Cooper v Critchley
| Jurisdiction | England & Wales |
| Judge | the MASTER of ROLLS,LORD JUSTICE JENKINS,LORD JUSTICE HODSON |
| Judgment Date | 28 January 1955 |
| Judgment citation (vLex) | [1955] EWCA Civ J0128-1 |
| Court | Court of Appeal |
| Docket Number | 1954, C. No.1294, |
| Date | 28 January 1955 |
[1955] EWCA Civ J0128-1
In The Supreme Court of Judicature
Court of Appeal
The Master of Rolls
(Sir Raymond )
Lord Justice Jenkins and
Lord Justice Hodson.
instructed by Messrs. Church, Adams, Tatham & Co., Agents for Messrs. Willngton, & white (watford), appeared for the Appellant (Plaintiff).
, instructed by Messrs. Mills, Lookyer & Co., for the Respondent (Defendant).
I will ask Lord Justice Jenkins to deliver the first judgment.
In this case the plaintiff, Leslie Charles Cooper, and the defendant, Arthur , are entitled to one half of the issued share capital of a company called Furnishers Limited. That is a company with an authorised capital of £5,000, divided into shares of each, and the parties each hold 250 of the issued shares, the total share capital being only £500.
the parties are also entitled under what, in the old days, would have been a tenancy in common to premises known as35, Market street, , Those premises are under lease to the company, and the company carries on business upon them, the business consisting of selling and dealing in , , floor coverings and such things, partly for and partly on hire purchase terms.
It seems that in or about December, 1953, there were differences between the parties with regard to the conduct of the business; and, in the result, they decided that they had better sever their association. With that object in view, Mr. Cooper wrote to Mr. Critchley on the 17th December, 1953, a letter containing certain proposals for the sale of his interest in the property and his interest in the company - that is to say, his holding of shares in the company, in effect - to Mr. Critchley on certain terns. Those terms were not wholly acceptable to Mr. Critchley. He made a counter-offer end negotiations . Ultimately Mr. Critohley intimated, by his solicitors, to Mr. Cooper's solicitors that he had decided not to go on with his proposed purchase of Mr. Cooper's interest.
Mr. Cooper maintains that whet I have referred to as "negotiations" in fact resulted in a binding contract. Mr. Crltchley, on the other hand, as his breaking off of the negotiations implies, takes the view that there was no binding contract; there were merely negotiations which were terminated before any binding contract was reached.
In those circumstances, Mr. Cooper commenced the present action in the Chancery Division, claiming specific performance of the contract on which he relied.
the defences raised to his claim for specific performance were that the parties were not ad idem - I take it that that includes the contention that there was never any concluded contract; that any bargain which was struck was a bargain subject to contract and no formal contract was ever executed; and, lastly, that in any case there was no sufficient memorandum of the contract, if there had been a contract, under theprovisions of Station 40 of the law of Act,1925.
I will deal first with the question whether there was any concluded contract between the parties. That questions was with first by the learned Judge, and he came to a conclusion upon it adverse to the plaintiff and it its thus unnecessary for him to deal with the question of Section 40 of the 1925 Act. His decision was in effect not only that there was no concluded bargain, but also that the parties had contemplated putting the terms into a final formal agreement before they were to be bound.
From Mr. Just lee decision, Mr. Cooper, the plaintiff, now appeals to this court. Dealing first with the question of contract or no contract, I must refer to some of the correspondence Mr. Cooper's case is that the contract is to be found in part in the correspondence and in part in conversations, either at interviews or on the telephone, between the parties, Beginning with the letter of the 17th December, 1953, so far as material it is in these terms: "Dear Mr. Critchley, I hereby give you an irrevocable option for the period of seven days from above date 4 - that was the 17th December, 1953 - " by written notice to me at the above address) to purchase from me in one transaction. (a) My one-half interest in the freehold premises at 35 Market Street, Watford, at the price of £4,750, (b) My one-half interest in the company Furnishers Limited, (whose registered office is situate at 9 Street, Ipswich, and whose business premised are at 35 Market Street, Watford, Hart) at a price equal to one-half of the total of the following sums, that is to say: (1) the book value of the company's assets as shown in a balance sheet to be prepared ea at the 31st December, 1953, after deduction there from of the amounts shown in the balance sheet as liabilities in respect of trade and sundry creditors and bank overdraft and provision for taxation as mentioned at 2 (11) below. (11) thebook value of the profit including finance charges which will accrue from all biro purchase transactions which at the 31st December,1953, are still uncompleted and on the basis of due payment in full by all customers under their agreements.
"(2) In ascertaining the figures at 1(b) above, the following terms shall apply: (i) the balance sheet and the Profit & Loss Appropriation account a shall be prepared after audit by our auditors" - who are then named - "and shall be prepared on the system with supporting trading account; hire-purchase account; end profit and loss account and on the same basis of valuation of items and with all similar items (where applicable) and in similar manner as adopted and used for the year ended 30th April, 1953. (ii) Provision shall be made in such accounts for taxation only on the actual taxable profit shown in such accounts at 9s. In the £. (iii) No prevision shall be made in the accounts for any taxation on the figure at 1(b) (ii) above". That was the book value of the profit which would from hire purchase transactions.
"(3) the purchase of the transactions" - that looks as though it should be either "the purchase" or "the transaction" - "shall be completed on or before the 28th February, 1954, at the office of my solicitors" - who are then named, with their address.
"(4) the freehold property being in our joint names, no abstract of title shall be required or requisitions on title made end the National Conditions of Sale (16th Edition) shall apply to the sale of my share in the freehold so far as applicable end not varied by this letter." then paragraphs 5 and 6 make provision as to the mode of paying the purchase money; and I think nothing turns on those. then there are some consequential provisions as to the release of Mr. Cooper from his liabilities and resignation from the Board of Directors and so on; and nothing turns on those either.
the plaintiff said la evidence that, before Mr. Critchley replied to that letter, the plaintiff and Mr. Critchley had a long discussion with the company's auditors, and the terse proposed in it were gone through with great care. It seems that Mr. Critchley did not altogether approve of the terms proposed, although he was willing in principle to buy the plaintiff out. On the 23rd December, 1953, he wrote to the plaintiff a letter in which he said: "Dear Mr. Cooper, I am not willing to take up the option which you gave in your letter of the 17th December, because I think it is not easily especially in the reference to taxation, and might therefore lead to disputes.
"I am still most willing to purchase your half share in the property and the company on a fair valuation as we agreed, and I in my turn therefore make to you the following offer, which will remain open until the 31st December. You will note that I am now prepared to pay the whole amount for your shares on completion and do not require to pay any part of it by installments.
"(l) I will buy your half share in the freehold premises 35 Market Street, , for the sum of £4,750; completion shall take place at your solicitors' offices on the 30th January, 1954, and I agree paragraph 4 of your letter.
"(2) I will buy your one-half interest in Furnishers Ltd. at a price calculated in the following way: the auditors to the company shall prepare as at the 31st December, 1953, a balance sheet and Profit & Loss Appropriation Account on the same basis as those prepared for the year ended 30th April, 1953, with two exceptions. the hire purchase accounts outstanding on the 31st December shell be valued on the basis of the balances due on each account and not at stock at cost, end there shall be included in the provision for taxation a mum equal to tax at 9s. In the on the profit figure in such balances due. the price for the shares shall be one-half of theresultant balance of the profit & Loss Appropriation Account and shall be paid on or before the 28th February, 1954. Completion shall take place at your solicitors office.
"(3) I agree paragraphs 7, 8 and 9 of your letter and only ask for your assurance that, after completion, you will mot trade in the Borough of in competition with sterlina Furnishers Ltd".
Between the receipt of that letter by the plaintiff end the 30th September, 1933, there was some discussion between the parties as regards this matter of the proposed acquisition by the defendant of the plaintiff's interest, and the plaintiff said in evidence that he made two points in particular, both of which were agreed to by the defendant. Those points were these. the first was that the price of the shares was to be one-half of the resultant balance of the Profit & Loss Appropriation Account as it appeared in the balance sheet and one-half of the share capital; and the second was that the purchase of the freehold and the plaintiff's interest in the company should both be completed simultaneously, completion to be on or before the 27th...
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