Containing all of the expressly agreed terms

Transcription

1 Land Law Case List Estates in Land - Freehold Exchange of Contracts Containing all of the expressly agreed terms Omissions Record v Bell The claimant sought specific performance of two contracts: one for the purchase of a house by the defendant and the other for purchase of chattels within the house. A further agreement was made under which the defendant would not purchase the house until the claimant produced evidence that he was the registered proprietor of he land. This agreement was not included in the final written sale contract between the parties and the defendant claimed that it was void for non-compliance with the LP(MP)A The court held that the defendant s agreement not to purchase the land until the claimant produced the relevant evidence was a collateral contract. A collateral contract designed to induce the party into main contract does not need to comply with the LP(MP)A S2 unless it is itself a contract of land. Both contracts were valid. Tootal Clothing Ltd v Guinea Properties Management Ltd Tootal clothing (the claimant at first interest and subsequently the appellant) were granted a lease by the respondents for 25 years. The appellant was to carry out shop-fitting works to the leased property and upon satisfactory completion of these works the respondent was to pay them The respondent failed to pay these monies and claimed in their defence that the contract relied on by the appellants was void as it did not comply with the LP(MP)A S2. The court held that these were two separate contracts. Scott LJ held that the contract for the shop-fitting was clearly distinct from the contract for the granting of the lease as indicated by the actions of the parties, and, as it was not a contract for land S2 did not need to apply. He stated that where a number of terms are hived off by the parties then this can form a separate contract and if it not a contract for land it need not comply with S2. Both contracts were held to be valid. Wright v Robert Leonard (Developments) The defendant agreed to sell the leasehold of a show-flat to the claimant, Wright. The original agreement had included an oral understanding that the furnishings and fixtures were to be included with the sale on the basis that completion would occur within 21 days. A schedule of the fixtures and fittings was attached to the claimant s contract. The completion

2 date was not met but the claimant eventually paid the amount due. Subsequently the defendant removed all of the fixtures and fittings. At first instance the judge found in favour of the claimant. On appeal Dillon LJ stated that he could not agree that there were two separate contracts as in Record v Bell and Tootal Clothing v Guinea. Instead the contract for the sale of the flat had two separate elements. As they were part of a single transaction for the land they were inseperable and therefore the whole arrangement needed to comply with the LP(MP)A S2. The term regarding the fixtures and fittings was oral and not included in the contract. Therefore the contract did not comply with S2 LP(MP)A. however the court decided that the equitable remedy of rectification was available where it would be unjust not to grant it. Therefore under S2(4) fixtures and fittings were included in the rectified contract. It follows that the remedy of rectification may be available when a term, previously agreed by the parties and intended to be included in the contract, is omitted and it would be unjust not to amend the contract. Oun v Ahmad The defendant owned the long lease of a property consisting of an off-licence on the lower floor and a residence on the upper floor. The claimant and defendant then came to an arrangement whereby the claimant would purchase the lease from the defendant. Two documents were drawn up to reflect this arrangement, the first entitled Contract to Sell and the second containing all the provisions as to how the purchase monies were to be apportioned. A disagreement as to the sale of the property arose and the claimant sued for breach of the first contract. It was held that the first contract did not comply with the LP(MP)A S2 and was therefore void and unenforceable. Furthermore rectification was not available to the claimant. A clear distinction is drawn between the situation in Wright v Robert Leonard where an agreed term was excluded by mistake and the situation here where the agreed term was expressly excluded despite the fact that the initial contract, thought by both parties to be enforceable, was void and unenforceable. Rectification is only available in a small number of situations and cannot be applied by the courts to remedy a defect in law. McCausland and another v Duncan Lawrie Ltd and another The claimants had contracted with the defendants to purchase a house and paid a small holding deposit with the remainder payable after completion. A price was agreed along with a completion date, after which the full deposit would become due. The defendant s solicitors subsequently discovered that the agreed completion date was a Sunday and required that the completion date be moved to the preceding Friday. The claimant s solicitors agreed orally. However completion failed to take place on the agreed Friday and the defendants issued a completion notice for the full amount of the deposit. This was paid but without prejudice to the claimant s right

3 to sue for specific performance of the contract for sale, the final price of which would reflect the full deposit paid. On appeal the court found that whenever a material term (such as the completion date) in a contract for the sale or disposition of the land is varied that variation must comply with the LP(MP)A s2. None of the judges expressly defined a material term but it seems that a material term is one which is essential to the nature of the contract. Contracts exempt from S2 Yaxley v Gotts and Another The claimant was a builder who requested a loan from the father of the defendant so he could purchase freehold land to develop as flats. The father of the defendant purchased the land instead but with the provision that the claimant could acquire the ground floor flats if he completed building work on the upper floor flats and operated as the managing agent for the entire building. The defendant then took over the freehold from his father and excluded the claimant despite a large amount of work already having been completed on the building. At first instance it was held that the defendant took over the freehold with the knowledge of the claimant s interest and held the leasehold of the ground floor flats for a period of 99 years on constructive trust for the claimant. Alternatively, the doctrine of proprietary estoppel could have been relied upon. The Court of Appeal confirmed this decision and dismissed the appeal. Estates in Land - Leasehold Certainty of Term Fixed Term Lace v Chantler A lease was granted by the defendant to the claimant for a period defined as the duration of the war. The defendant argued that a weekly tenancy had been created and, following the giving of the required notice, sought to repossess the property inhabited by the claimant. It was argued by the claimant that this lease was not of a weekly duration but of a certain longer duration, the period of which could be defined at a later date. Lord Greene MR made it clear that a lease must be created for a certain

4 term before the lease takes erect and, if not, then a period must be implied instead. The term purporting to be certain in this case was invalid and therefore it was held that there was a weekly tenancy. Ashburn Anstalt v Arnold A series of shops were being redevelopled. The occupier of one was reallocated to a different unit, rent free, under an agreement calling itself a licence. The arrangement was not for a fixed and certain term. The Court held that a lease had in fact been created and the occupant was entitled to exclusive possession. On the question of duration the licensee could bring the arrangement to an end at any time and the licensor could bring it to an end by giving one quarter s notice in writing. The court said that the ability of either side to bring the arrangement to an end meant that the term was not uncertain. OVERRULED in Prudential Assurance Co Ltd v London Residuary Body Periodic Term Ladies Hosiery and Underwear Ltd v Parker The claimant company obtained the freehold of land upon which the defendant leased a shed for business purposes. At a later date the Midland Bank became the owner of the freehold and leased a part of their land back to the claimant company. The claimant company refused to lease the land which the defendant occupied to the defendant and instead sought possession of the land from them. The defendant counterclaimed for a declaration that they were yearly tenants of the land. The general principle laid down by Maugham J was that a yearly tenancy is seen to be created when rent is calculated annually. Conversely in this case when rent was calculated weekly then a weekly tenancy was implied. This principle has been used by the courts ever since. Prudential Assurance Co Ltd v London Residuary Body A piece of land was sold to the Greater London Council. It was leased back to the former owner on a tenancy which was to continue until the land was required by the council for road widening purposes. On the abolition of the Greater London Council, the reversion passed to the LRB. The LRB had no authority to create roads but served six months notice bringing the tenancy to an end. The House of Lords held that the arrangement was for an uncertain period at the outset and was therefore not a lease, and the decision in Ashburn Anstalt was wrong on this point. The Court also held that the land was held under a yearly tenancy which had arisen by virtue of the tenant s possession and payment of rent by reference to a year. The case reaffirmed the need for certainty of term before a tenancy takes

5 effect but also firmly established the doctrine of an implied periodic tenancy should the expressly stated term fail for uncertainty. Berrisford v Mexfield Housing Co Operative Ltd The supreme court held that a lease for an uncertain term did not take effect as an implied periodic tenancy but took effect as a lease for her life, which statute converts into a lease for 90 years under the LPA 1925 s149(6). The Supreme Court made clear its dissatisfaction with the law regarding certainty of term and hoped for a change in the law in this area although it did not go so far as to overrule Prudential Assurance v London Residuary Body Javad v Aqil The claimant s entered into negotiations to lease his property to the defendant who was a manufacturer of leather goods. The defendant paid one quarter s rent in advance and while the negotiations continued, subsequently made payment of a further two quarter s rent. Negotiations eventually broke down and the claimant sought possession of the property by way of two week s notice to quit. The defendant argued that he held a yearly tenancy as he was in possession and paying rent, which had been accepted by the claimant. Possession was order by the county court and the defendant appealed. The Court held that where there is no intention to create legal relations a lease or tenancy will not be found despite the fact that one party has moved into possession and begun to pay consideration to the estate holder. In this case the occupation was granted on the basis that a lease would be agreed and concluded rather than as a tenancy. When the negotiations broke down it was reasonable for the estate holder to serve notice upon the party in possession. Equitable Leases Walsh v Lonsdale The claimant and the defendant entered into a lease agreement for a mill, subsequent to which the claimant entered into possession and began paying rent. The defendant commenced an action for distress in contravention of the lease agreement. The claimant then counter claimed for damages for illegal distress, specific performance, and an injunction. For various reasons the question before the court was whether the lease in equity prevailed over the lease at common law. It was held that where there is a conflict between equity and common law equity will prevail. A further point which was raised regarded the enforcement of an agreement. Not only do appropriate formalities for the agreement need to be complied with but it must also be possible for specific performance to be granted. For this to be the case you must examine equitable maxims such as clean hands and examine whether any of the parties have acted in such a manner as to affect their ability to claim the equitable remedy of specific performance.

6 Specific Performance Coatsworth v Johnson The claimant and the defendant entered into a lease agreement for a farm for 21 years, which was not under seal and therefore did not satisfy the requisite formalities for a legal lease at that time. One of the covenants contained with the lease was that the claimant must keep the farm in a good and husbandlike manner. The claimant never paid any rent and did not keep the farm in the manner prescribed in the agreement for the lease and the defendant demanded that the claimant quit the property. The claimant then sued the defendant for damages. It was held that the claimant has been in breach of the terms of the agreement and was therefore denied specific performance Freehold Covenants Rhone and another v Stephens Confirmed the rule in Austerberry v Oldham Corporation that positive covenants do not run with freehold land P & A Swift Investments (a firm) v Combined English Stores Group Plc This case was referred to the House of Lords to rule on the meaning of touch and concern the land. Lord Oliver of Alylmerton: the following provides a satisfactory working test for whether, in any given case, a covenant touches and concerns the land: (1) the covenant benefits only the reversioner for time being, and if separated from the reversion ceases to be of benefit to the covenantee; (2) the covenant affects the nature, quality, mode of user or value of the land of the reversioner; (3) the

7 covenant is not expressed to be personal (that is to say neither being given only to a specific reversioner nor in respect of the obligations only of a specific tenant); (4) the fact that a covenant is to pay a sum of money will not prevent it from touching and concerning the land so long as the three foregoing conditions are satisfied and the covenant is connected with something to be done on to or in relation to the land Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board - The defendant, the local drainage board, covenanted with eleven different owners of freehold land situated next to a river that it would widen and repair the banks of the river and maintain those banks in the future to prevent flooding. The landowners agreed that they would, in return, contribute to the costs of repair. One of the covenantees transferred her land to Mr Smith. The transfer agreement included a clause which expressly assigned the benefit of the covenant. Mr Smith orally leased his land on an annual basis to the second claimant. In 1946, the river burst its banks and Mr Smith s/his tenant s land was flooded. The claimants claimed that the repair work had not been carried out properly by the defendant and sued the defendant for damages. The Court of Appeal found in favour of the claimants. The court held that the LPA 1925 amended the previous common law rule that the successor in title might own the same legal estate as that owned by the original covenantee. Thamesmead Town Ltd v Allotey Identified two requirements that has to be satisfied for covenants to be enforced using the Halsell v Brizell doctrine. The first is that the condition of discharging the burden must be relevant to the exercise of the rights which enable the benefit to be obtained. In Rhone v. Stephens the mutual obligation of support was unrelated to and independent of the covenant to maintain the roof. The second is that the successors in title must have the opportunity to choose whether to take the benefit or having taken it to renounce it, even if only in theory, and thereby to escape the burden and that the successors in title can be deprived of the benefit if they fail to assume the burden. Equity Tulk v Moxhay - In 1808, Tulk sold land in the centre of Leicester Square (in London) to Elms, who covenanted to keep and maintain the said piece of ground and square garden, and the iron railing round the same in its then form, and in sufficient and proper repair as a square garden and pleasure ground, in an open state, uncovered with any buildings, in neat and ornamental order. The land in Leicester Square was later sold by Elms to Moxhay, who had