Oun v Ahmad
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE MORGAN,Mr Justice Morgan |
| Judgment Date | 19 March 2008 |
| Neutral Citation | [2008] EWHC 545 (Ch) |
| Docket Number | Case No: CH/2007/PTA/0420 |
| Court | Chancery Division |
| Date | 19 March 2008 |
[2008] EWHC 545 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr Justice Morgan
Case No: CH/2007/PTA/0420
Colin Green (instructed by J Esner & Co) for the Appellant
Richard Carter (instructed by Fieldings Porter) for the Respondent
Hearing date: 19 th February 2008
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic
Introduction
This is an appeal under Section 111 of the Land Registration Act 2002 against the decision of a Deputy Adjudicator (“the Adjudicator”) given on the 24 th May 2007. The appeal raises issues as to the application of Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (“the 1989 Act”) and as to the availability of rectification in a case where a written document contains only some of the express terms of a contract governed by section 2 of the 1989 Act.
Section 2 of the 1989 Act
Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 provides (so far as is material):
(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.
(4) Where a contract for the sale or other disposition of an interest in land satisfies the conditions of this section by reason only of the rectification of one or more documents in pursuance of an order of a court, the contract shall come into being, or be deemed to have come into being, at such time as may be specified in the order.
(5) … nothing in this section affects the creation or operation of resulting, implied or constructive trusts.
(6) In this section—
“disposition” has the same meaning as in the Law of Property Act 1925;
“interest in land” means any estate, interest or charge in or over land;
…
The facts in outline
Mr Ahmad is the owner of a long lease of premises at 318 Halliwell Road, Bolton. The lower part of that property has been used as an off licence and the upper part has been used for residential purposes. Mr Ahmad is registered with good leasehold title at the Land Registry, under title number LA299795. In December 2004, Mr Oun and Mr Ahmad came to a certain arrangement which provided for Mr Ahmad to sell the lease of the property to Mr Oun. The terms of that arrangement were recorded in writing in a way which I will describe below. Subsequently, Mr Ahmad and Mr Oun disagreed as to completion of the sale. On 21 st June 2005 Mr Oun registered against Mr Ahmad's registered title a unilateral notice in respect of a contract of sale said to have been entered into in December 2004. Mr Ahmad applied to cancel the unilateral notice. Mr Oun objected to the cancellation by an objection letter dated 22 nd July 2005. The dispute between the parties was referred to an Adjudicator pursuant to Section 73 of the Land Registration Act 2002. Directions were given for the resolution of the dispute. There was an oral hearing of the dispute on the 17 th and 18 th January 2007 when Mr Oun and Mr Ahmad and other witnesses attended and were cross-examined. On 24 th May 2007, the Adjudicator gave his written decision in the matter. He held that the arrangements made between the parties in December 2004 did not comply with Section 2 of the 1989 Act, that the non-compliance could not be cured by an order for rectification of documents and that, accordingly, Mr Oun did not have the benefit of a contract binding Mr Ahmad with the result that Mr Oun's unilateral notice against Mr Ahmad's title ought to be, and was, cancelled. On 22 nd June 2007, the Adjudicator refused permission to appeal but permission to appeal was granted by David Richards J on the 10 th August 2007.
The two documents
There are two documents which were brought into existence on the 10 th December 2004 and which are at the heart of the dispute. The first document is on a single sheet of paper and has the heading “CONTRACT TO SELL”. I will refer to this as “the first document”. The first document continues by describing itself as “this deed” but the document is executed under hand and not under seal and is not a deed. The first clause, which is unnumbered, states that the document “is meant to be a contract to sell” between Mr Ahmad as “the vendor” and Mr Oun as “the vendee”. The property was described as 318 Halliwell Road, Bolton which was defined as “the property”. Clause 2 of the document stated that the term “property” meant and included both the commercial property under the name of AIG Off Licence 318 Halliwell Road and the residential property. By clause 3 of the document, the vendor agreed not to remove any of the fittings, furniture and fixtures “which have now become part of deal under this contract”. By clause 4 of the document, the vendor agreed to sell the property to the vendee for £75,000. By clause 5, the vendee agreed to a payment of £5,000 as a sum in advance, leaving a remaining sum of £70,000 on completion. By clause 6, the vendor agreed to extend all possible co-operation to complete the sales process “in reasonable course of time”. The document recorded that it was signed by way of a commitment to abide by the agreement and in the presence of witnesses. The document bears the signature of Mr Ahmad and Mr Oun and the signature of one witness, a Mr Shakoori. There is a type written date on the document of 9 th day of December 2004 and a hand written date of 10 th December 2004.
The second document is a single sheet of paper with handwriting. This sheet of paper states the following:
“Building —£55,000
Fixtures and fittings —£5,000
Business —£15,000
Total = £75,000
+ stock”
The document refers to a deposit of £5,000 being paid on the 10 th
December 2004 and £70,000 “remaining”. The document then includes
this statement:
“£17,000 will be paid on completion”.
This document is signed by Mr Ahmad and Mr Oun. I will refer to this document as “the second document”.
The parties' cases before the Adjudicator
In his decision, the Adjudicator described the cases put forward by the parties. He stated that Mr Oun's case was that a draft written agreement was prepared by Mr Shakoori on the 9 th December 2004. On the 10 th December 2004, Mr Shakoori attended upon Mr Oun, Mr Oun's wife and Mr Ahmad at which time the terms of the draft first document were read out to those three persons in both English and Punjabi. Mr Oun's case was that he and Mr Ahmad then signed the first document and Mr Shakoori signed as a witness and the first document was then dated, possibly by Mr Ahmad, with the date of 10 th December 2004. Mr Oun gave Mr Ahmad a cheque for £5,000. Two hours after the first document was signed, Mr Ahmad returned to Mr Oun's premises and expressed concern about the absence in the first document of a term that apportioned the consideration of £75,000 between the leasehold property, the fixtures and fittings in it and the goodwill of the business conducted therein. There was also concern expressed that there was no mention of what was to be done about the trading stock. Mr Oun's case was that the parties then signed the second document recording the agreed apportionment of the £75,000 and that £17,000 should be paid for the stock.
In view of the difficulties which have been raised in relation to the interpretation of certain findings of fact later made by the Adjudicator, I have looked at the Statement of Case on behalf of Mr Oun. That alleged, in relation to the first meeting on 10 th December 2004, that Mr Oun and Mr Ahmad had agreed an apportionment of £75,000 at that first meeting; the relevant apportionment was £55,000 for the building, £5,000 for the fixtures and fittings and £15,000 for the business.
Mr Ahmad's case was radically different. He accepted that he signed the second document. He contended that he had also signed a blank sheet of paper with no writing or typescript of any kind. He says that it was intended that there would be written on the blank sheet of paper the same information as was recorded in the second document. Accordingly, it was Mr Ahmad's case that the first document which bears the signatures of Mr Ahmad and Mr Oun and Mr Shakoori was created after the event out of the blank sheet of paper he had signed for a different purpose.
The evidence before the Adjudicator
The Adjudicator recorded in his decision some of the evidence given at the hearing. He described Mr Oun's evidence about the events of 10 th December 2004. Mr Oun is recorded as giving evidence that there was “a discussion” at the first meeting between the parties about an apportionment of the price but no such apportionment was inserted in the agreement. Mr Oun also asserted that the sum of £17,000, mentioned in the second document was the wrong value of the stock at the time the arrangement was made on the 10 th December 2004. The Adjudicator also recorded that Mr Oun's evidence was supported by his wife who was present at both meetings on the 10 th December 2004 and that Mr Shakoori, who was named as a witness in the first document, also gave evidence. He is recorded as giving evidence that there was some discussion about the apportionment of the price but he says he was told by the parties that there was no need to refer to this in the first document that...
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