Heywood v B.D.C. Properties Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WILLMER,LORD JUSTICE DANCKWERTS |
| Judgment Date | 14 June 1963 |
| Judgment citation (vLex) | [1963] EWCA Civ J0614-3 |
| Date | 14 June 1963 |
| Court | Court of Appeal |
[1963] EWCA Civ J0614-3
In The Supreme Court of Judicature
Court of Appeal
Interlocutory List
Lord Justice Willmer
and
Lord Justice Danckwerts
MR P. A. W. HERRITON (instructed by Messrs, Beach & Beach) appeared as Counsel on behalf of the Appellants (Defendants).
MR JOHN F. BROOKES (instructed by Messrs. Arnold Carter & Co., agents for Messrs. Dunn & Baker, Exeter) appeared as Counsel on behalf of the Respondents (Plaintiffs).
Lord Justice Danckwerts will deliver the first Judgment.
This is an Appeal from an Order of Mr. Justice Pennycuick made on the 23rd April, 1963, by which he directed the vacation of a land charge registered under the Land Charges Act, 1925, on an interlocutory motion made in an action which had been begun by the Plaintiffs, the motion being based on the provisions of section 10, sub-section (8), of the LandCharges Act, 1925. The land charge in question was an estate contract claiming to refer to a contract made in correspondence extending between the two dates mentioned in the application for registration, and it was a land charge in Class of the Registration, sub-class (iv).
The position was that the Plaintiffs, the two Heywoods, and the Defendant Company had been negotiating for the sale and purchase of certain property at a price of £14,000, and the Plaintiffs have brought an action for a declaration that no contract exists for the sale of the property to the Defendant Company and for an order vacating the registration of the charge under the Land Charges Act, 1925. It appears that, the Plaintiffs' case being that there is no such contract, they are negotiating with different purchasers, and the existence of the land charge is a bar to their proceeding successfully with those negotiations.
Mr. Justice Pennycuick made an order because he considered that it was plain on the correspondence which was referred to in the land charge that no possible successful case could be made out that there was any contract in favour of the alleged purchasers. This, of course, is a summary method of proceeding, and one of the objections that has been taken is that, not only it means giving the relief to the Plaintiffs which they seek to obtain at the trial of the action, but also that, if there is any triable point or any arguable point, it is not appropriate to grant relief under the summary provisions which are envisaged by the Land Charges Act in section 10, subsection (8). That objection is supported by a decision of Mr. Justice Vaisey in Re Engall's Agreement, 1953 2 All England Reports, 503, in which in an application made by Originating Summons (which is, according to Order 55, Rule 14 a, the appropriate way of proceeding to obtain vacation of a land charge pursuant to section 10, sub-section (8), of the Act) there wassome doubtful issue, and Mr. Justice Vaisey thought that the proper method of proceeding was in an action and not by this summary procedure. In Re Engall's Agreement, the point at issue was whether the contract which had been made, quite properly, had been determined by the appropriate procedure open to the vendors in that case. Mr. Justice Vaisey considered that he ought not to deprive the Defendant of his chance to have that dealt with in an action at the trial of the action. In that case no action had been started. In the present case the Plaintiffs had issued their Writ on the 28th December, 1962, the Statement of Claim was delivered on the 22nd January, 1963, and the Defendants put in their Defence on the 8th February, 1963. The Statement of Claim in substance put up a case which was that any arrangements between the Plaintiffs and the Defendants were subject to the well-known situation that they were "subject to contract" – that is, subject to formal contract – which, it is well established, means that there is no final and binding contract until a formal contract has been drawn and has been signed and exchanged by the respective parties. The defence was "the Defendants deny that there was any contract between themselves and the Plaintiffs subject to contract". Mr. Justice Pennycuick found that sentence difficult to understand, but though it is very inartistically drawn, I can see quite clearly what the Defendants meant. They meant that there was a contract, and it was not subject to any such condition as I have already indicated.
Now Mr. Justice Pennycuick reached the conclusion on the correspondence that it was quite impossible for the Defendant Company to establish any binding contract relating to the sale of this land. As the registration refers to the correspondence, of course, it is simply a matter of looking at the correspondence to see whether the land charge was justified. I think that the conclusion reached by the learned Judge inthe circumstances was the correct one in that respect. The correspondence – at least the correspondence we have in the bundle before us – starts with a letter of the 25th June, 1962 written by the Plaintiffs' solicitors to the Defendants' solicitors, and the first sentence is "We understand that you act for the above Company who have agreed, subject to contract, to purchase the above land from our Clients, Messrs. Heywood." Now that attaches to the whole transaction the phrase "subject to contract", and it is never alleged anywhere in the correspondence that the Plaintiffs' solicitors were incorrect in making the assumption that they did. It is clear when the correspondence is read through – and I do net propose to read through it all – that what happened was that, while the solicitors who had been instructed to draw up a formal contract were engaged in that operation, the purchasing company found difficulties in getting planning permission, and also in paying or at any rate, they did not desire to pay as quickly as had teen originally planned, and they were making further negotiations with the object of altering the original terms which had been provisionally agreed between the parties. Eventually the negotiations were broken off by the Plaintiffs' solicitors. It is quite plain to me that the learned Judge reached the right conclusion, and that there was on the correspondence no possible binding contract between the Plaintiffs and the Defendants. That being so, of course, the land charge was not really effective and ought not to remain. It is noteworthy that the land charge was actually not put upon the Register until the 27th September, 1962, when it is plain that...
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