Under Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 a contract for the sale of land must be in writing incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each, and signed by or on behalf of each party to the contract.
The court refused a claim for specific performance of a contract in Shill Properties Ltd v Bunch [2023] EWHC 2135 (Ch).
The case concerned the sale of 7 Gunstor Road, London N16 by the defendant, an elderly, frail and vulnerable person with memory and cognitive issues. She instructed Alexander Knight Properties to advertise the property for sale. They introduced a couple who finally offered £860,000 for the property. Fine & Country introduced the claimant company to her.
The claimant’s solicitors purported to exchange contracts for the purchase of the property on its behalf for the sum of £840,000 on 7 December 2018. The defendant subsequently refused to complete, arguing that the contract was void for non-compliance with the 1989 Act and that the claimant fraudulently misrepresented that it was a cash buyer.
The court found that the claimant was the true buyer of the property at £840,000 but that the claimant’s solicitor – whose evidence was unreliable unless supported by contemporaneous documents – did not hold a signed contract when he purported to exchange contracts on 7 December 2018, so the 1989 Act was not complied with and the claim failed.
Fraudulent misrepresentation requires the representee to prove that a false representation was made knowingly, without belief in its truth or recklessly, careless as to whether it was true or false.
The claimant had represented to the defendant that it was a cash buyer, in the sense of buying the property without the aid of a secured loan or finance. However, it actually intended to buy using mortgage finance, as was its usual practice.
The representation was made by the claimant to Fine & Country with the intention that it should be passed to the defendant and was supported by the fact that access to the property to obtain a valuation was not sought until after exchange of contracts.
There was no evidence that the claimant could have completed in cash or that it had arranged mortgage finance and so the representation was fraudulent. The contract, if valid, could be set aside.
A claim in undue influence failed because the defendant was unable to establish that Fine & Country was acting on the claimant’s behalf in their dealings with her.
Louise Clark is a property law consultant and mediator
