Mclaughlin (Respondent/Claimant) Duffill (Appellant/Defendant)
| Jurisdiction | England & Wales |
| Judge | The Chancellor,Lady Justice Smith,Lord Justice Aikens |
| Judgment Date | 26 November 2008 |
| Neutral Citation | [2009] EWCA Civ 1627 |
| Docket Number | Case No: A3/2008/1915; A3/2008/1595(A) |
| Court | Court of Appeal (Civil Division) |
| Date | 26 November 2008 |
[2009] EWCA Civ 1627
The Chancellor of the High Court
Lady Justice Smith DBE and
Lord Justice Aikens
Case No: A3/2008/1915; A3/2008/1595(A)
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT, CHANCERY DIVISION
(DISTRICT JUDGE KHAN)
Royal Courts of Justice
Strand, London, WC2A 2LL
THE APPELLANT APPEARED IN PERSON.
Mr D Green (instructed by Messrs Mace & Jones) appeared on behalf of the Respondent.
(As approved)
The Chancellor:
This is the appeal of Ms Duffill brought with the permission of Jacob LJ from the order of District Judge Khan sitting as a judge of the Manchester County Court, made on 6 June 2008. District Judge Khan made an order for specific performance of a contract which he found to have been made on 14 July 2006 between the claimant, Mr McLaughlin, and Ms Duffill by her agent for the sale of 16 Sandpiper Drive, Adswood in Stockport, Cheshire. The sale was to be by Ms Duffill to Mr McLaughlin at a price of £115,000.
The property in question had been brought by Ms Duffill in 1997. It is a three-bedroom semi-detached house. Ms Duffill was a teacher and at the material time was living and working in Hertfordshire rather than in the property itself. By the summer of 2006 she determined that she wished to sell the property in order to fund a new business with the proceeds of sale. Accordingly on 6 June 2006 she instructed a firm of local agents, Main & Main, to sell the property by auction with a reserve price of £140,000.
A week later on 14 June she instructed a firm of conveyancers to act on her behalf, HL Interactive, a firm which had been suggested to her by Main & Main, and on their request they supplied to Main & Main a draft contract suitable for a sale by auction.
The auction was held on 6 July 2006 but the property did not sell. Accordingly, in accordance with the terms of Main & Main's engagement for sale by auction—see clause five—the property was put on the open market for sale at the price of £140,000. Thereafter there were various telephone conversations between Ms Dean, the individual at Main & Main responsible for the sale, and Ms Duffill as their client concerning various offers made by the claimant, Mr McLaughlin.
Following those conversations, on 14 July 2006 contracts were exchanged for the sale of the property to Mr McLaughlin for £115,000. One part was dated 14 July and was executed by Mr McLaughlin. The other was dated 4 July and was executed by Ms Dean as agent. Although it did not specify that at the point of signature it was quite clear that she was acting or purporting throughout as agent for Ms Duffill as vendor. Under the terms of that contract the completion date was set for 4 August 2006 and it contained a number of special conditions, 15 to 21, which were applicable only to a sale by auction as had been originally intended.
On 14 July 2006 Main & Main sent the contracts so exchanged and signed by Mr McLaughlin to HL Interactive acting for Ms Duffill, and Ms Dean in the covering letter described it as a sale “by way of auction”. All this time Ms Duffill had been in Hertfordshire where, as I said, she is working as a teacher. On 28 July 2006 she returned to Manchester and, according to her, discovered for the first time that she was apparently committed to a sale of the property to Mr McLaughlin at a price of £115,000.
As I have indicated, the date fixed for completion was 4 August but the sale was not completed. By 9 August the solicitors for Mr McLaughlin lodged a caution, describing the contract as dated 4 July, and on 10 August the same solicitors served a notice to complete on Ms Duffill on or before 24 August, again referring to the contract as being made on 4 July. Proceedings for specific performance were commenced on 1 March 2007 by the issue of a claim form by Mr McLaughlin from the local district registry. When Ms Duffill served a defence on 13 July, she admitted that she had agreed to sell the property at £115,000, but “subject to contract”. But she denied that she had ever authorised Ms Dean to sign any contract on her behalf. In addition she contended that the contract was void for want of compliance with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, not only with regard to the lack of any signature of hers but also because of the inclusion of the terms relating to a sale by auction.
The claim was transferred by District Judge Smith to the Manchester County Court where it came on for trial before District Judge Khan on 6 June 2008. Mr McLaughlin appeared by counsel; Ms Duffill appeared in person, but, I think, with the assistance of a MacKenzie friend. The judge heard oral evidence from Ms Dean, from Ms Duffill, and Mr McLaughlin, and considered the written evidence adduced before him by the parties. This included of course the correspondence between the various firms of solicitors, the two forms of contract which had been exchanged and the various witness statements. He gave judgment on the same day and the material conclusions to which he came can be described as follows. First, the burden was on Ms Duffill to prove that she did not give Ms Dean authority to sign the contract on her behalf, and on Mr McLaughlin to prove that the contract was binding. Second, Ms Dean required actual authority to contract on behalf of Ms Duffill, but that such authority might be given only orally. Third, to comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, the contract must include all the terms agreed but might also include terms which are inapplicable in the circumstances, such as those relating to the auction sale. Fourth, the judge reviewed the oral evidence of the three persons involved: Mr McLaughlin, Ms Dean and Ms Duffill. He preferred the evidence of Mr McLaughlin and Ms Dean to that of Ms Duffill and concluded as a matter of fact that authority to sign the contract had been given orally by Ms Duffill to Ms Dean on or about 14 July 2006 as well as on two earlier occasions. Fifth, he considered that the contract complied with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, notwithstanding that paragraph 17 and 20 applied to auction sales. And, sixth, he considered that Mr McLaughlin was entitled to specific performance of the contract but not to damages as there was no evidence to support the claim.
District Judge Khan made an order as to costs and refused permission to appeal on 27 June. Ms Duffill issued her appellant's notice on 18 July 2008. Longmore LJ granted a stay of execution on the judgment for specific performance, and a further order to that effect was made by District Judge Khan on 5 September. Permission to appeal to this court was given by Jacob LJ on 10 October 2008. He gave permission on two grounds only, namely whether or not section 53 of the Law of Property Act 1925 applies and whether or not the judge was right to hold that the burden of proof lay on Ms Duffill to prove that she did not give authority to Ms Dean. He refused permission on all other points. It is right that I should read the extended reasons that Jacob LJ gave:
“1. Without the benefit of argument, it seems to me at the moment that s.53 is a complete answer to the claim. It provides that:
'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.'
2. Heard v Pilley, relied upon by the DJ was a case where the contract was signed by the purchaser's agent. As between that agent and the defendant there was a perfectly good contract. The contest was between the principal and his defaulting agent—a quite different thing from the creation of an interest in land.
3. Although s.53 was not drawn to the DJ's attention (as it seems it should have been) it is a pure point of law which, subject of argument, is fit to be taken in the CA.
4. I am also doubtful about the burden of proof point. Whilst an agent can bind his principal within his actual or ostensible authority, at present I see no reason to suppose that an estate agent has ostensible authority to bind his principal. Estate agents normally do not sign for their principals in those circumstances it would seem to follow that the burden of proof of actual authority would lie on he who asserts the agent had that authority. I find it difficult to imagine a purchaser being satisfied with the estate agent's signature unless he has made a specific enquiry as to the agent's authority to sign and at least got written confirmation from the agent as to having purely oral authority.
5. Miss Duffill seeks to raise a host of other points and some new evidence. There is no merit in any of these.”
In this court Ms Duffill has had the benefit of the advice and assistance of Mr Richard Green as her MacKenzie friend. We expected her to advance the arguments in support of her appeal herself, and although in opening we heard Mr Green on parts of her case and in her reply read his notes of the argument that he considered that she should advance, the argument has been in effect given to us by Ms Duffill in person. She did not renew her application for permission to appeal in respect of the various points to which Jacob LJ had referred to as being without merit. Accordingly, there are two points on which she was granted permission by Jacob LJ: namely, (1) the burden of proof; and (2) whether section 53(1)(a) Law of Property Act 1925 applies so as to invalidate the contract as...
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