Firstpost Homes Ltd v Johnson

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
Judgment Date20 Jul 1995
Judgment citation (vLex)[1995] EWCA Civ J0720-3
Docket NumberNo CCRTI 94/1034/G

[1995] EWCA Civ J0720-3



On Appeal From Order of his Honour Judge Farrer QC

Before: Lord Justice Balcombe Lord Justice Gibson Lord Justice Hutchison

No CCRTI 94/1034/G

First Post Homes Limited
Johnson and Others

MR T SEYMOUR (Instructed by Jennings Perks & Breakwell of Walsall) appeared on behalf of the Appellant.

MR R WAKEFIELD (Instructed by Burrell Davies of Lannock, Staffordshire) appeared on behalf of the Respondent.


( )


LORD JUSTICE PETER GIBSON: Since 26th September 1989 contracts for the sale of land have had to be made in conformity with Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. The short issue at the heart of this appeal is whether in the particular circumstances of this case the requirements of that section were satisfied. In proceedings brought in the Lichfield County Court by the plaintiff purchaser who sought specific performance of an alleged contract for the sale of land, the defendant personal representatives of the vendor applied to strike out the action as disclosing no reasonable cause of action. That application was dismissed by District Judge Brown but on appeal succeeded before His Honour Judge Brian Farrer QC. The purchaser now appeals to this court with leave of the judge. The relevant facts can be stated briefly. The late Miriam


Fletcher owned 15.64 acres of land to the rear of Fulfen Farm, Burntwood, Staffordshire. The purchaser, acting by its director Geoffrey Hale, reached an oral agreement with Mrs Fletcher whereby she was to sell that land to the purchaser for £1,000 per acre. Mr Hale caused his secretary to type a letter on the 9th April 1994 for Mrs Fletcher to sign. The letter bore Mrs


Fletcher's address in the top right-hand corner and the date and it was addressed on the same page to Mr G Hale, Firstpost Homes Limited, and the address was given. The letter continued:

"Dear Geoff,

re: Land at rear of Fulfen Farm, Burntwood Further to our recent discussions I now agree to sell you the above land shown on the enclosed plan which extends to 15.64 acres in consideration of the sum of £1,000. (One thousand pounds) per acre.

Yours sincerely."


Then there was a gap, and underneath "M Fletcher (Mrs.)" was typed, the gap plainly being intended as the space in which Mrs Fletcher was to sign.


A plan, being a copy of an Ordnance Survey plan, was attached to the letter by a paperclip. The plan shows the 15.64 acres, the boundary of which is marked in colour. Mr Hale signed the plan at its foot. The letter and the plan were put into an envelope and Mr Hale delivered it to Mrs Fletcher on the evening of Friday 9th April 1993. On Sunday 11th April he returned. Mrs Fletcher then signed the letter in the space above her typed name and dated it the 11th April 1993. She also signed the plan above Mr Hale's signature and again put the date. No solicitor appears to have been consulted by either party.


Mrs Fletcher died very shortly afterwards on 12th May 1993. Soon after her death her personal representatives received a letter from Mr Hale on behalf of the purchaser, claiming that there was a concluded agreement between the purchaser and Mrs Fletcher for the sale of the land for £15,640. Proceedings commenced in November 1993. Amongst the defences raised by the defendants is an allegation of undue influence by Mr Hale. But the point taken by the personal representatives on this application to strike out is that there was no contract satisfying the requirements of Section 2.


Prior to the coming into effect of Section 2 the formalities governing the creation of a contract of sale of land which was enforceable by action were contained in Section 40 of the Law of Property Act 1925 which in turn was derived from Section 4 of the Statute of Frauds 1677.


Following the recommendations of the Law Commission in its report Transfer of Land: Formalities for Contracts of Sale etc. of Land (1987) Law Com. No. 164, Section 2 was enacted though in slightly different form from that of the draft bill attached to the Law Commission's report. Section 40 ceased to have effect. Section 2 is headed Contracts for sale etc. of land to be made by signed writing. Section 2 (1), so far as material, reads as follows:

"(1) A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each.

(2) The terms may be incorporated in a document either by being set out in it or by reference to some other document.

(3) The document incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not necessarily the same one) must be signed by or on behalf of each party to the contract."


I need not read any of the other provisions of Section 2.


Section 2 brought about a markedly different regime from that which obtained hitherto. Whereas under Section 40 contracts which did not comply with its requirements were not void but were merely unenforceable by action, contracts which do not comply with Section 2 are ineffective: a contract for the sale of an interest in land can only be made in writing and in conformity


with the other provisions of Section 2. Whereas an oral contract was allowed and enforceable provided that it was evidenced in writing and the memorandum or note thereof was signed by or on behalf of the party against whom it was sought to be enforced, oral contracts are now of no effect and all contracts must be signed by or on behalf of all the parties. Whereas the contract or the memorandum or note evidencing the contract previously could be contained in more than one document, only one document is now allowed (save where contracts are exchanged), although reference to another document may be permitted in the circumstances laid down in sub-sections (2) and (3). Whereas the memorandum or note needed for Section 40 did not have to contain every term of the contract, all the terms must now be contained in the document in question. Whereas the doctrine of part performance allowed certain contracts otherwise unenforceable to be enforced, that doctrine now has no application. It is to my mind plain that the 1989 Act, which, as its preamble indicates, was to make new provision with respect to contracts for the sale or other disposition of interests in land, was intended to make radical changes to such contracts in a way that was intended to simplify the law and to avoid disputes, the contract now being in a single document containing all the terms and signed by all the parties. Thereby it has been sought to avoid the need to have extrinsic evidence as to that contract.


The District Judge took the view that it was arguable that the letter and the plan might be one document for the purposes of Section 2. On that ground he refused to prevent the case from going to trial. The judge however on the appeal to him took a more robust view. He regarded the letter as what he called the primary document. And whilst acknowledging that the plan was necessary to make sense of the contract and to define the land, the subject of that contract, and "to that extent in layman's terms it can therefore be viewed as an integral part of the document which is in the letter", he nevertheless said:

"However, in my view, the terms of the contract are set out in the letter. That document refers to a plan …..

Had Mr Hale wished to have indicated his prior consent to those terms, he, Mr Hale, could and should have signed the letter".


Accordingly, he allowed the appeal and struck out the action.


Mr Seymour for the purchaser now contends (1) that the issue should have been left to be determined by the trial judge after hearing all the evidence, and (2) if it be appropriate to determine the issue before trial then it is clear that (a) the letter and the plan are a single document signed in conformity with Section 2 because of Mrs Fletcher's signatures on the letter and plan and Mr Hale's signature on the plan, and (b) if they are two documents, nevertheless by causing the purchaser's name to be typed on the letter as the addressee, the purchaser signed the document for the purposes of Section 2.


Mr Wakefield for the personal representatives submits that the judge was right in holding that the document that had to be signed, but was not signed, was the letter. He further submits that in any event Mr Hale's signature merely authenticated the plan and not the letter and Mr Hale did not sign the letter. By a Respondent's notice he takes the point that the letter does not purport to be a contract by which both parties undertake obligations. It purports only to be an engagement by Mrs Fletcher to sell the property to Mr Hale or the purchaser but there is no corresponding engagement by Mr Hale or the purchaser to purchase and provide consideration. As such, Mr Wakefield submits, it is only an offer by Mrs Fletcher to sell without an acceptance of that offer or an option without consideration passing to her.


I start with the question whether this is an appropriate case for an application to strike out. It is not a case, as it seems to me, where there is any possibility of facts more favourable to the purchaser than appear in the Particulars of Claim and Mr Hale's affidavit emerging at the trial. I am prepared to assume that the facts so appearing in those documents are true. If there is a trial, the undue influence issue will have to be the subject of evidence and argument and that will



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