Landlord and tenant — Rent review provisions — ‘Subject to contract’ formula — Whether letters constituted a binding agreement between landlord and tenant as to the amount of the reviewed rent — Review provisions in lease provided that one of the methods of determining the rental value was by agreement between the parties — A letter from the landlords’ agent on his professional notepaper before the review date proposed to the tenants a rent of £26,944 per annum for the property (factory premises and ancillary accommodation) in place of the existing rent of £16,682 per annum — This letter was headed by the words ‘Subject to Contract’ and also contained the formula ‘Without Prejudice’ — The tenants replied to the effect that the proposal was acceptable — Neither the tenants’ reply nor any of the further correspondence mentioned below contained either formula — Subsequently the landlords sent to the tenants for signature a formal memorandum to record their agreement to the reviewed rent of £26,944 — Some weeks later the tenants wrote to say that there had been a misunderstanding and that they could not agree to the rent proposed
review of cases on the ‘subject to contract’ formula, the judge considered and
rejected a number of suggested reasons put forward on behalf of the landlords
as to why the words in the present case did not have their prima facie meaning
and effect — Among these were suggestions that the words were used by mistake,
that estate agents and surveyors were inclined to use the words
indiscriminately, and that there
of letters being all that was required — It was clear from the authorities that
when correspondence began with a definite ‘subject to contract’ provision
subsequent correspondence was governed by that overriding condition — There
were also indications that the words were intended to have their prima facie
effect — Declaration that the letters did not constitute a binding agreement
The following
cases are referred to in this report.
Alpenstow
Ltd v Regalian Properties [1985] 1 WLR 721;
[1985] 2 All ER 545; [1985] 1 EGLR 164; (1985) 274 EG 1141
Chillingworth v Esche [1924] 1 Ch 97
Duttons
Brewery Ltd v Leeds City Council (1982) 43
P&CR 160; [1982] EGD 367; 261 EG 885, [1982] 1 EGLR 27, 989, CA
Eccles v Bryant [1948] 1 Ch 93; (1947) 177 LT 247; [1947] 2 All ER
865, CA
Michael
Richards Properties v St Saviour’s Parish,
Southwark [1975] 3 All ER 416
Munton v Greater London Council [1976] 1 WLR 649; [1976] 2 All ER
815; sub nom Munton v Newham London Borough Council (1976) 32
P&CR 269; 74 LGR 416; [1976] EGD 469; 239 EG 43, [1976] 2 EGLR 5, CA
Sherbrooke
v Dipple (1980) 41 P&CR 173; [1980] EGD
888; 255 EG 1203, [1980] 2 EGLR 140, CA
Tiverton
Estates v Wearwell Ltd [1975] Ch 146; [1974]
2 WLR 176; [1974] 1 All ER 209; [1973] EGD 1018; (1973) 228 EG 2123, CA
Von
Hatzfeldt-Wildenburg v Alexander [1912] 1 Ch
284; (1912) 81 LJ Ch 184; 105 LT 434
Winn v Bull (1877) 7 ChD 29; 47 LJ Ch 139
In this action
the plaintiff tenants, The Henderson Group plc, sought a determination as to
whether the exchange of letters between them and the defendant landlords,
Superabbey Ltd, constituted a binding contract as to the amount of a reviewed
rent in a lease of premises at Wessex House, Cardigan Street, Birmingham.
M J Driscoll
(instructed by Wallace & Partners, agents for Needham & James, of
Birmingham) appeared on behalf of the plaintiffs; A C Geddes (instructed by
Levinson Gray) represented the defendants.
Giving
judgment, JUDGE LEONARD BROMLEY QC said: In this action the question is raised
whether the exchange of two letters, dated respectively March 4 and 16 1987 to
which I shall come, constituted a binding enforceable contract as to the amount
of a reviewed rent between the plaintiff as tenant and the defendant as
landlord (not the original landlord) under a lease.
The lease is
dated June 1 1984. It is of factory premises, ancillary offices, four
car-parking and two off-loading spaces at Wessex House, Cardigan Street,
Birmingham. The term is of 15 years, from September 29 1981 to September 29
1996. The initial rent was £16,682 per annum exclusive, payable in advance on
the usual quarter days. The lease provided for rent reviews at, specifically,
September 29 1986 and at each succeeding fifth anniversary of September 29, and
thus at September 29 1991 also.
This is not,
it will be seen, a short-term lease of, say, a small shed, but a lease of
factory and ancillary premises for a considerable term at a significant rent.
The rent
review provisions are contained in the fourth schedule to the lease:
The Rent
payable hereunder shall be as follows:
(A) For the first five years of the said term the
yearly rent of £16,682.00.
(B) For the next five years of the said term
either the yearly rent reserved in sub-clause (A) hereof or the open market
rental value of the Demised Premises at the Review Date whichever is the higher
and in either case the same shall remain constant during the whole period
referred to in this sub-clause.
(C) For the next five years of the said term
either the yearly rent reserved in sub-clause (A) hereof or that in sub-clause
(B) hereof or the open market rental value of the Demised Premises at the
Review Date whichever is the higher and in any case the same shall remain
constant during the whole period referred to in this sub-clause.
And the said
rents shall in all cases be paid by equal quarterly payments in advance on the
usual Quarter days in every year without any deduction whatsoever except as
required notwithstanding any agreement between the parties by any statutory
enactment relating to income tax for the time being in force the first payment
apportioned in respect of the period from the day of [sic] to the Quarter day
next thereafter to be paid on the execution hereof Provided That for the
purposes of sub-clauses (B) and (C) hereof it is hereby agreed that the
following definitions and provisions shall apply, namely:
(1) The expression ‘open market rental value’
means the annual rental value of the Demised Premises in the open market at
which they might reasonably be let by a willing landlord to a willing tenant on
a lease for a term of years certain equivalent in length to the residue
unexpired at the Review Date of the term of years hereby granted (subject as
hereinafter provided) with vacant possession at the commencement of the term
but upon the supposition (if not a fact) that the Tenant has complied with all
the obligations as to repair and decoration herein imposed on the Tenant (but
without prejudice to any rights or remedies of the Landlord in regard thereto)
and there being disregarded (if applicable).
(a) any effect on rent of the fact that the
Tenant has or its predecessors in title have been in occupation of the holding;
(b) any goodwill attached to the holding by
reason of the carrying on thereat of the business of the Tenant (whether by it
or by a predecessor of his in that business);
(c) any effect on rent of an improvement carried
out by the Tenant or any person lawfully deriving title under it otherwise than
in pursuance of an obligation to the Landlord.
(A disregard
provision follows which is not material to be set out.)
(2) The expression ‘Review Date’ means the
expiration of the Fifth year of the said term or the expiration of the Tenth
year of the said term as the context requires for the purpose of ascertainment
of the open market rental value under sub-clause (B) or sub-clause (C) or
sub-clause [sic] hereof respectively.
(3) The open market rental value shall be
determined in manner following that is to say it shall be such sum as shall be
either:
(a) agreed between the parties before a period
of three months commencing immediately prior to the Review Date or
(b) determined at the election of either party
hereto (to be made by notice in writing served by either party upon the other
not earlier than the commencement of the said three months period) by an
independent surveyor appointed for that purpose by the parties jointly in
writing or upon their failure to agree upon such appointment within one month
immediately after the date of service of the said counter-notice then by an
independent surveyor appointed for that purpose on the application of either
party alone by the President for the time being of the Royal Institution of
Chartered Surveyors and in either case in accordance with the provisions of the
Arbitration Act 1950.
(4) In the event of the determination of such
independent surveyor not having been published prior to the Review Date
or (in the
event of agreement between the parties without recourse to such independent
surveyor) in case the parties shall not have reached agreement prior to the
Review Date for any reason whatever then in respect of the period of time
hereinafter called ‘the said interval’ beginning with the Review Date and
ending on the Quarter day immediately following the date on which such
determination shall have been published or such agreement shall have been
reached the Tenant shall pay to the Landlord in manner hereinbefore provided
rent at the yearly rent payable immediately before the Review Date PROVIDED
THAT at the expiration of the said interval there shall be due as a debt
payable by the Tenant to the Landlord on demand a sum equal to the amount
whereby the yearly rent determined by such independent surveyor or agreed as
aforesaid shall exceed the yearly rent at the yearly rate aforesaid but duly apportioned
on a daily basis in respect of the said interval.
(5) All stipulations as to time in the foregoing
subparagraphs (a) and (b) of sub-clause (3) hereof shall be of the essence of
the contract and shall not be capable of enlargement save as agreed in writing
by the parties.
I have read
clause (5) as it is in the counterpart; the wording in the part signed by the
then landlord is slightly, but not I think materially, different; but it has
been accepted by counsel for both parties that I may proceed on the basis of
the wording in the counterpart. To make that clear, it runs ‘subparagraphs (a)
and (b) . . .’, with the insertion of the ‘and’ between ‘(a)’ and ‘(b)’ in the
typescript, and the deletion of ‘and (c)’ from the typescript.
There is no
provision in the lease for the parties to sign a memorandum recording their
agreement on any reviewed rent, and the particulars at the front of the lease
giving the principal information has simply a heading:
|
9. REVISED RENTS |
|
|
|
FROM |
19 |
£ |
|
FROM |
19 |
£ |
The first of the letters to which I have referred is that dated
March 4 1987. It is from the landlord’s agent, Mr Emms, on his professional
notepaper with a logo saying: ‘Commercial John Emms’, giving prominently at the
top his name with his qualification, a diploma in estate management, ARICS,
chartered surveyor. Under the logo on the top right-hand side is ‘SUBJECT TO
CONTRACT’ and immediately underneath ‘WITHOUT PREJUDICE’. At the foot it has
the words in bold type: ‘Chartered Surveyors, Valuers, Estate Agents’. The
letter is addressed to the subsidiary company of the tenant, being the company
which actually occupied the demised premises, and it is marked ‘For the
attention of Mr Clarke [sic] — Managing Director’. The letter runs as
follows:
Dear Sir
re: Wessex
House, Cardigan Street, Birmingham — Rent Review
Further to my
recent visit and inspection of your premises, I have now had the opportunity of
considering the matter of your rent review which fell due on September 29 1986.
Taking into
account comparable evidence of rentals in your locality and having due regard
to the rent review negotiated in respect of the adjoining premises in Cardigan
Street, it is proposed that the rent for your occupation of the above premises
(which also includes four car parking spaces and two off loading spaces) shall
be £26,944 per annum (exclusive of rates).
I should be
obliged to receive notification from you that I may authorise preparation of
the appropriate Memorandum concerning this rent review in accordance with this
proposal. I look forward to hearing from you at your earliest convenience.
Yours
faithfully,
J R EMMS
Dip(Est Man) ARICS
Chartered
Surveyor
By reply,
dated March 16 1987, a little under a fortnight later, Mr Clark replied as
follows:
Dear Sirs
WESSEX HOUSE,
CARDIGAN STREET, BIRMINGHAM — RENT REVIEW
Thank you for
your letter dated March 4 1987 informing us of our rent review which fell due
on September 29 1986 and which will now be £26,944.
I confirm that
this is acceptable and I await to hear further from you in due course.
Yours
faithfully,
R A Clark
MANAGING
DIRECTOR
For the
purpose of these proceedings the plaintiff has accepted that, if there was a
contract, then Mr Emms had authority to enter into it and Mr Clark had
authority to enter into it on behalf of the tenant. Thus, no question of
possible lack of authority arises before me, but it is still the fact that the
two material letters are between agents.
The letter of
March 16 bore no ‘Subject to Contract’ or ‘Without Prejudice’ heading, and
appears not in fact to have reached Mr Emms before he wrote his second letter
of March 20 1987, which ran as follows. It is headed ‘PRIVATE AND
CONFIDENTIAL’, and is headed ‘For the attention of Mr Clarke’ [sic] with
the identification ‘Wessex House, Cardigan Street, Birmingham. Rent Review’,
and says this:
Further to my
letter of March 4 1987, I should be grateful to receive your reply in respect
of the proposals outlined in my earlier correspondence.
I look forward
to hearing from you at your earliest opportunity.
Yours
faithfully,
It is on the
same form of professional notepaper as the first letter.
Then on March
31 1987 the landlords, that is, the defendants to the action, wrote as follows:
Dear Sir,
Re: WESSEX
HOUSE CARDIGAN STREET, BIRMINGHAM RENT REVIEW
I have
received, via our agents, Messrs John Emms, a copy of your letter of March 16
1987, agreeing to the rent review at September 29 1986.
Accordingly, I
enclose a Memorandum, which I should be obliged if you would kindly sign and
date and return to me so that I may place this with the Lease in our
possession. On receipt of your signed Memorandum, I will arrange for our
Memorandum, duly signed by a Director to be forwarded to yourself for placement
with your lease.
When returning
the Memorandum to me, would you kindly forward the Certificate in respect of
the Change of Name from Frontier Gate Systems Limited to Henderson Security
Gates Limited.
Yours
faithfully,
pp SUPERABBEY
LIMITED
PAUL S
FREEDMAN
PROPERTY
ADMINISTRATION MANAGER
Enc.
The memorandum
enclosed was in the following terms:
|
MEMORANDUM |
||
|
LANDLORD: |
Superabbey Limited |
|
|
TENANT: |
Henderson Security Gates |
|
|
DATE: |
31st March 1987 |
|
|
RE: |
Wessex House Cardigan Street |
|
It is hereby agreed that the rent from the rent review date of
September 29 1986 to September 28 1991 is at the rate of £26,944.00 (Twenty-Six
Thousand Nine Hundred and Forty-Four Pounds) per annum.
Signed…………………………………………………………………………………
Henderson Security Gates Limited (formerly Frontier Systems Limited,
subsidiary of the Henderson Group Plc)
Date…………………………………………………………………………………..
1987
On a date
which is not before me Frontier Gates Systems Ltd had changed its name to
Henderson Security Gates Ltd. Mr Emms had written twice to Frontier Gates, but
clearly the landlord was aware of the new name. It occurs to me that the
landlord may have learnt this from the top copy of Mr Clark’s reply of March 16
1987, but as only the retained copy is in evidence I make no finding on the
point.
The description
of the tenant on the memorandum is wrong, but the draftsman of the memorandum
not only recorded the change of name twice but recorded twice that the company
was a subsidiary of the actual tenant, the Henderson Group.
The date of
March 31 1987 is the date the landlords wrote their letter of that date
enclosing the memorandum. It is not the date of the contract now asserted,
which would be presumably when Mr Clark’s letter of March 16 1987 was posted.
The memorandum was not in fact signed by or on behalf of the tenant, and on May
6 1987 Mr Clark wrote, not to the landlord but to Mr Emms, as follows:
Dear Mr Emms
RE: WESSEX
HOUSE, CARDIGAN STREET, BIRMINGHAM
I have tried
to contact you several times on the telephone in recent days but have
consistently failed — hence this letter.
I regret that
there has been a misunderstanding regarding the level of rent increase proposed
for our portion of Wessex House and that the rent proposed of £26,944 per annum
is not acceptable.
When first
assessing the proposed review I was misinformed about the current rent and I
sincerely regret any inconvenience caused thereby.
This view is
confirmed by the fact that despite having the lease on the open market since
before Christmas there has been no interest expressed whatsoever.
Hopefully, a
lower figure can be agreed between us, otherwise presumably we will need to go
to arbitration. I hope, however, that this can be avoided and reiterate my
apology for the inconvenience.
Yours
sincerely,
R A Clark
MANAGING
DIRECTOR
Thus the tenant
by its agent resiled from its expressed acceptance of the review rent and the
scene was set for this litigation. I add that a differently typed copy of the
memorandum was, on August 7 1987, sent by the landlords’ solicitors to the
tenants’ solicitors, but that has not been signed.
None of the
letters, other than the first, had on it the words ‘subject to contract’ (or, I
add, ‘without prejudice’).
I return
briefly to the rent review provisions in the lease itself. Clause (3) of the
fourth schedule does not recognise the possibility of agreement on the review
rent after, in effect, June 29 1986, but clause (4) implicitly in my judgment
does. The effect of clause 3(b) is to confer an option on either party after
the date three months before the review date to require arbitration (although
the mechanism is defective, since it refers to a counternotice for which no
express provision was made).
There are a
number of material propositions of law which the authorities which have been
cited to me establish:
1 Where negotiations have begun by an
effective use of ‘subject to contract’, then all subsequent negotiations are
subject ‘to that initial overriding condition’ — see per Lord Denning MR
in Sherbrooke v Dipple (1980) 255 EG 1203, [1980] 2 EGLR 140.
2 It is Mr Emms’ letter of March 4 1987
which in its context has to be construed; it is not a question of what he
thought ‘subject to contract’ meant — see per Fox LJ in Duttons
Brewery Ltd v Leeds City Council (1981) 43 P&CR 160 at p 184.
3 The words ‘subject to contract’ have the
meaning, subject to point 5 to which I shall come, that the parties do not
intend to be bound until another document embodying all the terms of the
agreement between them is signed by the parties and becomes binding upon them —
see per Cohen LJ in Eccles v Bryant [1948] Ch 93 at p 105.
See also Winn v Bull (1877) 7 Ch D 29. As Lord Denning put it in Tiverton
Estates v Wearwell Ltd [1975] Ch 146 at p 159:
. . . for
over a hundred years, the courts have held that the effect of the words ‘subject
to contract’ is that the matter remains in negotiation until a formal contract
is executed.
4 Subject to contract negotiations do not
become a contract when the parties become of one mind, and the suspensive
condition can only be got rid of short of formal agreement if there is found an
express or implied agreement to expunge it — see per Templeman LJ in Sherbrooke
v Dipple at p 1205. I add at this point that in his dissenting judgment
in the Duttons Brewery case (p 170) Stephenson LJ recognised that an
agreed price for a compulsory
5 A very strong and exceptional case is
needed to displace the prima facie conditional meaning of the words ‘subject to
contract’ — per Sargant LJ in Chillingworth v Esche [1924]
1 Ch 97 at p 114, cited by Goff LJ in Munton v Greater London Council
[1976] 1 WLR 649 at p 656.
6 It is a question of construction whether
the execution of the further contract is a condition or term of the bargain or
whether it is a mere expression of the desire of the parties as to the manner
in which the transaction already agreed will go through — per Parker J
(as he then was) in Von Hatzfeldt-Wildenburg v Alexander [1912] 1
Ch 284. Clearly, however, Mr Emms’ letter of March 4 1987 has to be construed
as a whole in its context, and in this case, as there was not in Von
Hatzfeldt, there are the words ‘subject to contract’, which must either be
given effect to or be treated as meaningless.
In one of his
submissions, Mr Geddes, for the landlord, submitted that Mr Emms used the words
‘subject to contract’ by mistake. One short answer to that is that there is no
evidence on the point and rectification is not raised in the case.
Mr Geddes also
made a general point as to the propensity of estate agents and surveyors to
scatter around ‘subject to contract’ on their letters whether or not it was
appropriate in the particular circumstances, and the full rigour of the
proposition that a very strong context was needed to displace the prima facie
conditional sense only applied in conveyancing cases, cases involving the
buying and selling of interests in land. As a matter of fact, in the present
case a professional surveyor and valuer like Mr Emms, I have no doubt, knows
what ‘subject to contract’ means. Also, while no doubt the words mostly are
used in such transactions, I see no views expressed in the cases that have been
cited to me which so limits the effect of the words, nor do I discern any
principle to that effect.
I return to Mr
Emms’ letter. The first point I make is that the words ‘subject to contract’
are typed boldly and prominently and in immediate conjunction with and
preceding ‘without prejudice’. Mr Geddes rightly accepted that the words ‘without
prejudice’ had a practical effect, namely, that if the negotiations did not
reach agreement and one of the parties exercised the election of requiring
arbitration, then the landlord’s opening rent of £26,944 could not be laid
before the arbitrator: the landlord could put his case higher if he wished, so
that if the arbitrator was minded to split any difference between the
landlord’s and the tenant’s figures, the landlord might achieve the rent he
really wanted. Thus the words with which ‘subject to contract’ were adjacent
had a legitimate commercial purpose. I comment that it would be somewhat
surprising that part of that group of words had admittedly an effect, but the
other part was meaningless.
At the point
of time when Mr Emms wrote his letter there are a number of possible
consequences, namely:
1 There might be immediate acceptance of his
figure, as happened.
2 There might be negotiations of longer or
shorter duration resulting in agreement.
3 There might be negotiations of longer or
shorter duration not resulting in agreement, but going to arbitration to
achieve a result at the end, and subject to the possibility of agreement
short-circuiting the arbitration process.
There is a
further point that, since the use of the words ‘without prejudice’ anticipates
the possibility of arbitration, it is also clear that there was anticipated the
possibility of a prior period (of whatever duration) of unsuccessful
negotiation. In my judgment, the possibility of negotiation over a longer or
shorter period was a real one and must have been appreciated by Mr Emms at the
time when he sent his letter.
On that
footing it would be surprising that Mr Emms should reserve the right to put the
rent up if the matter proceeded to arbitration but did not do so for any
precedent negotiation period. What, I ask rhetorically, is the commercial sense
of such a split? I see none.
It is clear
that Mr Emms regarded what he was putting as a ‘proposal’. The second paragraph
of the letter says of the rent ‘It is proposed’, and the last paragraph refers
to a memorandum being prepared ‘in accordance with this proposal’. The reminder
letter of Mr Emms of March 20 1987 also refers to receiving ‘your reply in
respect of the proposals’, and there is an ‘s’ on ‘proposals’. What Mr Emms
asked for was not in terms agreement to the rent he specified, but agreement to
Mr Emms’ authorising someone to proceed with the preparation of a memorandum.
He also in his letter of March 20 1987 referred not to an acceptance of the
rent he had specified but to a reply in respect of the proposals outlined in
his earlier letter. The word ‘outlined’ is a curious word for Mr Emms to have
used if what he was seeking was a simple contractual acceptance of a review
rent he had specified. Also, the word in the letter of March 20 1987 is
‘proposals’ in the plural, and in my judgment in that letter the word clearly
included both the amount of the review rent and also the procedure.
The reply of
Mr Clark of March 16 1987 is, in my judgment, in a consistent sense, since it
confirms that the rent is ‘acceptable’ (not, be it noted, ‘accepted’) and the
reference to waiting to hear further is, in my judgment, referring to being
sent the memorandum when prepared. I am satisfied also that on the true
construction of the word ‘memorandum’ what was envisaged was a document signed
by, or on behalf of, both parties.
Mr Geddes’
strongest points are that there was no need for a memorandum, and simple
agreement by an exchange of letters on the amount of the review rent was all
that was requisite. Nor was there any need in law to reserve the right to
withdraw, since any offer can be withdrawn before acceptance. However, an
agreement on the amount of the reviewed rent would be of contractual effect,
and the rent agreed would become for the period to which it related ‘the Rent’
referred to in the fourth schedule, and fall within the following words in the
reddendum:
(if higher)
such other rent or rents as shall become payable under the rent review
provisions as set out in the Fourth Schedule hereto, all such rents to be paid
by quarterly payments in advance . . . etc.
Mr Geddes
rightly accepted that a formal review rent agreement would or might have a
practical advantage, for example, to a landlord wishing to mortgage the
freehold reversion (to satisfy a bank manager) or on a sale of either reversion
or lease to satisfy a purchaser. It would put the amount of the review rent
beyond doubt. Again, it appears to me that a landlord is entitled, if he
wishes, to make clear beyond peradventure his right to withdraw before the
formal contract is made. To put the point another way, there is no evidence
that there was no reasonable possible commercial advantage in the procedure and
condition, and I doubt whether there could be in fact. Certainly I cannot so
find.
I do not
accept the argument of Mr Driscoll for the tenant that Mr Emms’ letter,
properly construed, did not fix when the review rent was to start. The
reference to the review date of September 29 1986 makes it clear that the
review rent, when settled (to use a neutral term), was to be payable as from
September 29 1986 under the lump sum provision in clause (4) of the fourth
schedule.
Nor do I
accept Mr Driscoll’s argument that the provisions of clause (5) of the fourth
schedule could inhibit the parties agreeing the review rent at any stage or
make ineffective any agreement reached, and I do not find that provision of
assistance in my analysis of the correspondence. Mr Driscoll had, however, more
persuasive arguments.
In my
judgment, so far from the text of Mr Emms’ letter being inconsistent with the
suspensive condition of ‘subject to contract’, it is consistent with it and
supportive of its having its prima facie meaning, for the displacement of which
no adequate case — let alone a strong case — is made out. The words ‘subject to
contract’ were used by a professional in the property field, who must be taken
to have known their meaning and function, and, as I have said, it has not been
established that they could have no commercial significance. In my judgment the
absence of legal necessity for a formal contract or for stating a right
to withdraw is not of itself sufficient to negative the prima facie meaning of
the words in the absence of proof that they could have no practical commercial
function.
As to those
cases cited where the words have not been given a conditional effect, Michael
Richards Properties v St Saviour’s Parish [1975] 3 All ER 416 was so
exceptional a case that in a later decision the judge who decided it, Goff J,
went to the pains of re-emphasising its exceptional nature — see Munton
v Greater London Council, to which I have already referred, at p 656.
The other case was Alpenstow Ltd v Regalian Properties plc [1985]
1 WLR 721, where a prior binding contract was replaced by complex professionally
drawn letters. Each case turns on its own facts, and these cases, if anything,
show how reluctant judges are not to give the words ‘subject to contract’ their
well-established prima facie meaning. The context before me falls well short of
persuading me not to do so.
