Grossman v Hooper
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SCHIEMANN,LORD JUSTICE CHADWICK |
| Judgment Date | 11 April 2001 |
| Neutral Citation | [2001] EWCA Civ 615 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | B2/2000/0498 |
| Date | 11 April 2001 |
[2001] EWCA Civ 615
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LAMBETH COUNTY COURT
(HIS HONOUR JUDGE COX)
Royal Courts of Justice
Strand
London WC2
Lord Justice Schiemann
Lord Justice Chadwick and
Sir Christopher Staughton
B2/2000/0498
MR S WALSH (instructed by Bains & Partners, London SW12 9AP) appeared on behalf of the Appellant
MR J SMALL (instructed by Butcher Burns, London WC1X 0AE) appeared on behalf of the Respondent
Lord Justice Chadwick will deliver the first judgment.
This is an appeal against an order made on 6th March 2000 by His Honour Judge Cox, sitting at Lambeth County Court, in proceedings brought by Miss Carol Grossman against the appellant, Mr Simon Hooper, to enforce an agreement made in December 1996 for the transfer to Miss Grossman of the appellant's interest in a property known as 77d Nightingale Lane, London SW12. The issue on the appeal is whether the agreement satisfied the requirements of section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989. The section is in these terms:
“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.”
The underlying facts may be stated shortly. The parties had lived together as man and wife for a number of years. The property, 77d Nightingale Lane, was purchased in or about February 1986 in the sole name of the appellant, Mr Hooper. The purchase was funded with the assistance of a mortgage loan. The respondent, Miss Grossman, was jointly liable as borrower under the mortgage; and, it is said, she made some further contribution to the purchase price. It has not been disputed that she became beneficially entitled to a share in the property.
The parties lived together at the property for ten years or more. But, in or about July 1996, their relationship foundered. The appellant moved out of the property and went to live elsewhere. The respondent continued to occupy 77d Nightingale Lane. After some months they reached agreement as to what was to be done with that property. The agreement is set out in a document which they both signed, in the presence of a witness, on 23rd December 1996. That document takes the form of a letter from the appellant to the respondent. The letter bears the date of earlier drafts, 21st December 1996, and is in these terms:
“Dear Carol
Re 77d Nightingale Lane, London SW 12 8LY
Further to our discussions, I confirm that I agree to the transfer of the above mentioned property from my name into your name.
In consideration of this agreement, we have agreed that you, Carol, will be responsible for payments of the two charges secured against the property and for the mortgage.
I confirm that I will do all that is necessary to effect the transfer of the property into your sole name including co-operating in the deed of transfer.
I understand that you may need the consent of Bank of Ireland Home Mortgages Ltd and Barclays Bank plc to this transaction. I confirm that I will use my best endeavours to secure their agreement.
By this letter I give my authority to the bank of Ireland to send the title deeds to your solicitors [naming them], in order for them to prepare the necessary paperwork.
I confirm that upon the transfer this will represent full and final settlement of all claims that we may have as against each other now or in the future.”
The appellant has done nothing to transfer the property to the respondent. It appears that he has had second thoughts about the bargain which they had made in December 1996 6 These proceedings were commenced on 19th March 1998 by the issue of a writ in the Chancery Division of the High Court. In the statement of claim endorsed on the writ, Miss Grossman sought specific performance of the appellant's undertaking, contained in the letter dated 21st December 1996 to which I have just referred, to transfer the property, 77d Nightingale Lane, into her name.
A defence to that claim was served on or about 28th April 1998. It contains the assertions that if (which was not admitted) the letter of 21st December 1996 constituted or evidenced a contract between the parties, the appellant entered into that contract as a result of duress or undue influence exercised by the respondent; alternatively, as a result of misrepresentations as to the respondent's future intentions which were false. Those allegations were dismissed by the judge; they are not pursued on this appeal; and it is unnecessary to say any more about them.
The proceedings were transferred to the Lambeth County Court. An amended defence was served on or about 3rd August 1999. That raised a new point, pleaded by amendment as paragraph 7A:
“The letter dated 21 December 1996 purports to constitute an agreement in the form of a contract for the disposition of an interest in land, namely the Defendant's interest in the property. In the premises of paragraph 10 below, the said agreement contained further express terms which were not incorporated into the said letter. In the premises of the foregoing, the letter does not incorporate all of the terms expressly agreed by the parties in the form required by section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 and any contract contained or purported to be contained therein is unenforceable.”
Paragraph 10 of the amended defence (to which reference is made in paragraph 7A) contains the alleged representations as to the respondent's future intentions. There were said to be three representations: (a) that the respondent would pay off a debt owed to Mr V K Modi, in the sum of £10,000; (b) that the respondent would help the appellant to fund the purchase of a freehold flat by the appellant's brother, by providing £36,000 towards the purchase price; and (c) that the respondent would look after the appellant's elderly mother and, in particular, would be responsible for her private medical expenses.
The judge rejected the appellant's case as to the second and third of those alleged representations. There is no appeal against his findings of fact on those issues. There was never any dispute, in substance, that the respondent was to pay off the debt to Mr Modi. In her reply, served on 12th May 1998, the respondent had pleaded, in response to paragraph 10(a) of the defence:
“It is admitted that the Plaintiff told the Defendant that if he signed the letter [of 21st December 1996] she would pay off the sum of £10,000 to Mr Modi, but it was further agreed that the said debt would be paid by the Plaintiff out of the proceeds of sale of the property when she sold it.”
The judge made the following findings of fact as to the arrangements for repayment of the loan from Mr Modi, at pages 15 and 16 in the transcript of his judgment:
“At the time of Mr Hooper's acute financial embarrassment in the early 1990s the mortgage on the property fell seriously into arrears. On any account of it, a large sum of money, some £10,000 or thereabouts was advanced whether to Miss Grossman, or to Mr Hooper or to both of them I shall have more to say in a moment by a Mr Modai. That money was not charged on the property. It was a loan of funds designed specifically to enable Mr Hooper and Miss Grossman to discharge a debt in respect of mortgage arrears on the property.
It was never in doubt that that money would have to be repaid. At the time that the agreement was made, on the 21st December, the parties were, I am quite convinced, in agreement that the discharge of that obligation was to be affected by Miss Grossman.”
The judge observed that the question which he had to decide was whether the obligation to discharge the debt was a term of the agreement for the transfer of the appellant's interest in the property – in which case it should have been incorporated in the document signed by the parties, in order to comply with section 2 of the 1989 Act or whether it was some collateral arrangement. He went on:
“Mr Hooper asserts that the money was advanced essentially to him. It was advanced to him because he was the legal owner of the property. He it was who was therefore in default under the terms of the mortgage. He it was who was the beneficiary of the advance made by Mr Modai. Against this Miss Grossman asserts that Mr Modai was her friend, rather than Mr Hooper's; that the advance was made out of concern for her situation on the part of Mr Modai, and that, when the money was paid, it was paid into her bank account.”
The judge pointed out that the signed letter of 21 December 1996 followed two earlier drafts. The second of those earlier drafts, also in the form of a letter dated 21 December 1996 from the appellant to the respondent, contained two further paragraphs in addition to those in the letter as signed. The first of those paragraphs was in these terms:
“Since this transfer represents the assigning to you of in excess of £30,000 of equity, I confirm that I understand that courtesy of this transaction, you will assume responsibility for our loan from V K Modi and that you will advise him of this accordingly in due course.”
A paragraph to the same effect – although in a different form – had appeared in the first draft, which had been prepared as a letter from the respondent to the appellant. As the judge said:
“One also needs to look at the fact that reference to this particular advance is made in at least the second of the three documents which...
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