Anderson Antiques (UK) Ltd v Anderson Wharf (Hull) Ltd [2007] EWHC 2086 (Ch); [2007] PLSCS 203 underlines the continuing tension between the requirements of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, which requires contracts for the sale of land to be in writing, and the doctrine of proprietary estoppel.
The litigation arose out of a dispute over the sale of land that was ripe for development. This was set against the background of the collapse of a previous deal between the parties that resulted in hostile litigation. The developer asserted that it had since spent sums in excess of £60,000 in reliance upon a subsequent oral agreement with the seller; claiming that this gave rise to a proprietary estoppel in its favour. It registered unilateral notices at the Land Registry to prevent the land from being sold to any other party.
The seller attacked the notices on the ground that the developer had no interest in the land and sought damages, under section 77 of the Land Registration Act 2002, on the ground that the developer had registered the notices without reasonable cause.
The judge reviewed the evidence and decided that the developer’s claim was incompatible with contemporaneous documents placed before him. In addition, the developer had willingly participated in a tender process, in competition with other potential purchasers, after the date of the oral agreement upon which it relied. Participating in the tender process without protest plainly involved a consensual discharge of any oral contract that might have been made, especially since the developer submitted a bid to buy the property for less than it would have paid under the oral agreement upon which it relied.
The judge also doubted whether there could ever have been a proprietary estoppel in the developer’s favour; if the developer did have a case, most oral contracts would be enforceable through the doctrine of proprietary estoppel once a buyer had spent time or money in reliance upon an oral agreement.
The judge ordered the Land Registry to cancel the notices registered by the developer, and confirmed that the seller would be entitled to damages if the registration of the notices had prevented or delayed completion of a sale to a third party. Importantly, he ruled that the developer, and the company director/shareholder who procured the registration of the notices, would both be liable for any such loss. The judge’s reasoning was as follows. A party that registers a notice without reasonable cause commits the tort of breach of statutory duty under section 77 of the Land Registration Act 2002. However, a party that procures the commission of a tort can also be liable as a joint tortfeasor: see MCA Records Inc v Charlie Records Ltd [2003] 1 BCLC 650. The development company, a special purpose vehicle with nominal assets, was liable for the registration of the notices, but the sole company director/shareholder, who had caused the notices to be registered, had procured the commission of the tort for which he too was liable.
Allyson Colby is a property law consultant
