Peyman v Lanjani

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
Judgment Date11 Apr 1984
Judgment citation (vLex)[1984] EWCA Civ J0411-3
Docket Number84/0158

[1984] EWCA Civ J0411-3







Royal Courts of Justice


Lord Justice Stephenson

Lord Justice May


Lord Justice Slade


1979 P No. 1461

Yadollah Khoush Peyman (Male)
Plaintiff (Appellant)
Mahoud Sherif Lanjani
First Defendant (Respondent)
Syed A. Rafique
Second Defendant (Respondent)
Syed Talha H. Rafique
Third Defendant (Respondent)

MR. DENNIS LEVY QC and Mr. P.R. TEVERSON (instructed by Messrs. Fremont & Co, Solicitors, London W1H OED) appeared on behalf of the Plaintiff (Appellant)

MR. R. REID QC and MR. R. WAKEFIELD (instructed by Messrs. A.L. Philips & Co, Solicitors, London W1M OBA) appeared on behalf of the First Defendant (Respondent)

THE SECOND DEFENDANT appeared in person

THE THIRD DEFENDANT appeared in person


The plaintiff Mr. Peyman and the first defendant Mr. Lanjani are Iranian citizens who speak no English. In 1979 they negotiated at exceptional speed an exchange of London properties through a third Iranian named Moustashari, who does speak English, and the second and third defendants, who are father and son and are both solicitors of the Supreme Court. The third defendant, Mr. Rafique junior, played little part in the negotiations and even less in the proceedings before Mr. Justice Dillon in 1981 and in this court. But the second defendant, Mr. Rafique senior, who speaks a little Persian, played a leading part until Mr. Lanjani left England for Iran in February 1979 and Mr. Peyman fell out with Mr. Rafique senior, and went to other solicitors a month later.


On 3rd May, 1979 Mr. Peyman issued a writ against all three defendants. His claims against the first and third defendants failed and a counterclaim by the first defendant against him succeeded. His claim against Mr. Rafique senior succeeded. Both Mr. Peyman and Mr. Rafique senior appeal to this court from the judgment of Mr. Justice Dillon given as long ago as 9th December 1981.


I shall begin as the judge did, with the facts, before tackling the claims to which they have given rise and stating my opinion on the right answers to those claims. The two properties concerned are a freehold dwellinghouse, 56 Victoria Road, Willesden, N.W.6., and a leasehold restaurant with flats above it, The Creperie, 26 James Street, W.1. Mr. Peyman bought the house in June 1978 and Mr. Lanjani took an assignment of the lease from Wellmack Properties Ltd. in October 1978. Mr. Peyman came to England on 1st December 1978 on a one month's visitor's visa, which he asked the Home Office to extend. He had worked for the Iranian Railway Service and had managed a restaurant in Iran. He wanted the house as a home for his wife and family, though her permission to stay here was refused extension by the Home Office. He wanted to acquire a business here in order that they and their children might obtain long term permission to stay here.


Mr. Lanjani had acquired the leasehold property with the help of Mr. Rafique senior, who acted as his solicitor in the transaction, and of Mr. Moustashari, who managed a hotel in Queensway and was at one stage to join in the purchase with Mr. Lanjani. The lease was for 25 years at a rent of £10,000 a year until the first rent review date; the landlords were two of Imperial Tobacco Company's pensions companies; their managing agents were Richard Ellis; and the lease contained covenants not to assign except to a permitted assignee who had previously entered into a direct covenant with the landlords to observe and perform the tenant's covenants, and not to assign to a permitted assignee without the prior consent in writing of the landlord which was not to be unreasonably refused. Mr. Lanjani and Mr. Moustashari seem to have had doubts whether the landlords would consent to Wellmack assigning the lease to an Iranian who spoke no English and presented the scruffy appearance which Mr. Lanjani presented. They therefore arranged, probably at Wellmack's suggestion, that Mr. Moustashari should impersonate Mr. Lanjani at an interview with Richard Ellis. At that interview Mr. Moustashari successfully impersonated Mr. Lanjani to a Mr. Bourne of Richard Ellis.


This was the first impersonation; for the exercise was repeated on 9th February 1979 for the purpose of obtaining the landlords' consent to Mr. Lanjani's assignment to Mr. Peyman. And this second impersonation would have been equally successful but for Mr. Peyman's knowledge of it and the use to which he subsequently put his knowledge.


At the beginning of 1979 there came into being an oral agreement between Mr. Peyman and Mr. Lanjani, arranged by Mr. Moustashari as broker, that Mr. Peyman would buy 26 James Street for £55,000, to be paid by his selling 56 Victoria Road to Mr. Lanjani at a value of £32,000, the balance of £23,000 "equalization money" being paid in cash. The equalization money offered was £20,000 increased by £3,000 either for the stocks of food and beverage in the restaurant or for the first quarter's rent from December 1978 to March 1979 paid by Mr. Lanjani. "There is no doubt at all", said the judge, "that both parties were extremely anxious that the transaction on which they had orally agreed should be carried through with the utmost speed. Mr. Lanjani wanted to get back to Iran owing to the troubles there, while Mr. Peyman wanted to buy a business quickly and get in control of the business and improve his situation with the Home Office".


Mr. Lanjani and Mr. Moustashari then suggested to Mr. Peyman that they should see if Mr. Rafique senior would act for them in this transaction. Mr. Peyman, mindful of the time it had taken his previous solicitors to complete his purchase of 56 Victoria Road, agreed and all three met Mr. Rafique senior at his office, with a friend of Mr. Peyman's to act as interpreter, on 30th January. There Mr. Rafique senior arranged that he would act for Mr. Peyman. Mr. Lanjani paid him two sums of £500, one in respect of Mr. Peyman's costs and the other in respect of Mr. Lanjani's costs, whether in connection with the assignment to Mr. Lanjani or the proposed assignment by Mr. Lanjani was left uncertain.


On 2nd February there were two further meetings, morning and evening. In the morning the same three persons attended Mr. Rafique senior at his office with a different interpreter and discussed what was called "under the table" money. When Mr. Lanjani bought the restaurant he had paid £59,400; £39,400 the price referred to in the contract documents, £20,000 "under the table" to some agents. But Mr. Peyman objected to a similar division of the agreed price of £55,000 into £40,000 for insertion in the documents and £15,000 "under the table". He gave Mr. Rafique senior a cheque for £25,000, but that was intended to represent £23,000, the equalization money over and above the value of 56 Victoria Road, plus £1,000 in addition to the £500 already paid in respect of Mr. Rafique senior's costs and another £1,000 paid in error and repaid shortly afterwards. In the afternoon Mr. Rafique senior was unwell and absent, but Mr. Rafique junior brought draft contracts and transfers in which the purchase price of 26 James Street was £55,000. Contracts in respect of both properties were signed by Mr. Peyman and Mr. Lanjani, and were exchanged; and they also signed forms of transfer. But it has not been suggested that on 2nd February the transfers were delivered in escrow or otherwise.


The restaurant agreement contained the following clauses:

"8. The National Conditions of Sale 18th Edition shall be deemed incorporated herein so far as the same are not inconsistent with the foregoing provisions and are applicable to sale by private treaty except that the rate of interest referred to therein shall be four per cent (4%) above National Westminster Bank Limited base rate in all cases and condition 13 of the said National Conditions shall not apply.

"9. This contract is conditional upon the granting of a Licence by the Landlord to the Assignment of the said Lease to the Purchaser PROVIDED THAT should the said Licence be refused and not available within a period of eight weeks from the date hereof then either party may rescind this contract by notice in writing whereupon the same shall be null and void and the deposit shall be refunded in full to the Purchaser….."

"11. It is hereby expressly confirmed and agreed that if for any reason whatsoever under this contract either the transfer of the leasehold interest in the property hereby contracted to be sold shall not be completed or the purchase of 56 Victoria Road, N.W. shall not be completed then both contracts shall be automatically declared null and void and all deposit received thereunder shall be (repaid) forthwith to the respective parties concerned and each party shall bear their own legal costs throughout.

"12. If prior to completion the purchaser shall be let into occupation of the premises hereby contracted to be sold, the purchaser hereby declares that he shall take such occupation as a mere licensee at will and will upon demand by the vendor or his solicitors forthwith vacate the same and shall until such date be responsible for all fixtures and fittings in the premises and shall upon demand replace the same if damaged in any way whatsoever and shall (during) the period of his occupation exercise the principles of good business management and shall in all respects keep the vendor and his estate indemnified against all costs, actions, claims, proceedings or demands in every way whatsoever".


Clause 6 provided for completion on 2nd April 1979,...

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