First defendant agreeing to sell leasehold interest to claimant — First defendant unable to comply with terms of agreement — First defendant selling interest to second defendant — Master granting claimant specific performance — Master altering terms of agreement — Whether second defendant having locus standi to challenge master’s decision
The first defendant agreed to sell the leasehold interest in a property to the claimant. As part of the sale agreement, she undertook to provide a letter from her landlord detailing any amounts outstanding under the lease. Being unable to provide such a letter, completion did not take place. The claimant registered a caution at the Lands Registry in order to protect his interest in the property.
The first defendant subsequently sold the property to the second defendant, who took possession and undertook maintenance works. The claimant commenced proceedings for specific performance of their agreement. The second defendant started Part 20 proceedings against the first defendant, claiming the refund of the purchase price and damages in the event of the claimant’s success.
At a hearing, the master ordered specific performance of the contract. Acknowledging that a letter would not be forthcoming from the landlord, he ordered an inquiry to be held into the amounts owing to the landlord. The second defendant appealed that decision. The issues for the court were, inter alia, whether: (i) the second defendant, who was a third party to the original sale agreement, had the locus standi to bring an appeal; and (ii) the master’s order for an inquiry was a rewriting of the parties’ contract or was permissible for the purposes of enabling specific performance.
Held: The appeal was dismissed.
1. The second defendant did have the necessary locus standi to challenge the finding on the original sale agreement. The outcome of that appeal vitally affected his interests.
2. The court was not limited to ordering a contract to be complied with in its original strict terms to enable its specific performance. Specific performance constituted an equitable remedy designed to give effect to the substantive elements of the contract, and some element of variation could be introduced in order to make it viable.
Michael Davie (instructed by Lawson Merchant) appeared for the claimant; Samuel Laughton (instructed by the Pro Bono Unit) appeared for the first defendant; Mark Warwick (instructed by Bude Nathan Iwanier) appeared for the second defendant.
Vivienne Lane, barrister
