act and by our own Law, we read the following from Dutt, supra, p. 370 et seq. :-

"The rules as regards the assignability of contracts in this country is that the benefit of a contract for the purchase of goods, as distinguished from the liability thereunder may be assigned, understanding by the term 'benefit' the beneficial right or interest of a party under the contract and the right to sue for the recovery of the benefits created thereby. The rule is however subject to two qualifications; first, that the benefit sought to be assigned is not coupled with any liability or obligation that the assignor is bound to fulfil, and, next, that the contract is not one which has been induced by personal qualifications or considerations as regards the parties to it". [*149]

Applying the above to the facts of the present case, we must find first what is the beneficial right or interest purported to have been the subject of assignment, and secondly, whether this right or interest is coupled with any liability or obligation the assignor had to fulfil.

According to the terms of the two agreements between defendant 1 and 2, the former agreed to sell and the latter agreed to buy a piece of land for a specific amount The payment was not to be effected fully until the vendor could transfer the property; so the purchaser would have had a right to the transfer of the property upon payment of the purchase price in full. And the question is whether this contingent right is a beneficial interest capable of being transferred. To answer this, we must consider the reverse aspect of the case, that is the right of the vendor under the contract. Could defendant 1 transfer her right, to collect the money, to somebody else? The vendor's right would have been in the nature of a debt due to her and, therefore, it would have been easier to treat it as assignable but even so it would have been a right coupled with an obligation on her part to transfer the property, and this obligation would render her right to collect the money not assignable. The right of the purchaser is even less hard to conceive as assignable. It is not in the nature of a debt but even if this does not in itself render it unassignable, the obligation of the vendor to pay the purchase price upon transfer make it so. Further, and in addition to the above, a look at the contract between defendant 3 and the plaintiff, shows [*150] that the original purchaser was selling something more to the plaintiff than what he, himself, had acquired from defendant 1. The plaintiff did not buy a bare piece of land but a piece of land with buildings on it and which the original purchaser had erected with the consent and active assistance and participation of the vendor. Another striking aspect of the contract between the plaintiff and defendant 3 is that no mention at all is made therein as to the rights of the vendors (defendants 2 and 3 under the original contracts). In fact, the contract was not made directly between the plaintiff and defendant 2, but between the plaintiff and defendant 3, a partnership in which defendant 2 was one of its members.

By virtue of the said contract (between the plaintiff and defendant 3), the purchaser (the plaintiff) would have been entitled to registration of the property when the vendor would have been ready to transfer the property on her part and the purchaser on his part would have fulfilled the agreed consideration for the purchase which was partly in money and partly the transfer of a piece of land at. Kythrea. It is clear from a mere perusal of the said document that the vendors undertook a personal responsibility for the transfer of the-property as soon as they had a title and they did not just assign their rights to registration to the purchaser, the' plaintiff.

For all the above reasons, we find that no assignment was effected, either in substance or in form, by the contract entered into between the plaintiff and defendant 3. [*151]

(B) - ESTOPPEL AND PLAINTIFF'S RIGHTS AS AGAINST DEFENDANT NO.1:

The proprietary estoppel which is invoked by the plaintiff as an alternative foundation of his claim is expounded in Snell's Principles of Equity, 26th edition, at p.629 et seq. The right arose where a person incurred expenditure under a mistaken belief that he is entitled to do so and such belief was encouraged by the conscious silence of another person who had a right to object. In such a case and provided that there is no contravention of any statute the Court may enforce the right in many ways and as Snell states, "The doctrine displays equity at its most flexible". The plaintiff in this case alleges that he incurred expenditure of many thousands of pounds to the knowledge and with the consent of defendant 1 and, therefore, even if he did not contract with her she cannot now dispute his rights and take advantage of all the expenditure he incurred in developing the property.

Having examined the position created after the plaintiff took over possession of the property, we arrived at the conclusion that the whole attitude of defendant 1 was such as to encourage the plaintiff in incurring expenditure over and above the amounts already paid to defendants 2 and 3 for the purchase of the latters' rights. One is, of course, tempted to say that the doctrine may not be applicable because it is doubtful whether defendant 1 was entitled to object to the transaction between the plaintiff and defendants 2 and 3 and, therefore, one of the prerequisites for the operation of the doctrine is missing. Nevertheless, if we were to follow this scholastic reasoning, we would be converting flexible equitable principles into rigid rules for which[*152]equity itself was invented and is intended to avoid. Moreover, we feel that the dubious rights of defendant 1 to object,brings the operation of the doctrine closer to reason and is stronger than if she really had a definite right to object. However, irrespective of whether the right to object is a necessary -prerequisite in the setting into operation of the doctrine it is nevertheless of importance to ascertain the rights of the plaintiff and the stages at. which such right to object, if existent, could be exercised; we perceive at least two, if not three, stages at which the objection could have been raised.

The first stage is the taking over of possession by the plaintiff following the contract he had entered into with defendant 3. It is doubtful whether defendant 1 could have objected to the transaction; her interest was a contractual one consisting in the collection of the balance and then, in her turn, transfer the property in the name of defendant 2. If she was in a position to transfer the property, she could not legally have objected to the transfer being effected in the name of any other person defendant 2 would like to indicate, once defendant 2 had fulfilled his part of the bargain.

The second stage is when the plaintiff converted the bakery into a garage. At this stage she could perhaps have objected on the ground that the use of the land was injurious to other neighbouring property belonging either to her or to other persons, and that such noxious uses were excluded by the terms of the contract with defendant 2. [*153] Again we feel that this is doubtful as no such restrictions were included in the contract. If there was a use which was causing or was likely to cause a nuisance she could have objected to that; in fact she did so once by reporting the plaintiff to the authorities. However, she objected not in her capacity as a vendor but as a neighbourer and she could have complained and reported the plaintiff even if she was not the registered owner of the property.

The third stage is when the plaintiff started building on top of the garage. This occurred after the difficulties as to the division of the property came to the surface. She could not divide the property without an interference with the extent of the property the plaintiff had bought, and the plaintiff, in his turn, would not yield to a relaxation of his rights which he acquired from defendant 3. In this respect, it may be doubtful if the plaintiff can recover his expenses by putting more money in the development of the property since by that time he knew that there was a difficulty in the obtaining of a title, a difficulty which could however be surmounded by a relacation of his right with or without compensation. However, the matter has not been discussed before us and, therefore, we cannot speculate.

With the above outline of the situation and the remarks made in that connection, we must now see what are the plaintiff's rights, how they are threatened and how they can be safeguarded.

In the first place, the plaintiff had acquired the rights of defendant 2 under the contracts he had entered [*154] into with defendant 1. He could, as a last resort, enforce these rights using the name and assistance of defendant 2 with whom defendant 1 bound herself contractually. Therefore, in case of breach he could have claimed from her what defen­dant 2 could have claimed under his contract.

In the second place, the plaintiff proceeded to convert the premises standing on the property from a bakery into a garage and then build on top residential apartments. This was done to the knowledge of defendant 1 who did not object or at least by her attitude created the impression to the plaintiff that she had no strong feelings about it.

Concluding this topic, we find that the plaintiff is estopped from denying the plaintiff' s rights:-

(a) Under the contract he had with defendant 3, and

(b) to obtain compensation for the additional expenditure he had incurred up to the moment the difficulties regarding the division of the property arose, and which expenditure the plaintiff had incurred with the knowledge and tacit, if not expressed approval of defendant 1.

Regarding the expenditure after the plaintiff came to know about the impediment in the obtaining of titles, we are of the opinion that the doctrine of proprietary estoppel does not operate in plaintiff's favour, for the simple reason that such expenses were not incurred in consequence of any erroneous impression for which defendant 1 was responsible. [*155]

(C) - BREACH OF CONTRACT:

It is a fact that before the corss-action was filed no steps were taken by defendant 1 to evict or dispossess or curtail in any substantial way the plaintiff's full enjoyment of the property. We say "substantial" because, according to the allegation of the plaintiff, defendant 1 by trying to effect the division of her property, in consequence of which part of the property possessed by the plaintiff would be affected, amounts to a breach of her contract regarding the extent of the property sold. As to whether this amounts to an anticipatory breach entitling the plaintiff to rescind the contract is a question which, owing to the peculiarities of the case, presents many difficult problems. In this connection, we shall first examine the nature of the rights flowing from an anticipatory breach, and secondly, whether the nature of the interference contemplated by defendant 1 in implementing the conditions imposed by the appropriate authorities for the proper division of the property is a breach, and if so, whether it is a breach of a condition or of a warranty.

The right to rescind was stated by Lord Porter in Heyman v. Darwins(1)(1) in the following terms:-

"The three sets of circumstances giving rise to discharge of contract are tabulated by Anson as (1) renunciation by a party of his liability under it; (2) impossibility created by his own act; and [*156]

(3) total or partial failure of performance. In the case of the first two, the renunciation may occur or impossibility be created either before or at the time of performance, in the case of the third it can occur only at the time or during the course of performance".

From the above, it is deduced that the first two cases mentioned by Snell are really modes of anticipatory breach whereas the. third one is clearly a case of ordinary actual breach.

Lord Diplock in the House of Lords case of Moschi v. Lep Air Services Ltd.(1) , analysing the effect and operation of the anticipatory breach, said:

"My Lords, it has become usual to speak of the exercise by one party to a contract of his right to treat the contract as rescinded in circumstances such as these, as an 'acceptance' of the wrongful repudiation of the contract by the other party as a rescission of the contract. But it would be quite erroneous to suppose that any fresh agreement between the parties or any variation of the terms of the original contract is involved when the party who is not. in default elects to exercise his right to treat the contract as rescinded because of a repudiatory breach of [*157] the contract by the other party. He is exercising a right conferred on him by law of which the sole source is the original contract. He is not varying that contract; he is enforcing it.”

"It is no doubt convenient to speak of a contract as being terminated or coming to an end when the party who is not in default exercises his right to treat it as rescinded. But the law is concerned with the effect of that election on those obligations of the parties of which the, contract was the source, and this depends on the nature of the "particular obligation and on which party promised to perform it.”

"Generally speaking, the rescission of the contract puts an end to the primary obligations of the party not in default to perform any of his contractual promises which he has not already performed by the time of the rescission. It deprives him of any right as against the other party to continue to perform them. It does not give rise to any secondary obligation in substitution for a primary obligation which has come to an end. The primary obligations of the party in default to perform any of the promises made by him and remaining unperformed likewise come to an end as does his right to continue to' perform them. But for his primary obligations there is substituted by operation of law a secondary obligation to pay [*158] to the other party a sum of money to compensate him for the loss he has sustained as a result of the failure to perform the primary obligations. This secondary obligation is just as much an obligation arising from the contract as are the primary obligations that it replaces (see R. v. Ward Ltd. v. Bignall).”

"Although this is the general rule as to the effect of rescission of the contract on obligations of which it was the source, there may be exceptional primary obligations which continue to exist not withstanding that the contract has been rescinded. These are obligations that are ancillary to the main purpose of the contract - which is, of course, that the parties should perform their primary obligations voluntarily. Mutual promises to submit to arbitration disputes arising as to the performance by the parties of their other obligations arising from the contract may be expressed in terms which make it clear that it was the common intention of the parties that their primary obligation to continue to perform these promises should continue notwithstanding that their other primary obligations had come to an end (Heyman v. Darwins Ltd.)".

But not every inability or manifested inability to perform amounts to a repudiation of the contract. The breach must be such as to go to the root of the contract, otherwise [*159 ]the innocent party may not elect to treat it as discharged before the time fixed for performance.

Lord Blackburn(1) had this to say on this topic: "The rule of law as I always understood it, it is that where there is a contract in which there are two parties, each side having to do something, if the failure by the one party to perform anyone part of it goes to the root of the contract, goes to the foundation of the whole, it is a good defence for the other party to say: 'I am not going on to perform my part of it when that which is the root of the whole and the substantial consideration for my performance is defected by your misconduct ".

In Maple Flock Co. v. Furniture Products(2) (a sale of goods case) it was said that the main tests in determining whether there is a violation of s.31(2) of the Sale of Goods Act, 1893, are:

"First the ratio quantitatively which the breach bears to the contract as a whole, and secondly the degree of probability or improbability that such a breach will be repeated".

In the same case it was further said that;

"The true test which generally be not the subjective mental state of defaultive party but the objective test of the relation, in fact of the default to the whole purpose of the contract". [*160]

The following excerpt from Halsbury' s Laws of England, 4th ed., paras. 542-543, illustrates the distinction between conditions and warranties, a distinction which is of importance in determining the right to elect termination of a contract:

"Para. 542 - Conditions and Warranties: The predominant modern approach is to consider the nature of the terms of the contract in order to decide whether these terms are conditions or warranties. Prima facie a breach of condition entitles the innocent party to rescind the contract and claim damages for any loss he may have suffered whereas a breach of warranties entitles him to breach of damages ...."

"Para. 543 - Criteria for distinguishing between conditions and warranties:

Where the contract says no indication on its face of the statutes of the terms, the Court must look at the contract in the light of the surrounding circumstances in order to decide the intention of the parties… Important factors to be taken into consideration are the extent to which the fulfilment of the term would be likely to affect the substance and foundation of the adventure which the contract is intended to carry out and whether the obligation arising from the term goes so directly to the substance of the contract that its own performance may fairly be considered as a substantial failure to perform the contract at all". [*161]

From Halsbury's Laws of England, 4th ed., Vol. 9, para. 451 , the following passage illustrates the position of a complainant when he is responsible himself of an impossibility of performance which he uses as a platform for affecting the subsistence of a contract;

"The doctrine of frustration is in all cases subject to the important limitation that the frustrating circumstances must arise without fault of either party. The defence of frustration can therefore he defeated by proof of fault, and the burden of proof of fault lies upon the party alleging it. Deliberate choice either not to perform or to put performance out of one's power will certainly be fault within this rule; but it does not follow that in all contracts any act of negligence will deprive a party of the protection of the doctrine of frustration".

We have seen that 'defendant 1 is not entitled to dispute or ignore the plaintiff s rights which arose from the contract defendant 2 had with defendant 1 . If we may describe this right of plaintiff as an implied direct contractual right with defendant 1, we can then, more easily, analyse the terms of the contract defendant 1 had with defendant 2 as applicable and enforceable by the plaintiff and then see whether there is a breach and if so whether the said breach entitles the plaintiff to treat the contract as repudiated.

The plaintiff bought a piece of land with certain buildings standing on it. The extent of the property, as [*162] calculated by Mr. Patrikios, the expert valuer called by the plaintiff, is 9,480 sq. ft. The extent is not specified in the contract but only the dimensions of the property are given and these are even stated approximately. In both contracts (Exhibits 3 and 4) there are clauses (which are not similar) providing for payment of compensation in case of breach without there being a clause providing for the right to repudiate the contract in case of a breach. The breach complained of by the plaintiff is that the extent of the property would be diminished if defendant 1 proceeds and implements the division of the property as approved. by the appropriate authorities.

P.W.3, Panayiotis Argyrou, prepared a sketch showing the property the plaintiff had bought and also showing the division line which, according to the division permit it should be followed. According to the evidence, if the division is implemented as approved, only a small part of the property would be affected and this would consist in the rounding of a corner and the making of a pavement. The extent of this area is very small in proportion to the area purchased, particularly since there is no evidence that the said deduction would in any way or at least substantially affect the existing buildings and the general enjoyment of the property by the plaintiff.

So, if this is what the plaintiff considers as a breach, we must say that objectively looking at it, his objection is unreasonable. It is not the sort of breach - if it really amounts to a breach - that would strike at the root of the contract. If there is a breach, then the plaintiff may be [*163] entitled to damages for getting less than what he had bargained for but again we must have specialised evidence as to how much the property would he affected if the conditions of the division permit, are implemented. Unfortunately we have no such evidence. What we have, is a speculation as to what the plaintiff would lose if he is evicted, but so far he has not been evicted and his position is not in any way endangered at present. It is in evidence that defendant 1 sued the plaintiff, claiming a declaration that he is entitled to repudiate the agreement (Exhibits 3 and 4), but this again was filed during the pendency to the trial of the present action and in any event the outcome of the said action is not as yet known. We must examine the facts as existing, at least up to and as covered by the pleadings and not by reference to facts which came into being after and during the trial. However that may be, defendant 1 never tried to dispossess the plaintiff. She did not transfer the property in his name because she was unable to obtain a separate title and this by reason of the plaintiff's own intransigence.

For the above reasons, we find that the plaintiff was not entitled to treat the contract as repudiated hut ought to have waited for its performance, the time for which had not as yet matured; it may be mature when there is a substantial breach on the part of defendant 1 as by an action to have him dispossessed or when defendant 1 is ready but refuses to transfer the property in his name either as agreed or fractionally less. Also we find that the plaintiff cannot invoke the doctrine of unjust enrichment mainly because he is still in possession and defendant 1 [*164] has not as yet obtained an unjust benefit of the developments effected on the land by the plaintiff.

(D) - REMEDIES OF THE PLAINTIFF

In view of the aforementioned findings, this question becomes theoretical but non-the-less we consider it pertinent to deal with it in a summary way.

Firstly, it can be said without any reservation that for as long as the plaintiff is in possession he cannot obtain any compensation because he suffered none. His right to compensation will arise when he is dispossessed or at least his possession is in peril. At present his right is not endangered despite the filing of Action No. 4021/78. The result of that action is not as yet known and such result may play an important role in the formulation of the plaintiff's rights. The plaintiff's claim is based on a quasi-contract but since defendant

1 has not as yet derived any unjust benefit at the expense of the plaintiff, the latter cannot remain in possession and also collect compensation. He could perhaps opt to terminate the contract, collect his compensation and deliver vacant possession. But this he cannot do at his own instance because, as we have already seen, the alleged breach on the part of the defendant is not a breach going to the root of the contract provided, of course, that what the plaintiff complains of is really a breach. It could perhaps be argued that whilst defendant 1 was giving evidence, he stated that he would not transfer the property even if she had a separate title for the subject property. But to her refusal there is a qualification. As she said, she will not effect the transfer unless she is compensated [*165] and if she is really entitled to compensation "by reason of the plaintiff' s own behaviour, then her refusal may be justified. This, however, is a matter which is still pending for determination in the action she filed against him, and the less said about it the better. So, as things are at present, the award of any compensation is premature. If, for the purposes of finality, the compensation is assessed, nevertheless it cannot he awarded without imposing intricate conditions which would render the judgment practically ineffective in execution. Also the assessment of compensation itself would depend on future developments which have not as yet crystallised and any attempt to quantify the plaintiff' s loss will he a venture into the future. We do have some evidence as to the prospective loss of the plaintiff but the assessment has to be made as on a certain date and that date is not as yet clearly known. This being so, any assessment would be too hypothetical and perhaps alternative assessments will have to be made.

The powers of the Court in exercising and applying equitable principles are very flexible and in case the plaintiff is threatened with dispossession the Court can do many things in order to safeguard his interest.

The following passage from Snell Principles of Equity, 26th ed., p. 632, illustrates clearly the freedom of the Court in enforcing equities. It is headed ''Enforcement of the equity " and it reads:-

"(a) Protection: If the equity is established, effect is given to it in whatever is the most appropriate way. 'The equity of the donee and [*166] the estate to be claimed by virtue of it depend on the transaction, that is, on the acts done, and not on the language of the memorandum, except as that shews the purpose and content of the gift’. Often it suffices merely to restrain O from enforcing his rights, as by dismissing his claim for possession of the land, or restraining him from exercising a right to cut down trees and so destroy the beauty of improvements made by his tenant in which he acquiesced, or preventing him from obstructing ancient lights altered by A with O’ s acquiescence. And if A has powers of compulsory acquisition, equity, while protecting him from eviction, may leave him to exercise those powers.

(b) Conferment of title: The doctrine has, however been carried beyond any mere use of an estoppel by way of defence. Thus if O has made an imperfect gift of the land to A, as by merely signing an informal memorandum or uttering words of abandonment, the court will compel O to perfect the gift by conveying the. land to A. In such cases the court may act by analogy with the specific performance of contracts: A's expenditure with O's knowledge plays the part both of valuable consideration and of part performance. If the circumstances do not suggest a gift, O may be compelled to convey the land on being paid its value. Or the circumstances may indicate that A is to have a lease, a perpetual easement, a perpetual licence or a licence as long [*167] as he desires to use the premises as his home; and a lessor may he compelled to grant a licence to assign. Alternatively, A may he given an equitable lien on the property for his expenditure, or for the value of his improvements, and in such a case he will be treated as a mortgagee in possession. Or it may appear that A has already had 'sufficient satisfaction' for his expenditure, and so is entitled to no relief. The doctrine thus displays equity at its most flexible".

By way of example and without in any way expressing any binding opinion, we may say that if there is an action for eviction the Court can refuse the order or condition it upon the payment of .any compensation that the Court may assess for the plaintiff's loss as a result of the eviction. At present no such order is asked and no such order can he made, and certainly, we cannot give judgment for any amount in favour of the plaintiff conditionally upon delivery of vacant possession.

The other prayers of the plaintiff are, (a) for injunction restraining defendant 1 from interfering in his property, and (b) for an order directing the transfer of the property in his name.

According to the evidence, there was no interference but only a threatened one to the extent and for the purpose of implementing the conditions imposed by the appropriate authorities in issuing the division permit. A particular peculiar aspect of this case is that if defendant 1 is prevented from complying with the conditions of the division permit the property would remain undivided perhaps for ever without [*168] separate titles and, therefore, without any prospect for the plaintiff ever to obtain a registration even for fractionally lesser extent of the property than the extent he actually bought. Also defendant 1 will suffer, by the issue of such order, substantial damages. At the same time, the Court cannot order the transfer and registration of the property in the name of the plaintiff not just because the provisions of the Sale of Land (Specific Performance Law), Cap. 232 as amended by Laws 50/70 & 96/72 would be violated but also because such an order would contravene the conditions of the division permit. Here we have a breach, if really there is one, which can be remedied by compensation and for such compensable breach to order an injunction with such far reaching consequences would he disproportionate to the wrong it purports to remedy if, of course, a wrong has been committed actually against the plaintiff; by the issue of an injunction finality will not he attained but on the contrary it will perpetuate the deadlock and the parties' difference for an indefinite period of time. So, we feel that neither the order for registration nor the restrictive order sought can be issued. Finally we must say that the restrictive order must operate on a clearly defined extent of land and should not be general, otherwise problems may arise later on in relation to its enforcement. Right now, we do not know if by the implementation of the conditions contained in the division permit the extent of the area purchased by the plaintiff would be affected. It has to be remembered that the extent of the area is not specific in the contracts, only the dimensions as to the frontage and depths are given, but even these are approximate quotations. So, on [*169] a final analysis there may not even be a violation of the plaintiff's rights calling for protection.

We think that the best solution is to leave things as they are, with the parties at liberty to do whatever they are advised is best and if later it can be proved that there is a violation of any right the loss resulting therefrom can easily he ascertained and assessed and the proper orders, compensatory or otherwise, may be issued accordingly.

For all the above reasons, we find that the plaintiff's action cannot succeed and it is accordingly dismissed.

Owing to the perplexity of issues and the conduct of the parties in this multiple transaction and dispute, we consider it only fair not to make any order as to costs provided that this should not affect any orders already made prior to the discontinuance of the nuisance complaint.

In view of the outcome of the action we consider it superfluous to determine the attack made by defendant 1 regarding the third partying of defendant 1 by defendants 2 and 3.

Action dismissed with no order as to costs.

(1) S.40. If it appears from the nature of the case that it was the intention of the parties to any contract that any promise contained in it should be performed by the promisor himself, such promise must be performed by the promisor. In other cases, the promisor or his representatives may employ a competent person to perform it..

(1) S.62. If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed.

(1). S.37(1). The parties to a contract must either perform, or offer to perform, their respective promises, unless such performance,is dispensed with or excused under the provisions of this Law, or of any other Law.

(2) Promises bind the representatives of the promisors in case of the death of such promisors before performance, unless a contrary intention appears from the contract

(1)1942 A.C. 356 at p. 397.

(1) 1972 2 All E.R. 393 at pp. 402-403.

(1) Mersey Steel Co. v. Naylor Benzon & Co., 1881 - 1885 All E.R. Reprint, 365 at p.370.

(2) All E.R. Rep. 1933, p.15.