Excello Law acted on behalf of Peter Conway, the successful Appellant in a dispute with his cousin, Steven Conway and his wife, Amber Meek concerning the proposed sale of a derelict barn (“the Barn”) to be converted into residential accommodation.
Background
Peter Conway owned a farm comprising over 20 acres of land and buildings including the Barn.
In March 2019 he and Steven Conway orally agreed that Steven and Amber would purchase the Barn for £150,000 and that solicitors would be instructed to prepare the necessary documentation to effect the transfer.
Peter Conway allowed Steven and Amber to go into occupation of the Barn and to commence renovation works before the sale had completed and before the purchase price was paid.
The negotiations fell apart some months later due to a disagreement about Peter Conway’s requirement that he should retain an option to buy back (“the option”) the Barn in the event that he was able to sell the whole farm as a development site. By this time, Steven and Amber had undertaken extensive renovation works.
When the negotiations ceased, Peter Conway demanded that Steven and Amber cease work and vacate the Barn. They refused to do so. Peter Conway therefore applied for a declaration that Steven and Amber had no proprietary interest in the Barn and an injunction preventing them from accessing it further.
Steven and Amber counterclaimed seeking an order based on proprietary estoppel that the Barn be transferred to them on the basis of the agreement they claimed had been reached. They did not seek equitable compensation to reimburse them for the cost of the work to the Barn (the amount of which was disputed) nor did they allege that a constructive trust had arisen in their favour.
County Court
There was an eight day trial in the County Court in 2024 in which it was argued on behalf of Peter Conway that Steven and Amber were not entitled to specific performance of the oral contract because it did not comply with the terms of section 2 of the Law of Property Miscellaneous Provisions Act 1989 (“s2”) which requires that all contracts for the sale of land should be made in writing.
There have been a number of cases in which the interaction between s2 and proprietary estoppel have been considered. S2 is not an absolute bar to the operation of proprietary estoppel but it was argued on behalf of Peter Conway that it cannot be relied on to enforce or otherwise give effect to the terms of a contract for the sale of land which s2 has rendered unenforceable.
The first instance judge decided in favour of Steven and Amber on their factual case as to what the parties had agreed (ie there was no agreement that Peter Conway could have the option) and ordered specific performance of the oral contract even though many crucial terms such as rights of drainage and rights of access over Peter Conway’s retained land had not been agreed.
High Court
Peter Conway appealed to the High Court on the grounds that Steven and Amber were not entitled to rely on proprietary estoppel to give effect to the oral contract which would otherwise be unenforceable by virtue of s2.
The appeal judge concluded that it was not open to the trial judge to make an order which effectively granted specific performance of an unenforceable oral contract for the sale of land.
The judge was however concerned at the potential injustice of this outcome to Steven and Amber and remitted the case to the county court on his own initiative to determine whether any form of equitable compensation should be granted to them. The remitted trial would also address Peter Conway’s claim for damages for trespass.
The costs order in the first instance trial in favour of Steven and Amber was overturned. Peter Conway was awarded his costs of the appeal and 75% of the trial costs. This reflected the lack of any alternative pleaded claim for relief by Steven and Amber and their unreasonable refusal to engage in Alternative Dispute Resolution.
This case is in line with other recent authorities that s2 only bars relief which would have the effect of ordering specific performance of an otherwise void contract for the sale of land. It does not prevent the court ordering some other form of relief to satisfy the equity such as equitable compensation to put the promise (Steven and Amber) back in the position that they were in.
Conway v Conway [CH-2024-BHM-000020]
