David Kinane /Cross and Alimamy Mackie-Conteh /Cross
| Jurisdiction | England & Wales |
| Judge | Lady Justice Arden,Lord Justice Neuberger,Lord Justice Thorpe |
| Judgment Date | 01 February 2005 |
| Neutral Citation | [2005] EWCA Civ 45 |
| Docket Number | Case No: A3/2004/1120 |
| Court | Court of Appeal (Civil Division) |
| Date | 01 February 2005 |
[2005] EWCA Civ 45
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
(CHANCERY DIVISION)
Mr Michel Kallipetis QC
(Sitting as a deputy High Court judge)
HC02 CO2842
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Thorpe
Lady Justice Arden and
Lord Justice Neuberger
Case No: A3/2004/1120
Adrian Jack (instructed by T.G. Baines) for the Appellant
Angus Macpherson (instructed by Phillips) for the Respondent
This is an appeal from the order dated 27 April 2004 of Mr Michel Kallipetis QC giving judgment in this action in favour of the claimant, Mr David Kinane. By his order, the judge made a declaration that Mr Kinane was an equitable chargee under an equitable charge of 141 Willersley Avenue, Sidcup, Kent ("the property") in the sum of £100,000 and made an order for the sale of the property.
Mr Kinane bought this action against the appellant, Mr Alimamy Mackie-Conteh, and a company, of which Mr Mackie-Conteh was managing director, called Almack Marketing Services Limited ("Almack") to recover a loan of £50,000 made by Mr Kinane to Almack. As appears this was to be repaid with a return of 100 percent.
Almack needed this loan in order to discharge the fees of a third party, Mr George Maxwell-Brown, who had helped it to find a bank willing to open a letter of credit for US$2m. in its favour, and also the fees of that bank. The letter of credit was required so that Almack could take advantage of a valuable opportunity to purchase rice from a company in India. The bank which Mr Maxwell-Brown found was First Merchant Bank of Cyprus ("FMBC"). Mr Maxwell-Brown then introduced Mr Mackie-Conteh to Mr Kinane as a person willing to take an investment in this venture.
The judge found that there was a meeting between Mr Mackie-Conteh, Mr Maxwell-Brown and Mr Kinane on 8 November 2001. At this meeting, Mr Kinane and Mr Mackie-Conteh agreed that Mr Kinane should make a loan of £50,000 to Almack and that the return on this sum would be 100 per cent, namely a further £50,000, which would be paid within 120 days of the transaction being completed. However, Mr Kinane required security for his loan. Mr Mackie-Conteh offered a second charge on the property. He said that this property was registered in the name of himself and his wife, Mrs Hawah Mackie-Conteh. He was wrong in this. The property was registered in his sole name, but nothing turns on this misstatement now. Mr Kinane asked for confirmation in writing that Mrs Mackie-Conteh agreed to the charge.
Mr Maxwell-Brown then typed up the following draft letter (omitting addresses and details of attestation):
"Alimamy Conteh
8 November 2001
Hannah [sic] Laura Conteh …
To: David Kinane …
Dear David Kinane,
In respect of the financial assistance you have provided we are happy to offer our home as security. We agree that you may place a charge in the sum of £100,000.00 (ONE HUNDRED THOUSAND POUNDS ONLY) over the property shown above which is our home. We fully understand as a result of this action our home may be at risk.
Because of our knowledge and expertise in our areas of business and our current contractual commitments we are totally confident in being able to pay to you, or your nominees, the sum of £100,00 within the next 120 days in order to have this charge removed.
Please arrange for the charge documents to be produced as soon as possible so that we can bring this matter to a swift conclusion. Please also ask the Solicitor acting for you to send us an invoice for the work he does on you[r] behalf in arranging this charge over our property.
Yours sincerely, …"
Mr Mackie-Conteh took this letter away with him when he left the meeting. He and Mrs Mackie-Conteh later signed it and Mr Mackie-Conteh returned it by post to Mr Kinane. Their signatures were witnessed by a Mr Graham Baldock and the date of their signature was recorded as 8 November 2001. I refer below to the letter dated 8 November 2001 as "the security agreement". The judge found that, subject to section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 ("the 1989 Act) (set out below), the security agreement constituted an equitable charge over the property, and there is no appeal on this point.
There were disputes of fact on many issues at trial (with which this appeal is not concerned). The judge found that Mr Kinane was not prepared to advance the money until the security was in place. But the transaction was urgent. Mr Mackie-Conteh gave Mr Kinane details of Almack's account with FMBC. He also gave Mr Kinane his personal cheque for £15,000 because the amount that Mr Kinane had agreed to lend was not enough to discharge the bank's fees and to pay the fees of Mr Maxwell-Brown.
Once the cheque for £15,000 was cleared, Mr Kinane asked his bank to transfer US$80,000 from his account to the account of Almack of which Mr Mackie-Conteh had given him details. This sum was duly transferred and the whole amount was applied by FMBC in meeting their costs of issuing the letter of credit, as agreed by Almack. Indeed, a further letter of credit was subsequently issued. In fact, both letters of credit were rejected by the seller. The proposed purchase of the rice thereupon fell through.
The loan was not repaid and Mr Kinane started proceedings against Mr Mackie-Conteh and Almack for repayment of his loan and, in the case of Mr Mackie-Conteh, specific performance of the agreement for security. The judge found that the amount lent, and agreed to be lent, was £50,000. Mr Kinane based his claim against Mr Mackie-Conteh on the agreement reached at the meeting on 8 November 2001 and on the security agreement. At the trial, the judge also gave judgment against Almack for the amount of the loan (£50,000), and there is no appeal from that part of his order.
One of the defences raised by Mr Mackie-Conteh was that there was no enforceable agreement. Mr Mackie-Conteh denied that the security agreement was enforceable. At the trial, Mr Kinane submitted that, although the security agreement did not comply with section 2 of the 1989 Act, it fell within the exception to that section provided by Section 2(5), namely a constructive trust, that this constructive trust had arisen by virtue of the common intention between Mr Kinane and Mr Mackie-Conteh that Mr Kinane would be granted a change on the property and that in any event the security agreement complied with section 53(1)(c) of the Law of Property Act 1925 ("the 1925 Act").
The judge accepted that the security agreement was unenforceable because of section 2(1) of the 1989 Act applied but, applying the decision of Lightman J in Murray v Guinness, 29 April 1998 (unreported), he held that the disposition did not have to be in writing because of the provisions of section 53(1)(c) of the 1925 Act. Mr Mackie-Conteh appeals against the judge's order on this basis that this conclusion was wrong in law.
In the circumstances the judge held that it was unnecessary for him to determine whether a constructive trust had arisen Mr Kinane cross-appeals from the judge's order on the grounds, inter alia, that the judge ought to have found that a constructive trust had arisen by virtue of Mr Kinane making his advance upon receipt of the security agreement. Mr Kinane also contends that the judge ought to have found that the security agreement was enforceable by virtue of section 53(1)(a) of the 1925 Act.
Section 53 of the 1925 Act
Section 53(1) of the 1925 Act provides:—
"(1) Subject to the provisions hereinafter contained with respect to the creation of interests in land by parol –
(a)
no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorised in writing, or by will, or by operation of law;
…
(c) a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same or by his agent thereunto lawfully authorised in writing or by will."
As to section 53(1)(c), Mr Adrian Jack, for Mr Mackie-Conteh, submits that this only applies to a disposition of a subsisting interest: see Vandervell v IRC [1967] 2 AC 291 and in particular the judgment of Lord Upjohn at pages 311–2. At an earlier point in his speech, Lord Upjohn explained that section 53(1)(c) could be traced back to section 9 of the Statute of Frauds Act 1677, which provided that:
"All grants and assignments of any trust or confidence shall likewise be in writing, signed by the party granting or assigning the same …"
but that section had been materially amended by the Law of Property Act
Mr Jack also relies on Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669 at 706, where Lord Browne-Wilkinson held that there is no separate equitable interest in property until the legal and equitable estates have been divided. In the present case, the effect of the security agreement was to create a new interest in land. Therefore, section 53(1)(c) could not apply. Mr Jack submits that the decision of Lightman J in Murray v Guinness is distinguishable.
Mr Angus Macpherson, for Mr Kinane, seeks to uphold the judgment of the judge on section 53(1)(c). Mr Macpherson relies on the decision of Lightman J in Murray v Guinness. He accepts, however, that Mrs Mackie-Conteh had no interest in the property and that Mr Mackie-Conteh was solely entitled to it.
In my judgment, section 53(1)(c) cannot apply because it is...
To continue reading
Request your trial
-
(1) Crossco No. 4 Unlimited (2) Piccadilly and Another v (1) Jolan Ltd (2) Jolan Piccadilly Ltd and Others
...at [42] and [48]. 287 The Defendants relied on Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd [2005] 2 P&CR 105(Lewison J) and [2005] EWCA Civ 45 (Court of Appeal). In that case, Targetfollow (Birmingham) Ltd ("TBL") was a subsidiary company of Targetfollow Ltd ("TGL"). TBL was inco......
-
Alice Kahrmann (as Administrator of the Estate of Rainer Christian Kahrmann) v Hilary Harrison-Morgan
...at 180C: see [2007] 2 AC 432 at [37]. We were also referred by Mr Darton to the decision of this court in Kinane v Mackie-Conteh [2005] EWCA Civ 45, [2005] WTLR 345, where a common intention constructive trust was held to arise on the facts found by the trial judge, with the consequence t......
-
Brightlingsea Haven Ltd v Morris and Others
...lease. The parallel with the present case is sufficiently plain, and the defendants can rely on it. 45 Kinane v Mackie-Conteh [2005] EWCA Civ 45 was concerned with an agreement to give a charge over a property to support a loan made in connection with a commercial obligation related to a l......
-
Yeoman's Row Management Ltd and another v Cobbe
...acquisition of [the property in respect of which the equity was claimed]". Kilcarne appealed but its appeal was dismissed ( [2005] EWCA Civ.45). 36 The circumstances of the present case are that the property in question was owned by the appellant before any negotiations for a joint venture......
-
Straight through Certainty and Out the Other Side: Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 and Proprietary Estoppel
...the legislation.16 [2011] Southampton Student Law Review 7Ibid n.4 8Yaxley v Gotts [2000] Ch. 162 CA (Civ Div), Kinane v Mackie-Conteh [2005] EWCA Civ 45 9Ibid n.4 10Ibid n.4 11Ibid n.2, Ibid n.4, Gerwyn Griffiths, „Tighter or looser? Formalities for contracts for the sale of land‟ [1987] 5......