Vendor and purchaser — Contract for sale of land — Law Reform (Miscellaneous Provisions) Act 1989 — Letter signed by vendor and accompanying plan signed by vendor and purchaser — Whether letter and plan one document — Whether document signed by purchaser –Whether typing of purchaser’s name as addressee on letter a signature
Following an
oral agreement by which Mrs F agreed to sell 15.64 acres of land at £1,000 per
acre to the plaintiff, the plaintiff provided Mrs F with a letter addressed to
itself as the purchaser to that effect, and a plan, for her signature; only the
plan was signed by the plaintiff’s director, H. Mrs F signed the letter and the
plan. She died shortly afterwards. In the proceedings commenced by the
plaintiff, the defendant personal representatives of Mrs F contended that there
was no contract satisfying section 2 of the Law Reform (Miscellaneous
Provisions) Act 1989. The purchaser appealed a decision of the county court
judge striking out its action as showing no reasonable cause of action.
the plan was another document, the terms of which were incorporated in the
letter. Something enclosed with the letter was not the same document as the
letter. The letter, and not the plan, is the document which section 2(3) of the
1989 Act requires to be signed, H had not signed it and his signature on the
plan did not suffice. In any event the letter was not a contract for the sale
of land because it contained no obligations by the purchaser to buy the land
and pay the consideration. The typing of the name of the addressee purchaser on
the letter did not constitute its signature. Under the 1989 Act signature
should have the meaning which an ordinary person would understand it to have; the
old law on what constitutes a signature should not be retained.
The following
cases are referred to in this report.
Caton v Caton (1867) LR 2 HL 127
Durrell v Evans (1862) 1 H&C 174
Evans v Hoare [1892] 1 QB 593
Goodman v J Eban Ltd [1954] 1 QB 550; [1954] 2 WLR 581; [1954] 1 All
ER 763, CA
Leeman v Stocks [1951] Ch 941; [1951] 1 All ER 1043; [1951] 2 TLR
622
Williams
& Humbert v W&H Trade Marks (Jersey) Ltd
[1986] AC 368; [1986] 2 WLR 24; [1986] 1 All ER 129, HL
This was an
appeal from the decision of Judge Farrer QC, sitting in Lichfield County Court,
who had allowed an appeal from the district judge, who had dismissed an
application by the defendants to strike out the plaintiff’s action as showing
no reasonable cause.
Thomas Seymour
(instructed by Jennings Perks & Breakwell, of Walsall) appeared for the
plaintiff; Robert Wakefield (instructed by Burrell Davies, of Cannock)
represented the defendants.
Giving the
first judgment at the invitation of Balcombe LJ, Peter Gibson LJ
said: Since September 26 1989 contracts for the sale of land have had to be
made in conformity with section 2 of the Law of Property (Miscellaneous
Provisions) Act 1989. The short issue at the heart of this appeal is whether,
in the particular circumstances of this case, the requirements of that section
were satisfied. In proceedings brought in Lichfield county court by
the plaintiff purchaser, who sought specific performance of an alleged contract
for the sale of land, the defendant personal representatives of the vendor
applied to strike out the action as disclosing no reasonable cause of action.
That application was dismissed by District Judge Brown, but on appeal succeeded
before Judge Brian Farrer QC. The purchaser now appeals to this court with
leave of the judge.
The relevant
facts can be stated briefly. The late Miriam Fletcher owned 15.64 acres of land
to the rear of Fulfen Farm, Burntwood, Staffordshire. The purchaser, acting by
its director Geoffrey Hale, reached an oral agreement with Mrs Fletcher whereby
she was to sell that land to the purchaser for £1,000 per acre. Mr Hale caused
his secretary to type a letter on April 9 1994 for Mrs Fletcher to sign. The
letter bore Mrs Fletcher’s address in the top right-hand corner and the date
and it was addressed on the same page to Mr G Hale, Firstpost Homes Ltd, and
the address was given. The letter continued:
Dear Geoff,
re: Land at
rear of Fulfen Farm, Burntwood
Further to
our recent discussions I now agree to sell you the above land shown on the
enclosed plan which extends to 15.64 acres in consideration of the sum of
£1,000. (One thousand pounds) per acre.
Yours
sincerely.
Then there was
a gap, and underneath ‘M Fletcher (Mrs)’ was typed, the gap plainly being
intended as the space in which Mrs Fletcher was to sign.
A plan, being
a copy of an ordnance survey plan, was attached to the letter by a paperclip.
The plan shows the 15.64 acres, the boundary of which is marked in colour. Mr
Hale signed the plan at its foot. The letter and the plan were put into an
envelope and Mr Hale delivered it to Mrs Fletcher on the evening of Friday
April 9 1993. On Sunday April 11 he returned. Mrs Fletcher then signed the
letter in the space above her typed name and dated it April 11 1993. She also
signed the plan above Mr Hale’s signature and again put the date. No solicitor
appears to have been consulted by either party.
Mrs Fletcher
died very shortly afterwards on May 12 1993. Soon after her death her personal
representatives received a letter from Mr Hale on behalf of the purchaser,
claiming that there was a concluded agreement between the purchaser and Mrs
Fletcher for the sale of the land for £15,640. Proceedings commenced in November
1993. Among the defences raised by the defendants is an allegation of undue
influence by Mr Hale. But the point taken by the personal representatives on
this application to strike out is that there was no contract satisfying the
requirements of section 2.
Prior to the
coming into effect of section 2 the formalities governing the creation of a
contract of sale of land, which was enforceable by action, were contained in
section 40 of the Law of Property Act 1925 which, in turn, was derived from
section 4 of the Statute of Frauds 1677.
Following the
recommendations of the Law Commission in its report, Transfer of Land:
Formalities for Contracts of Sale etc of Land (1987) Law Com No 164,
section 2 was enacted, though in a slightly different form from that of the
draft Bill attached to the Law Commission’s report. Section 40 ceased to have
effect.
Section 2 is
headed — Contracts for sale etc of land to be made by signed writing. Section 2
(1), so far as material, reads as follows:
(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.
I need not read
any of the other provisions of section 2.
Section 2
brought about a markedly different regime from that which obtained hitherto.
Whereas under section 40 contracts, which did not comply with its requirements,
were not void but were merely unenforceable by action, contracts which do not
comply with section 2 are ineffective: a contract for the sale of an interest
in land can only be made in writing and in conformity with the other provisions
of section 2. Whereas an oral contract was allowed and enforceable provided
that it was evidenced in writing and the memorandum or note thereof was signed
by or on behalf of the party against whom it was sought to be enforced, oral
contracts are now of no effect and all contracts must be signed by or on behalf
of all the parties. Whereas the contract or the memorandum or note evidencing
the contract previously could be contained in more than one document, only one
document is now allowed (save where contracts are exchanged), although
reference to another document may be permitted in the circumstances laid down
in subsections (2) and (3). Whereas the memorandum or note needed for section
40 did not have to contain every term of the contract, all the terms must now
be contained in the document in question. Whereas the doctrine of part
performance allowed certain contracts otherwise unenforceable to be enforced,
that doctrine now has no application. It is, to my mind, plain that the 1989
Act, which, as its preamble indicates, was to make new provision with respect
to contracts for the sale or other disposition of interests in land, was
intended to make radical changes to such contracts in a way that was intended
to simplify the law and to avoid disputes, the contract now being in a single
document containing all the terms and signed by all the parties. Thereby it has
been sought to avoid the need to have extrinsic evidence as to that contract.
The district
judge took the view that it was arguable that the letter and the plan might be
one document for the purposes of section 2. On that ground he refused to
prevent the case from going to trial. The judge, however, on the appeal to him
took a more robust view. He regarded the letter as what he called the primary
document. And while acknowledging that the plan was necessary to make sense of
the contract and to define the land, the subject of that contract, and ‘to that
extent in layman’s terms it can therefore be viewed as an integral part of the
document which is in the letter’, he nevertheless said:
However, in
my view, the terms of the contract are set out in the letter. That document
refers to a plan … Had Mr Hale wished to have indicated his prior consent to
those terms, he, Mr Hale, could and should have signed the letter.
Accordingly,
he allowed the appeal and struck out the action.
Mr Thomas
Seymour, for the purchaser, now contends: (1) that the issue should have been
left to be determined by the trial judge after hearing all the evidence; and
(2) if it be appropriate to determine the issue before trial, then it is clear
that: (a) the letter and the plan are a single document signed in conformity
with section 2, because of Mrs Fletcher’s signatures on the letter and plan and
Mr Hale’s signature on the plan; and (b) if they are two documents,
nevertheless by causing the purchaser’s name to be typed on the letter as the
addressee, the purchaser signed the document for the purposes of section 2.
Mr Robert
Wakefield, for the personal representatives, submits that the judge was right
in holding that the document that had to be signed, but was not signed, was the
letter. He further submits that in any event Mr Hale’s signature merely
authenticated the plan and not the letter and Mr Hale did not sign the letter.
By a respondent’s notice he takes the point that the letter does not purport to
be a contract by which both parties undertake obligations. It purports only to
be an engagement by Mrs Fletcher to sell the property to Mr Hale or the
purchaser, but there is no corresponding engagement by Mr Hale or the purchaser
to purchase and provide consideration. As such, Mr Wakefield submits, it is
only an offer by Mrs Fletcher to sell without an acceptance of that offer or an
option without consideration passing to her.
I start with
the question whether this is an appropriate case for an application to strike
out. It is not a case, as it seems to me, where there is any possibility of
facts more favourable to the purchaser than appear in the particulars of claim
and Mr Hale’s affidavit emerging at the trial. I am prepared to assume that the
facts so appearing in those documents are true. If there is a trial, the undue
influence issue will have to be the subject of evidence and argument and that
will lengthen and add to the cost of, a trial. In my judgment, in conformity
with the guidance given by the House of Lords in Williams & Humbert
v W&H Trade Marks (Jersey) Ltd [1986] AC 368 (and see in particular
the remarks of Lord Templeman at pp435–436 and of Lord Mackay at p441), the
judge was justified in allowing the application to strike out to proceed and to
be determined. As I said at the outset, this appeal raises a short issue.
I turn to the
points of substance. In considering whether there is a contract to satisfy the
requirements of section 2, it is appropriate to bear in mind, as Mr Seymour
rightly reminded us, that the documentary material is homemade and not
professionally drafted, and that it did not contemplate any subsequent written
agreement. He also stresses the fact that this is not the case of a document
providing for signature by one of the parties in a particular place where that
party has failed to sign.
Is there one
document or two? In considering this point let me assume, without deciding,
that the letter and the plan constituted a contract. Mr Seymour submits that
the letter and plan are one document incorporating all the terms. He points out
that the term ‘document’ is not defined in the 1989 Act and as a matter of
ordinary language a document may comprise more than one page or piece of paper,
provided that the several pages or pieces of paper fall to be regarded as an
integral whole. The plan, he says, is referred to in the letter. It accompanied
the letter to which it was attached at all material times and the letter has no
meaning or effect as a contract without reference to the plan. He points out
that the description of the land is partly in the letter and partly in the
plan. That is true, but it does not seem to me to be determinative of the
question, one document or two, when on any footing there is a reference in the
letter to some other sheet of paper, to use a neutral term.
The point is a
short one and largely one of first impression, though in considering whether
the two sheets of paper are one document or two for the purposes of section 2
it is important to bear in mind that the section expressly contemplates that
one document may incorporate the terms of a second document by reference. It
seems to me that the natural way of looking at the letter enclosing the plan,
to use the significant language of the letter, is to treat the letter alone as
one document and the plan as another document, the terms of which are
incorporated in the letter. That incorporation comes about because of the
reference in the letter to the plan as showing what are the 15.64 acres of land
at the rear of Fulfen Farm. Something enclosed with
agree with Mr Wakefield, whose submissions I have largely repeated, and the
judge on this point. On that footing, the letter, and not the plan, is the
document which section 2(3) requires to be signed, and the signature of Mr Hale
on the plan does not suffice.
In the light
of that conclusion it is not necessary to consider Mr Wakefield’s submission
that even if there was one document comprising the letter and plan, the
signature of Mr Hale on the plan and not on the letter did not authenticate the
letter. I shall only say that I see great force in that submission based, as it
was, on the principle laid down in the House of Lords in Caton v Caton
(1867) LR 2 HL 127. That principle is that although the signature of a party
which is required for the purpose of the Statute of Frauds need not be placed
in any particular part of a written instrument, ‘[i]t must be inserted in the
writing in such a manner as to have the effect of ‘authenticating the
instrument’ or ‘so as to govern the whole agreement’ … or … ‘so as to govern
what follows”: per Lord Chelmsford LC at p139. In the present case it
is far from clear to me that the signature of Mr Hale on the plan was inserted
in the document in such a manner as to have that effect.
I shall
express my view on the other point that is taken by Mr Wakefield, by his
respondent’s notice, as to whether there is a contract at all in the form of
the letter, the terms of which I have already recited. A contract must contain
mutual obligations and a commitment by each party. If one reads the wording of
the letter dated April 9 it is, to my mind, plain that there is no commitment
by Mr Hale or the purchaser. The letter simply indicates what Mrs Fletcher is
agreeing to sell, that is to say, it is committing her to a sale, but the
letter does not contain any corresponding obligation by Mr Hale or the
purchaser to purchase the land and pay the consideration. Mr Seymour accepted
that there was no express commitment. Nevertheless, he submitted that such a
commitment and such an obligation on the part of the purchaser should be
implied. He points to the fact that Mrs Fletcher says, ‘I now agree to sell
you’. He submits that in the context the implication should be made.
Mr Wakefield
does not dispute that, in certain circumstances, it may be appropriate to imply
into a document that there is a commitment to buy, for example, if the document
was headed ‘contract for sale’ and there were obligations expressly undertaken
by the purchaser. But that is not this case. In those circumstances I agree
with Mr Wakefield that the letter is not a contract for the sale of an interest
in land. Accordingly, on this ground, too, I would agree with him that the
purchaser cannot succeed.
I shall also
deal with Mr Seymour’s further argument that if the letter was a contract,
there is a signature on it by the purchaser in the form of the name and address
of the purchaser as the addressee of the letter. Mr Seymour’s submission is
that the letter was ‘signed’ by the purchaser within the meaning of section 2
because, as the authorities on the earlier legislation show, a party’s name
printed or typed or written on a document which that party produces and which
is signed by the other party was capable of being a sufficient signature for
the purposes of the Statute of Frauds and section 40. Mr Seymour relied heavily
on what is stated in the discussion on section 2 in Emmet on Title (19th
ed) para 2.047, which reads as follows:
Signature
of writing — The word in the subsection is ‘signed’
and not ‘subscribed’, and therefore if one of the parties (or his authorised
agent) writes out an agreement containing, in a part of the document which
governs the whole, his name, but does not sign it, this name written in the
agreement may be sufficient signature (Caton v Caton (1867) LR 2
HL 127; Evans v Hoare [1892] 1 QB 593; Leeman v Stocks
[1951] Ch 941). On the other hand, if such document merely contains the name of
the party, and is not written or dictated by him, there will be no sufficient
signature as there is no recognition by him of his name to satisfy the statute
(Hucklesby v Hook (1900) 82 LT 117). Similarly, if an intention
can be gathered that the parties are actually to sign — for instance, an
agreement ending with ‘As witness our hands’ — this will prevent the name in
the body being a signature (Hubert v Treherne (1842) 11 LJCP 78).
I need not read
further from that paragraph.
It will be
noted that the statement of principle in the first sentence cited is in
somewhat qualified terms, viz that the written name ‘may be sufficient
signature’. Further, the two exceptions that are cited are not said to be the
only possible exceptions. They are simply given as illustrations. The whole
paragraph is based on previous authorities, decided on earlier legislation, and
not on the Act with which we are concerned.
The case which
is undoubtedly very close to the present case on its facts is Evans v Hoare
[1892] 1 QB 593. In that case the defendants’ agent had drafted a letter for
signature by the plaintiff, the defendants’ name and address being written in
the letter to show who was the addressee. It was held by the Queen’s Bench
Divisional Court (Denman and Cave JJ) that the letter was a memorandum or note
in writing of an agreement signed by the party to be charged or by some other
person lawfully authorised. Cave J commented at pp597–8:
No doubt, in
attempting to frame a principle, one is obliged to depart somewhat from the
strict lines of the statute. I am of opinion that the principle to be derived
from the decisions is this. In the first place, there must be a memorandum of a
contract, not merely a memorandum of a proposal; and, secondly, there must be
in the memorandum, somewhere or other, the name of the party to be charged,
signed by him or by his authorized agent. Whether the name occurs in the body
of the memorandum, or at the beginning, or at the end, if it is intended for a
signature there is a memorandum of the agreement within the meaning of the
statute. In the present case it is true that the name of the defendants occurs
in the agreement; but it is suggested on behalf of the defendants that it was
only put in to shew who the persons were to whom the letter was addressed. The
answer is that there is the name, and it was inserted by the defendants’ agent
in a contract which was undoubtedly intended by the defendants to be binding on
the plaintiff; and, therefore, the fact that it is only in the form of an
address is immaterial.
Mr Seymour
also referred us to Leeman v Stocks [1951] Ch 941 where an
auctioneer acting for a vendor by putting into a form for sale by private
treaty the vendor’s initials and surname before the sale, the form being signed
afterwards by the purchaser, was held by Roxburgh J to have signed a memorandum
for the purpose of section 40. Roxburghe J follows the earlier authorities like
Evans v Hoare but commented when reciting the facts that neither
the auctioneer nor the vendor signed the document in the ordinary sense of the
word.
Mr Seymour
submitted that the principle established by this line of authority should
continue to govern the question whether a contract has been signed by a party
for the purposes of section 2. He points out that the principle is a limited
one, that is to say, a contract is signed by a party when the document said to
create the contract contains the party’s name and that name is shown to have
been written or typed or printed by that party with the intention that the
document should be the contract, and it is not apparent from the document that
the parties are actually to sign in the conventional sense such as by signing
in a space intended for signature above the name.
Attractively
though those submissions were advanced by Mr Seymour, I am not persuaded by
them. In my judgment, it is an artificial use of language to describe the
printing or the typing of the name of an addressee in the letter as the signature
by the addressee when he has printed or typed that document. Ordinary language
does not, it seems to me, extend so far; and for this there appears to be the
powerful support of Sir Raymond Evershed MR in Goodman v J Eban Ltd
[1954] 1 QB 550, at p555 and of Denning LJ at p561, Denning LJ saying:
In modern
English usage, when a document is required to be ‘signed by’ someone, that
means that he must write his name with his own hand upon it.
In any event,
I do not accept that authorities on what was a sufficient signature for the
purposes of the Statute of Frauds and section 40 should continue to govern the
interpretation of the word ‘signed’ in section 2 of the 1989 Act. Prior to the
1989 Act the courts viewed with some disfavour those who made oral contracts
but did not abide by them. The courts were prepared to interpret the statutory
requirements generously to enable contracts to be enforced and in
relation to the question whether there was a sufficient memorandum evidencing an
agreement extrinsic evidence was admissible.
There are
statements by judges, who were called upon to consider what was a signature for
the purpose of those statutory provisions, which suggest that they regarded the
interpretation by earlier courts, in the generous manner that I have indicated,
as not being what they themselves would have decided if not constrained by
authority. In particular, in Durrell v Evans (1862) 1 H&C 174
both Crompton and Blackburn JJ expressed their doubts as to the way the matter
had been interpreted by earlier courts. I have already referred to the remark
of Cave J in Evans v Hoare in the first sentence of the passage
which I cited from his judgment and that supports the view that a liberal
interpretation had been placed by the courts on the statutory requirements. The
1989 Act seems to me to have a new and different philosophy from that which the
Statute of Frauds and section 40 had. Oral contracts are no longer permitted.
To my mind it is clear that parliament intended that questions as to whether
there was a contract and what were the terms of the contract, should be readily
ascertained by looking at the single document said to constitute the contract.
To accept Mr
Seymour’s contentions would be to allow the courts to consider matters outside
the claimed contractual document, such as what the parties subjectively
intended by the document, or by the name to be found on it, or who prepared the
document. For my part, I do not see why it is right to encumber the new Act
with so much ancient baggage, particularly when it does not leave the ‘signed’
with a meaning which the ordinary man would understand it to have. This
decision is of course limited to a case where the party, whose signature is
said to appear on a contract, is only named as the addressee of a letter
prepared by him. No doubt other considerations will apply in other
circumstances. I therefore do not accept Mr Seymour’s contention that a
signature of the purchaser appears on the letter.
I should deal
with one other matter. Mr Seymour, in the course of his submissions, applied to
amend his pleading so as to claim rectification of the alleged agreement in the
letter. He would wish to put after the words ‘extends to 15.64 acres’ the words
‘and it is confirmed that you agree to purchase the said land’. However that
will not avail the purchaser in the present case, given the conclusions that I
have reached that the document consists of the letter rather than the letter
and the plan and that there is no signature by the purchaser.
For these
reasons I would dismiss this appeal.
Agreeing, Hutchison LJ said: I agree that this
appeal should be dismissed for the reasons given by Peter Gibson LJ. In
particular, on the issue of whether the letter of April 28 1993 was signed by
or on behalf of the plaintiff, I am glad to be able to arrive at the conclusion
that the material words of section 2(3) of the Act mean what I think reasonable
people would, without the need for exposition by lawyers, understand them to
mean.
Also agreeing,
Balcombe LJ said: Of the
several points that have been raised on this appeal, I entertain no doubts as
to the following:
(1) The letter
and the plan did not constitute one document. They are clearly two documents.
To this extent I disagree with the views of Farrer J at p3D of his judgment
that ‘in layman’s terms it [the plan] cannot be viewed as an integral part of
the document which is the letter’. I do not find it particularly helpful to go
into an extended analysis of the circumstances where one or more papers can
together constitute a single document. Like the proverbial elephant, a document
may be difficult to define but is easy to recognise. I have no difficulty
recognising two documents, the letter and the plan, in the present case.
(2) As a
matter of construction the letter of April 9 1993 is not a bilateral contract.
It contains no promise by the plaintiff to purchase the land at the stated
price and I can see no justification for the implication of such an obligation.
If this action were to proceed it would undoubtedly have been necessary for the
plaintiff to have sought rectification of the letter.
(3) The
typescript ‘signature’ of the plaintiff on the letter. I am not prepared to
construe the word ‘signed’ in section 2(3) of the Law of Property (Miscellaneous
Provisions) Act 1989 by reference to the old learning on what amounted to a
signature of a note or memorandum sufficient for the purposes of the Statute of
Frauds or section 40 of the Law of Property Act 1925. To do so would, as Peter
Gibson LJ has said, defeat the obvious intention of section 2 of the 1989 Act,
which is to ensure that a contract for the sale of land must be made in
writing, in one document (leaving aside the position where contracts are
exchanged) and with the document being signed by or on behalf of each party
obviously so as to authenticate the document: see Goodman v J Eban
Ltd [1954] 1 QB 550. The clear policy of the section is to avoid the
possibility that one or other party may be able to go behind the document and
introduce extrinsic evidence to establish a contract, which was undoubtedly a
problem under the old law. If we were to accede to Mr Seymour’s submissions, it
would be necessary for him to call evidence at the trial to prove that the
letter with the typescript name and address of Mr Hale and the plaintiff on it
had been prepared by Mr Hale, so as to bring himself within the authority of Evans
v Hoare [1892] 1 QB 593. In my judgment, this would be a most retrograde
step. The short title of the 1989 Act is: ‘An Act to make new provision with
respect to … contracts for the sale or other disposition of interests in land
…’. I can see no justification for retaining the old law on what constituted a
signature under the Statute of Frauds or section 40, and every reason for
consigning it to the limbo where it clearly belongs and where, as Peter Gibson
LJ has said, many of the earlier judges would have consigned it had they felt
free to do so. It follows that I agree with Peter Gibson LJ that the views
expressed by the editor of the 19th ed of Emmet on Title should be
treated with considerable caution.
Appeal
dismissed.
