Summary

A master had correctly concluded that a letter relating to the sale of freehold premises had not complied with the Law of Property (Miscellaneous Provisions) Act 1989 s.2 because it had not identified the purchaser and had failed to incorporate the obligation to purchase the property.

Facts

The appellant (F) appealed against a decision to dismiss his claim for damages against the respondent company (B) in connection with the sale of freehold premises. F also applied to amend his claim. F asserted that it had reached an oral agreement with B to purchase freehold premises and that the express terms of the agreement had been incorporated into a letter. F alleged that, in breach of that agreement, B refused to complete the sale of the premises and had conveyed it to a third party. B applied for summary judgment on the ground that the agreement had not complied with the requirements of the Law of Property (Miscellaneous Provisions) Act 1989 s.2. The master accepted that s.2 had not been complied with as the letter did not identify the purchaser and failed to incorporate the obligation to purchase the property. F submitted that (1) the master was wrong to conclude that the letter had not complied with s.2; (2) he should be permitted to make an application to amend the claim so as to raise either a rectification or restitution claim.

Held

(1) The master had correctly concluded that the letter had not complied with s.2. There was no written record in the letter of the mutual obligations to buy and sell the property, particularly the obligation to purchase the property, Ruddick v Ormston (2005) EWHC 2547 (Ch), (2006) 1 P & CR DG21 applied. Consequently, the agreement was ineffective (see para.36 of judgment). (2) The function of rectification was to correct a common mistake in the way in which a transaction had been reduced to writing. The proposed rectification claim was misconceived as there was nothing in the letter which needed to be corrected and there was no mistake about the factual or legal nature of the bargain which the parties intended to record, Oun v Ahmad (2008) EWHC 545 (Ch), (2008) 13 EG 149 (CS) considered (paras 40-44). (3) F was permitted to make an application for permission to amend his claim in order to raise a restitution claim. F would have to satisfy the court, that the restitution claim had a reasonable prospect of success, that, in view of the expiry of the limitation period, it arose out of the same or substantially the same facts as the existing claim and that it would not be unfair to B to allow it to be pursued. Consequently, F's appeal was allowed to the limited extent of permitting him to make an application for permission to amend so as to raise the restitution claim (para.49).

Appeal allowed in part