Options — Specific performance — Freehold property — Tenancy of property — Tenants holding option to purchase freehold — Option unregistered — Purported exercise of option — Landlord selling to wholly-owned subsidiary for sole purpose of avoiding obligation to sell to tenants — Whether transaction a sham — Whether remedy of specific performance available
The appellants were the trustees of a working men’s club. In that capacity, they held a tenancy of the club premises and a long-standing, unregistered option to purchase the freehold from the first respondent landlord. In 2002, the appellants sought to exercise the option. Since the first respondent did not want to sell to them, it instead sold the property to the second respondent, its wholly-owned subsidiary, for £7,996, on the basis that the option, not having been registered as a land charge, would be void against a purchaser of the legal estate for money or money’s worth by virtue of section 4(6) of the Land Charges Act 1972.
The appellants sought specific performance to require a sale of the freehold to themselves. Refusing that relief at first instance, HH Judge Pelling QC found that the sale to the second respondent had not been a sham, notwithstanding that the purchase price was considerably below the property’s true value of more than £100,000 and that the sale had taken place for the sole purpose of avoiding the obligations under the option. He held that specific performance could not be ordered against either the first respondent, which no longer owned the property, or the second respondent, against which the option was not binding. He instead awarded damages for breach of contract. The appellants appealed. They submitted that it was open to the court to make an order requiring the first respondent to direct the second respondent to transfer the property to them. By a respondent’s notice, the respondents contended that, contrary to a finding by the county court judge, part of the land subject to the option had been included in a 1961 sale by the first respondent to the local authority, such that the appellants were now purporting to exercise the option in respect of part only of the option land, which they were not entitled to do.
Held: The appeal was allowed.
Specific performance could not be ordered against the second respondent. Its purchase of the property had not been a sham. There had been a genuine sale to a genuine company, for a genuine, albeit low, price, in an overt transaction. The true nature of the transaction was exactly what it purported to be, namely a transaction intended to enable the respondents to assert and rely upon legal rights in order to defeat the claim to enforce the option agreement. However, specific performance could be ordered against the first respondent, which could be required to procure a transfer by the second respondent to the appellants; the first respondent could, if necessary, change the directors of the second respondent to overcome any objection from their side. The respondents had not proved on the facts that the land included in the 1961 sale to the local authority had ever been comprised in the appellants’ tenancy and option.
The following cases are referred to in this report.
Elliott v Pierson [1948] Ch 452; [1948] 1 All ER 939, Ch
Gilford Motor Co Ltd v Horne [1933] Ch 935, CA
Jones v Lipman [1962] 1 WLR 832; [1962] 1 All ER 442, Ch
Midland Bank Trust Co Ltd v Green (No 1) [1981] AC 513; [1981] 2 WLR 28; [1981] 1 All ER 153; (1981) 42 P&CR 201, HL, [1980] Ch 590; [1979] 3 WLR 167; [1979] 3 All ER 28; (1980) 39 P&CR 265, CA
Snook v London & West Riding Investments Ltd [1967] 2 QB 786; [1967] 2 WLR 1020; [1967] 1 All ER 518, CA
Trustor AB v Smallbone (No 4) [2001] 1 WLR 1177; [2001] 3 All ER 987, Ch
This was an appeal by the appellants, Margaret Coles, Harry Hunter and Keith Parker, from a decision of HH Judge Pelling QC, sitting in Leeds District Registry, refusing their claim for specific performance against the respondents, Samuel Smith Old Brewery (Tadcaster) (an unlimited company) and Rochdale & Manor (Builders) (an unlimited company), in respect of an option to purchase freehold property.
Godfrey Jarand (instructed by Bailey & Haigh, of Goole) appeared for the appellants; Gary Cowen (instructed by Bromet & Sons, of Tadcaster) represented the respondents.
Giving judgment, Rimer LJ said:
Introduction
[1] This appeal is against the order dated 9 November 2006 of HH Judge Pelling QC sitting in Leeds as a judge of the Chancery Division. The claim was a purchasers’ action for specific performance of a contract constituted by the appellants’ exercise of an option. The judge dismissed that claim as against the first respondent and dismissed all claims as against the second respondent. He did, however, direct an inquiry as to the damages payable by the first respondent to the appellants for breach of contract. By the appeal, the appellants, represented by Mr Godfrey Jarand, ask this court to reverse the judge’s refusal to order specific performance and to order it against both respondents. The respondents, represented by Mr Gary Cowen, ask the court to affirm the judge’s judgment for the reasons that he gave and also to uphold it in reliance upon a point that the judge rejected, one that is raised by a respondent’s notice served by the first respondent. I will deal first with the appellants’ challenge to the judge’s reasoning for refusing them the relief that they claimed, and will then deal separately with the point raised by the respondent’s notice.
Facts
[2] The relevant facts fall within a small compass. The appellants are the trustees of the Ward Green Working Men’s Club (the trustees). The club is a registered society to which the Friendly Societies Act 1974 |page:160| applies. The trustees and their predecessors have for many decades been the tenants of premises at Mount Vernon Road, Ward Green, Barnsley, South Yorkshire (the property). They occupy it under a tenancy agreement dated 22 March 1984, that agreement having replaced at least one earlier tenancy agreement granted at the end of 1958. The current tenancy is terminable on 12 months’ notice, although it is one to which the provisions of Part II of the Landlord and Tenant Act 1954 apply. The landlord is, and has always been, the first respondent, Samuel Smith Old Brewery (Tadcaster), an unlimited company (the brewery). The property is a purpose-built clubhouse.
[3] On some uncertain date in 1958, the brewery (at that stage a limited company), acting by its director Mr Brooke, signed an informal document. It is apparent from this that the brewery was about to enter into a tenancy agreement with the club, and the document granted the club an option to “purchase the premises at any time by giving six months’ notice of intention at a price to be mutually agreed upon”. That formula for fixing the price immediately provokes the thought that the option, or any agreement purportedly constituted by its exercise, would or might be void as a mere agreement to agree. I need, however, say no more than that that point was one of many argued before the judge, he ruled against it and there is no appeal against his decision in that respect.
[4] On 17 May 2002, the trustees gave a notice to the brewery exercising the option. It was stated to expire on, and to require completion by, 30 November 2002. On the face of it, the effect of that notice was to constitute a contract for the purchase of the property by the trustees from the brewery. The brewery, however, plainly did not wish to be compelled to sell the property to the trustees, and it considered that it had a number of reasons as to why the purported contract was unenforceable. By way of giving itself yet another escape route from it, on 5 December 2002 it sold and transferred the property to its wholly-owned subsidiary, Rochdale & Manor (Builders), also an unlimited company (Rochdale). Rochdale had been incorporated in 1989; it was and is in the business of developing and selling property and it already owned a number of properties. The sale was for £7,996.13, the value at which the property was shown in the brewery’s books, being admittedly below its then market value. In June 2005, the trustees obtained a valuation of the property as at 30 November 2002, which I understand to be of its value subject to the trustees’ tenancy. The valuation was at £120,000, alternatively £110,000, depending upon a point about the repair of the property that I need not detail. I do not suggest that that is an agreed value, but there is, I understand, little doubt that the value of the property was very substantially in excess of the price that Rochdale paid.
[5] The particular merit that the brewery claimed to identify in the transaction with its subsidiary was as follows. As at the date of the conveyance to Rochdale, the title to the property was unregistered. The option was in the nature of an estate contract falling within Class C(iv) of section 10 of the Land Charges Act 1925 (the 1925 Act) and of section 2 of the successor Act, the Land Charges Act 1972 (the 1972 Act). In order to protect their rights under the option, and to enable it to be enforced against any purchasers of the property from the brewery, the trustees should have registered it in the brewery’s name as a Class C(iv) land charge in the register of land charges. They had, however, at no stage done so. The effect of section 4(6) of the 1972 Act (as also of section 13(2) of the 1925 Act) was that that failure meant that the option would be “void as against a purchaser for money or money’s worth… of a legal estate in the land charged with it, unless the land charge is registered in the appropriate register before the completion of the purchase”.
[6] In particular, the brewery’s scheme was that it would be able to meet any claim to enforce the purchase of the property by asserting that it no longer owned it and so could not convey it; and as for Rochdale, because it was a “purchaser for money… of a legal estate” in the property, it could assert that not only was it not a party to the grant of the option or to the contract constituted by its exercise but also that both the option and contract were, for want of due registration, void against it. I record that, following the sale to Rochdale, the title to the property was registered at HM Land Registry under title number SYK457665, but nothing turns on that.
Proceedings before Judge Pelling
[7] After a considerable pause, the trustees issued the present proceedings on 9 December 2005. They joined the brewery as the first defendant and Rochdale as the second defendant. They claimed against both defendants specific performance of the purchase contract constituted by the exercise of the option. The joint defence raised a number of defensive arguments. On 29 June 2006, there was an order for the trial of various preliminary issues, including whether the trustees were entitled to specific performance of the contract that they claimed had been constituted by the exercise of the option. Those issues came on for hearing before Judge Pelling and resulted in his judgment and order of 9 November 2006. The respondents raised 11 separate points by way of defence to the claim for specific performance. Success on any one of them would have been sufficient. As it was, 10 failed and one succeeded, that success resulting in the dismissal of the specific performance claim. The effect, however, of the trustees’ success on all the other issues resulted in the judge upholding the option and its exercise as valid and as giving rise to a valid and enforceable contract for the purchase of the property. His refusal, however, to order specific performance meant that the trustees were at most entitled to damages for breach of contract against the brewery, and the judge ordered an appropriate inquiry. The appeal is against his refusal to order specific performance.
[8] The key to the judge’s decision was the decision of the House of Lords in Midland Bank Trust Co Ltd v Green (No 1) [1981] AC 513. That case also concerned the grant of an unregistered option to purchase land, one granted by father to son. The father wished to deprive his son of the benefit of the option and so he conveyed the land to his wife for £500, the land then being worth some £40,000. When the son found out about it, he sought to exercise the option, and then sued his father and his deceased mother’s estate for specific performance as well as for damages for conspiracy by his parents. Oliver J held that the sale to the mother was a genuine sale and was not a sham (see, in particular, Midland Bank Trust Co Ltd v Green (No 1) [1980] Ch 590, at p613E) and that she was “a purchaser of a legal estate for money or money’s worth” against whom the unregistered option was void under section 13(2) of the 1925 Act. It followed that the claim for specific performance against the mother’s estate failed.
[9] This court reversed that decision, but the House of Lords restored it. Lord Wilberforce explained the case as being a plain one and that the mother was a person against whom the option was void for non-registration. There was argument in the House as to whether it was also necessary for the mother to show that she was “in good faith”, but it was held that there was no such requirement in the case of a purchaser relying upon section 13(2). The reason was that if the position were otherwise, it would bring with it the necessity of enquiring into a purchaser’s motives and state of mind, and the case in question showed the difficulties that that could entail.
[10] The judge in the present case regarded the sale by the brewery to Rochdale as just as genuine a sale, albeit also at a low price, as the sale by the father to the wife in Midland Bank. He rejected any suggestion that it was a sham in the familiar sense explained by Diplock LJ in Snook v London &West Riding Investments Ltd [1967] 2 QB 786. The effect of that finding, linked with the decision in Midland Bank, was that, subject to the arguments advanced by the trustees, the option was void against Rochdale.
[11] The rival argument turned primarily on the well-known case of Jones v Lipman [1962] 1 WLR 832. In that case, the first defendant agreed to sell some land to the plaintiffs for £5,250. He soon repented of his bargain. He changed solicitor, which, shortly before the day fixed for completion following the service of a notice to complete, informed the plaintiffs’ solicitor that the defendant had “today executed a transfer of the property to a third party and is in breach of contract to your clients…”. It offered to pay damages. When requested, the first defendant’s solicitor declined to provide details of the purchaser. |page:161| Proceedings for specific performance against the first defendant followed, in turn followed by a summons for summary judgment. At the first hearing, the first defendant informed the court that he had transferred the property to Alamed Ltd, which was then joined as the second defendant. To shorten the details, it ultimately emerged that Alamed was a company in the first defendant’s control to which he had sold the property for £3,000, of which Alamed had so far raised the £1,564 required to redeem the mortgage on the property, the balance of the purchase price remaining outstanding.
[12] The summary judgment application came before Russell J. He ordered specific performance against both the first defendant and Alamed. As against the first defendant, he did so on the basis that specific performance is available against a contracting vendor that has it in its power to compel another party to convey the property in question. The judge regarded that proposition as one of general principle, but as also anyway supported by Elliott v Pierson [1948] Ch 452. The first defendant had the necessary power over Alamed, which was a company he wholly owned.
[13] In addition, Russell J also ordered specific performance against Alamed. He did so on the basis, at p836, that Alamed “is the creature of the first defendant, a device and a sham, a mask which he holds before his face in an attempt to avoid recognition by the eye of equity”. He found support for that conclusion in Gilford Motor Co Ltd v Horne [1933] Ch 935. That was a case in which an individual who was subject to covenants restricting his trading activities incorporated a company through which he then carried them out. An injunction was granted against both the individual and his company. This court upheld Farwell J’s conclusion that the company had been formed as a mere “cloak or sham” for the purpose of enabling the individual to breach the covenants that he had entered into.
[14] Judge Pelling did not regard Jones as carrying the day in favour of the trustees. He pointed out that no point was raised in it to the effect that the plaintiffs’ purchase contract was void against Alamed for want of registration under the 1925 Act. Judge Pelling was also right to view the case as one in which Russell J had regarded the establishment of and transfer to Alamed as in the nature of a sham established exclusively for the purpose of defeating the plaintiffs’ claim for specific performance. Judge Pelling did not say so, but I consider that it would probably follow that, on that basis, and even if a point under the 1925 Act had been raised, it would have made no difference to the outcome before Russell J.
[15] The trustees’ argument before the judge was that Midland Bank fell to be distinguished because there the sale was to the vendor’s wife, an individual, whereas in both Jones and in the present case the sale was to a company controlled by the transferor. The judge’s view was that that distinction was a valid one only if, in the present case, he could pierce the veil of incorporation and regard both respondents as, in effect, one and the same corporate person. He explained that that was something that could not be done lightly. He referred to various authorities on veil piercing, and said that Jones had been regarded as one in which Russell J had pierced the veil on the basis that he had regarded Alamed as a “device and a sham, a mask…”. In the judge’s view, there was, however, no more basis in the present case for regarding the sale to Rochdale as a like device than there was in the case of the sale to the wife in Midland Bank. He said that it might have been different if it had been proved that Rochdale was acting as the agent or nominee of the brewery, just as it might have been in Midland Bank if it had been proved that the wife had been acting as the agent or nominee of her husband. The judge’s conclusion was that the sale to Rochdale was a genuine one and that Rochdale was entitled to assert that the contract was void against it. It followed that the judge held that no order for specific performance could be made against Rochdale. Nor, although the judge did not say why, was he prepared to make any such order against the brewery.
Appeal
[16] On this appeal, Mr Jarand, for the trustees, submitted that as against the brewery there is no answer to the claim for specific performance. Clear authority for that is to be found in the first limb of the decision of Russell J in Jones. The brewery is the contracting vendor; it is within its power to procure its wholly-owned subsidiary Rochdale to transfer the property to the trustees, and, I might add, if the directors of Rochdale were to display any unwillingness to co-operate towards that end, it would be open to the brewery to replace them with directors who would so co-operate.
[17] If that is right, the trustees also do not need an order against Rochdale, but Mr Jarand nevertheless argued for such an order. His submission was that this case is indistinguishable from Jones and that this court should find that the sale to Rochdale was tainted with the like impropriety as that with which Russell J apparently regarded the transaction in Jones as being tainted. It follows, he said, that Judge Pelling could and should have been prepared to pierce the corporate veil, identify Rochdale with its parent and make an order for specific performance against both companies.
[18] In advancing that argument, Mr Jarand disclaimed the suggestion that the sale to Rochdale was a “sham”, although that is in part how Russell J characterised the sale to Alamed in Jones. Mr Jarand argued instead that it was enough to justify the court in piercing the veil that the transaction between the brewery and Rochdale involved an impropriety, namely the admitted motive of an attempt to defeat the trustees’ rights. That way of putting the case posed some difficulty for Mr Jarand. In Trustor AB v Smallbone (No 4) [2001] 1 WLR 1177, in [14], Sir Andrew Morritt V-C identified three suggested (in part overlapping) categories of case in which it may be appropriate to pierce the corporate veil, including cases: (i) in which the company was shown to be a façade or a sham; and (ii) where the company was involved in some impropriety. Sir Andrew Morritt regarded Jones as illustrating at least the first category. However, in [22], he expressed a cautious view as to whether mere proof that the company was involved in an impropriety would be sufficient to justify the court in piercing its veil of incorporation. It was, so it seemed, a necessary part of Mr Jarand’s argument that the suggested impropriety in the present case was nevertheless sufficient so to justify the court.
[19] For my part, although recognising the obvious factual similarity between the circumstances of Jones and the present one, I feel unable, first of all, to question the judge’s conclusion that the transaction between the brewery and Rochdale cannot and should not be regarded as a sham, any more than was the transaction between the husband and the wife in Midland Bank. Both transactions were entered into for the purpose of defeating the rights of the contracting purchaser, with the added ingredient that, in both cases, the defendants were seeking to exploit the failure of the grantees of the option to protect their own interests by duly registering the option as an estate contract. In each case, the scheme underlying the transactions was either going to work or it was not. Oliver J’s view in Midland Bank was that the transaction was not a sham. So was Judge Pelling’s view in the present case. The sale by the brewery to Rochdale was to a genuine company, for a genuine (albeit low) price and the transaction was carried out overtly for all to see. The true nature of the transaction was precisely what it purports to have been, namely a transaction that was intended to enable both brewery and Rochdale to assert and rely upon legal rights that would enable them to defeat the claim to enforce the option agreement. I would not disturb the judge’s rejection of the argument that the transaction involved a sham, and I have indicated that nor did Mr Jarand in terms argue otherwise. I have also indicated the rather narrow basis upon which he did argue that the court could and should nevertheless conclude that, as he put it, there was as between the brewery and Rochdale in fact no sale, no vendor and no purchaser. That is, of course, another way of saying that the transaction was a sham, which is what the judge held it was not, although the route towards that conclusion was based by Mr Jarand exclusively upon the alleged impropriety of the transaction.
[20] I regard that as a difficult submission to make good, and I was not persuaded that it provided a sufficient basis upon which to conclude that the judge should in fact have regarded the transaction as a sham. I prefer, however, to express no concluded view upon it. Its only object |page:162| was for the purpose of obtaining an order for specific performance against Rochdale. If, however, such an order can and should be made against the brewery, which is plainly in a position to procure Rochdale to complete the contract, there is simply no need for any such order against Rochdale. As to whether an order should be made against the brewery, and subject to the point raised by the respondent’s notice, I am satisfied that it should. The judge appears to have concluded that since no order could be made against Rochdale direct, no order for specific performance should be made against the brewery. He did not explain why and I consider that there is no answer to the making of such an order. Jones provides clear authority for the view that such an order can be made and I cannot see why, subject as aforesaid, the brewery should not now be compelled to procure Rochdale to transfer the property to the trustees in completion of the contract. Mr Cowen’s only answer to this was that the court should not so order because the contract is void against Rochdale for want of registration. I agree that it was. However, I see no reason why that provides any sufficient ground on the facts of this case justifying the court in declining to order specific performance against the brewery.
Respondent’s notice
[21] I turn to the point raised by the respondent’s notice. The point here is that it is said that part of the land that was the subject of the option agreement was sold in 1961 by the brewery to Worsbrough Urban District Council (Worsbrough). When, therefore, the trustees purported to exercise the option in 2002, they were doing so in respect of part only of the option land, which it is said they were not entitled to do under the option agreement. If the argument is right so far, the option agreement was of course as void against Worsbrough as it was and is against Rochdale and, in any event, the trustees did not purport to exercise it against Worsbrough as well. That is no doubt because they did not regard the brewery’s basic factual point as well founded, namely that the land sold to Worsbrough had originally formed part of the option land. The judge’s conclusion on this issue was that the brewery had not proved the factual case that it sought to make: that is, it did not prove that the land sold to Worsbrough ever formed part of the option land. He therefore did not also go on to consider whether, if it had proved it, the point would have been fatal to the exercise of the option against the brewery.
[22] By the respondent’s notice, the brewery invites this court to hold that the judge was wrong to find the factual basis for that argument unproved. That involves a consideration of the less than complete conveyancing history of the relevant land through which Mr Cowen took us. The starting point is a conveyance dated 7 March 1936 made between: (i) Mr Wentworth as vendor; (ii) the then trustees of the club; and (iii) the brewery. That was the conveyance under which the brewery acquired the land that either comprised, or at least included, the property that it subsequently leased back to the club.
[23] In [15] of his judgment, the judge described the land so purchased by the brewery as “outlined in red on the plan annexed to the 1936 conveyance”, and he referred to a copy of the plan being at p343 of the trial bundle. That plan has typed on it the legend “copy of plan attached to conveyance of 7 March 1936”, and shows various parcels of land edged respectively green, red and black. The plan is, if I may say so, obviously based upon the plan annexed to the 1936 conveyance, but I regard it as equally apparent that the colouring on it was not the like colouring as on the plan actually so annexed, which was also in the trial bundle, at p336. The plain inference is that the colouring was added later for some different purpose, although there is no evidence as to what that purpose was. The judge noted the latter plan in [22] of his judgment and regarded the manifest differences between it and the plan at p343 as unexplained.
[24] In my judgment, it is apparent that the plan at p336 is a copy of the plan annexed to the 1936 conveyance, and I do not understand there to be any difference between counsel as to this. The parcels clause in that conveyance describes the land by reference to this plan in a way that satisfies me that the land thereby conveyed comprised a substantially larger area of land than the land outlined in red on the p343 plan. The latter land forms, very roughly, the south-eastern half of the land conveyed by the 1936 conveyance, and that smaller area either represents, or at least approximates to, the land now occupied by the club. However, the 1936 conveyance also plainly included an area lying to the north-west of that land. The plan attached to it describes the entire area of the land conveyed in 1936 as comprising 1,940 sq yd.
[25] At least by the end of 1958, and probably before, the club became the tenant of either all or part of the land comprised in the 1936 conveyance. There is in the bundles a plan dating from 14 October 1949, which indicates that the area approximating to the land outlined in red that the judge had identified was apparently occupied by the club. The plan does not, however, indicate whether it also occupied the further land in the brewery’s title lying to the north-west. In that respect, the plan is entirely neutral. The 1958 tenancy agreement is also before us, but it also gives no clue as to the precise limits of the land comprised in it, referring merely to “the Club Premises now occupied by [the club] and situate at Mount Vernon Road, Ward Green together with the premises and appurtenances thereunto belonging”.
[26] What then happened is that, on 18 October 1961, by a conveyance of which a memorandum was endorsed on the 1936 conveyance, the brewery sold to Worsbrough a parcel of land comprising 1,143 sq yd and lying to the north-west of the site now occupied by the club. The brewery’s point is that the judge should have found that the land comprised in the club’s tenancy and the land the subject of the option agreement comprised not only the land that it continued to occupy after the sale to Worsbrough but also the land sold to Worsbrough in 1961. The argument is that the effect of that sale was effectively to halve in size the land comprised in the club’s tenancy agreement and to convey to Worsbrough approximately one-half of the option land.
[27] If that is what did happen in 1961, it follows that the club would have been a necessary party to the sale to Worsbrough. The conveyance to Worsbrough includes no suggestion that they were taking the land subject to the club’s tenancy. On the face of it, they were taking it free of that tenancy. That being so, it follows on the brewery’s case that the club would have had to have surrendered part of its tenancy to the brewery in order to enable the sale to Worsbrough to take place. There is, however, not a single piece of paper in evidence showing, or even suggesting, that the club so surrendered its tenancy of the land to Worsbrough, or that, following the sale, there was any reduction in the rent payable by the club, which the 1958 tenancy agreement fixed at £110 pa.
[28] The judge found, as I have said, that the brewery had not proved that the land sold to Worsbrough was ever comprised in the club’s tenancy and option agreement, and therefore did not go on to consider the consequences on the trustees’ case if it had been. For the reasons given, I consider that the judge was, with respect, mistaken as to which plan was attached to the 1936 conveyance; but I would not regard that mistake as vitiating his conclusion that the brewery had not proved its factual case. The material before this court is the same as that before the judge, and I am wholly unpersuaded by the documents through which we have been taken that the judge should have found that the land sold to Worsbrough ever formed part of the option land. Mr Cowen relied in part, in support of this argument, upon the unchallenged evidence from Mr Norman Scarr, who had been the secretary of the brewery and Rochdale since 1997 and had previously been employed by the brewery since 1976. In para 7 of his witness statement, he said that “having seen documents relevant to the proceedings, as presented to me by the defendants’ solicitors”, it appeared clear to him that (and I paraphrase) the property that was the subject of the exercise of the option differed from the property comprised in the option agreement, and he referred to the sale to Worsbrough. Those documents are the ones to which we have been referred, and although it may have appeared clear to Mr Scarr what the position was, I do not share his view. I regard the position as unclear, and I consider that the judge was fully entitled to conclude that the brewery had not proved its factual case on this point. It follows that I do not consider it necessary to consider, any more than the judge thought it was, the consequences of the position had the brewery made good its case that the option land had included the land sold to Worsbrough. |page:163|
Result
[29] I would therefore, for the reasons given, allow the appeal and set aside the judge’s order in so far as he refused to order specific performance against the brewery. I would make an order for specific performance against the brewery, and I would direct that the order should in terms include a direction that the brewery should be required to procure that Rochdale transfer the property to the trustees for the purposes of completing the contract. If my lords agree with my proposal, no doubt the precise form of the order will need careful consideration.
Pill LJ said:
[30] I agree.
Sedley LJ said:
[31] I also agree.
Appeal allowed.
