Walford and Others v Miles and Another
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BINGHAM,LORD JUSTICE STOCKER,LORD JUSTICE DILLON |
| Judgment Date | 19 December 1990 |
| Judgment citation (vLex) | [1990] EWCA Civ J1219-14 |
| Docket Number | 90/1190 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 December 1990 |
[1990] EWCA Civ J1219-14
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(His Honour Judge Bates, sitting as a deputy Judge of the High Court)
Royal Courts of Justice
Lord Justice Dillon
Lord Justice Stocker
and
Lord Justice Bingham
90/1190
MR. P. NAUGHTON, Q.C. and MR. A. MOON (instructed by Messrs Wedlake Bell) appeared on behalf of the Respondents (Plaintiffs).
MR. STANLEY BRODIE, Q.C. and MR. E. COHEN (instructed by Messrs Tarlo Lyons Randall Rose) appeared on behalf of the Appellants (Defendants).
This appeal arises in the disputed border country which divides legally binding contracts from engagements binding, if at all, in honour only. It is common ground that the first defendant agreed with the first plaintiff to act in a certain way. The plaintiffs contended that he did not do so and thus acted in breach of contract. The defendants contended that there was no contract in existence for the first defendant to breach. His Honour Judge Bates QC, sitting as a deputy judge of the Queen's Bench Division, upheld the plaintiffs' contention in a judgment delivered on the 21st July 1989. The defendants now appeal against that decision.
The first plaintiff, Mr. Martin Walford, is a solicitor in private practice. Mr. Charles Walford, the second plaintiff, is his brother. He is a chartered accountant with commercial experience here and in the United States. The third plaintiff is a company owned by the two brothers; it is of no significance in the case and I shall henceforth ignore it.
The defendants, Mr. and Mrs. Miles, are husband and wife. In 1969 Mr. Miles started a photographic processing business which was in due course transferred to PNM Laboratories Limited, a company which he and his wife owned. They also owned premises in Blackfriars Road, London SE1 which were let to the company and used as the company's business premises. The company prospered.
The company's auditors at all material times were a two-partner firm named Patel Khanderia & Co., the partners being Messrs Patel and Khanderia.
During 1985 Mr. Miles fell ill, and although Mrs. Miles continued to run the company's business they decided to explore the possibility of selling the company and its business premises. At this stage it seems that the only serious bidders were Mr. Patel and Mr. Khanderia, who proposed to buy through a company (Statusguard Limited) in which they both had substantial interests. The negotiation of sale terms began, and solicitors came in on both sides, but these negotiations came to nothing.
By about the end of 1986 Mr. and Mrs. Miles were once again minded to sell the company and its business premises. Discussions between Mr. Miles and Mr. Khanderia (acting for Mr. Patel or Mr. Patel and himself) were resumed and an offer of £1.9m put forward.
The plaintiffs heard that the business was for sale. There was a preliminary meeting on the 21st January and both plaintiffs met Mr. Miles on 23rd February 1987. On the following day they made a written offer to buy, subject to contract. The defendants consulted their solicitor, Mr. Randall of Tarlo Lyons Randall Rose, who on 10th March replied, summarising the terms upon which the defendants were willing to sell.
Mr. Patel had meanwhile also consulted his solicitor (Mr. Wright of Campbell Hooper Wright & Supperstone) and he wrote to Mr. Randall on 26th February enclosing Mr. Patel's proposed terms for purchase, subject to contract. Mr. Randall replied to Mr. Wright on 10th March, reporting that the defendants had received and were considering a bigger offer than Mr. Patel's. He added:
"I do not rule out the possibility that my clients will wish to proceed with your client's offer but in this event I would want to have some information as to how the purchase would be financed backed up by some concrete evidence that the finance is available."
By this time Mr. Patel was seeking an advance from Investors in Industry plc to help him finance the purchase and a visit was made to the company on about the 10th March.
On the 12th March 1987 there was a meeting at Mr. Martin Walford's office attended by him, Mr. Miles, Mr. Randall and (in his capacity as financial adviser, not counter-bidder) Mr. Khanderia. At this meeting the main terms of a purchase by the plaintiffs for £2m were agreed. On the 16th March Mr. Martin Walford (as solicitor for the plaintiffs) faxed a letter, expressly headed "Subject to Contract", to Mr. Randall. It recorded the agreement in principle which had been reached on the purchase price, the sum payable on completion, the deposit of the purchase price, the vendors' warranty of trading profit in the year following completion, the vendors' warranty of the company's net worth at the date of completion, the company's cash resources at completion and the company's cash flow forecasts. The letter also said:
"It is recognised that the matter remains subject to contract and that in any event Mr. Miles is unlikely to want to exchange formal agreements before Monday 6th April. Mr. Miles has however given an assurance that provided my clients give him a clear indication that they intend to proceed by no later than close of business on Wednesday 25th March he will not treat with any third party or consider any other alternative. My clients are now making their final arrangements and it is their earnest intention to provide that indication within the time specified."
Later that day Mr. Martin Walford faxed a further letter to Mr. Randall, again subject to contract, confirming that the plaintiffs had now given Mr. Miles their clear indication that they intended to proceed and anticipating that the respective firms of solicitors would start to deal with the draft contractual documentation. As these letters make clear, Mr. Martin Walford believed that Mr. Miles had at that stage undertaken to deal with the plaintiffs alone. The essential elements of a deal appeared to have been agreed subject to contract. Mr. Martin Walford expected Mr. Miles to instruct his solicitors accordingly.
Mr. Randall replied to these two letters in a letter of the 17th March, saying that he had no instructions to proceed with a sale to the plaintiffs. He added that Mr. Miles had not given any assurance about not treating with any third party or considering any other alternative and that consideration was still being given to the company's cash resources at completion. This letter was, however, overtaken by oral exchanges which occurred on the same day, 17th March. It is with these oral exchanges that this action and this appeal are primarily concerned.
The course of events on 17th March is best described in the judge's own words:
"The first defendant did speak on the telephone to the first plaintiff. It was a vitally important conversation. The first plaintiff accepts that the letter dated 18th March accurately reflects the telephone conversation on the 17th. And this would appear to be accepted, too, in para 7(xi)(xii)(xiii) of the defendants' amended defence. The first plaintiff gave oral evidence about the telephone conversation on 17th March and put it in a context. I shall have to refer to this in some detail. The first defendant did not give any oral evidence at all. Neither did Mr. Randall.
The first plaintiff said in evidence that he phoned Mr. Randall at about three o'clock on 17th March. He asked Mr. Randall if he had received the two letters dated 16th March which he had faxed to Mr. Randall. Mr. Randall said he had, and the first plaintiff then asked what was the position. Mr. Randall replied that he had received no instructions to answer. This was also what Mr. Randall said in his letter dated 17th March to the first plaintiff. The first plaintiff said he was most concerned by what Mr. Randall told him. He could not understand it because he said the first defendant had told him he would be in touch with Mr. Randall. The first plaintiff said he would speak to the first defendant direct, and Mr. Randall said he preferred that he did not, because 'you are a solicitor' and the first defendant was feeling pressurised. The first plaintiff said that may be, but he was also a principal and that it was of the utmost importance that he spoke to the first defendant direct. He also said that he was not putting the first defendant under pressure. The business was for sale for £2m and he would buy for £2m.
The first plaintiff said he had a meeting on the 17th with the solicitors Harbottle & Lewis at 4.15 and he had waited in his office until four o'clock and had not heard from the first defendant. He therefore phoned him. The first defendant said he was in the middle of supervising a difficult order and could be phoned back between 6.00 and 6.30. The first plaintiff did this at 6.15 from the offices of Harbottle & Lewis.
The first plaintiff said he told the first defendant of his conversation with Mr. Randall and that he found it perturbing that nothing was happening after their previous conversations and his letters to Mr. Randall. He asked if the first defendant had a problem, to which the answer was 'no'. He asked: 'Do you have a problem with me or not?' 'No,' said the first defendant, according to the first plaintiff's evidence, 'nothing personal but I have some reservations'. These related to the payments to be made for the business, and the first plaintiff agreed with what the first defendant required.
The first defendant also...
To continue reading
Request your trial
-
Climax Manufacturing Co Ltd v Colles Paragon Converters (S) Pte Ltd
... ... Another indication that the agreement was not simply for the sale of a machine is ... Some are more detailed than others but the degree of detail required for certainty depends on the ... He relied on Walford v Miles [1992] 1 All ER 454 which held that an agreement to negotiate in ... ...
-
Bernhard Schulte GmbH & Company Kg and Others v Nile Holdings Ltd
...of the kind alleged. Under English law there is no general duty to act in good faith – see Chitty on Contracts at paragraph 1–109 and Walford V Miles [1992] 2 AC 128 per Lord Ackner at page 138. Any attempt to imply a term into the SPA would not succeed because it would be inconsistent with......
-
Karim Frederick Dhanani v Serge Crasnianski
... ... a draft of the letter and term sheet dated 15 February 2007 and another version of the Business Plan. The Defendant recollected that the meeting ... The Claimant's recollection was that whilst he agreed some points, others were not agreed and others were the subject of a compromise. The ... Reliance was placed on the decision of the House of Lords in Walford v Miles [1992] 2 AC 128 ... Counsel for the Claimant said that the present ... ...
-
Lombard North Central Plc v GATX Corporation
...subject to any legally enforceable obligation under it (or any other provision of clause 9.4) because, as Mr Hapgood explained citing Walford v Miles, [1992] AC 128, an agreement to negotiate in good faith "has no legal content". The second declaration concerns whether, if the agreement to ......
-
THE ENFORCEABILITY OF ALTERNATIVE DISPUTE RESOLUTION AGREEMENTS
...Alstom Technology Ltd[2009] 3 SLR(R) 936 at [31]. 72 See para 9 above. 73 See the English Court of Appeal's decision in Walford v Miles[1991] 2 EGLR 185 at 188. 74 International Research Corp plc v Lufthansa Systems Asia Pte Ltd [2013] 1 SLR 973 at [107]–[110]. 75 It has been said that clea......