Babic v Thompson and another
Plaintiff seeking continuation of interlocutory injunction – Whether binding agreement between parties – Whether common intention that defendants holding land on trust for plaintiff – Injunction granted
The plaintiff architect formed a partnership with the second defendant, a property developer, to purchase a site at Greenwich, and obtain planning permission for the redevelopment of the site by the erection of flats and two dwellings. The freehold owner granted them an option to purchase the site; the option was exercised and contracts were exchanged. By agreement, the site was transferred into the name of the first defendant. The relationship between the plaintiff and second defendant broke down. Following a meeting regarding the matters of dispute between them, the plaintiff set out various agreed matters in a letter to the defendants’ solicitor on May 7 1998. The defendants’ solicitor responded by letter of May 8, to which the plaintiff’s solicitor made minor amendments, which were agreed on May 11. The plaintiff submitted that there was thus an agreement of compromise between the parties. The plaintiff in the present application sought the continuation of an interlocutory injunction, which had been granted in October 1998, restraining the defendants from disposing of land or any interest in the land at the site. The plaintiff submitted that even if the formalities of section 2 of the Law of Property (Miscellaneous Provision) Act 1989 had not been complied with in relation to the compromise, the land was held on trust for the plaintiff by reason of two matters: (i) the plaintiff had contributed to the purchase price; and (ii) as part of the compromise, it was the common intention of the parties that the plaintiff would have a defined house on the site upon assignment of the copyright in his plans. In reliance upon this, the plaintiff had assigned the copyright. It was submitted that the plaintiff had a good arguable case within the American Cyanamid principle, there being a serious question to be tried that the relevant land was held on trust. It was submitted by the plaintiff that the court should intervene to prevent a trustee disposing of the land in such a way as to thwart the trust and, in any event, to prevent a breach of agreement that a house would be transferred to the plaintiff. The defendants submitted that no binding agreement had been reached and the terms, even if apparently concluded, were incomplete and expressly subject to contract or formal agreement.
Held The injunction was granted.
Plaintiff seeking continuation of interlocutory injunction – Whether binding agreement between parties – Whether common intention that defendants holding land on trust for plaintiff – Injunction granted The plaintiff architect formed a partnership with the second defendant, a property developer, to purchase a site at Greenwich, and obtain planning permission for the redevelopment of the site by the erection of flats and two dwellings. The freehold owner granted them an option to purchase the site; the option was exercised and contracts were exchanged. By agreement, the site was transferred into the name of the first defendant. The relationship between the plaintiff and second defendant broke down. Following a meeting regarding the matters of dispute between them, the plaintiff set out various agreed matters in a letter to the defendants’ solicitor on May 7 1998. The defendants’ solicitor responded by letter of May 8, to which the plaintiff’s solicitor made minor amendments, which were agreed on May 11. The plaintiff submitted that there was thus an agreement of compromise between the parties. The plaintiff in the present application sought the continuation of an interlocutory injunction, which had been granted in October 1998, restraining the defendants from disposing of land or any interest in the land at the site. The plaintiff submitted that even if the formalities of section 2 of the Law of Property (Miscellaneous Provision) Act 1989 had not been complied with in relation to the compromise, the land was held on trust for the plaintiff by reason of two matters: (i) the plaintiff had contributed to the purchase price; and (ii) as part of the compromise, it was the common intention of the parties that the plaintiff would have a defined house on the site upon assignment of the copyright in his plans. In reliance upon this, the plaintiff had assigned the copyright. It was submitted that the plaintiff had a good arguable case within the American Cyanamid principle, there being a serious question to be tried that the relevant land was held on trust. It was submitted by the plaintiff that the court should intervene to prevent a trustee disposing of the land in such a way as to thwart the trust and, in any event, to prevent a breach of agreement that a house would be transferred to the plaintiff. The defendants submitted that no binding agreement had been reached and the terms, even if apparently concluded, were incomplete and expressly subject to contract or formal agreement.
Held The injunction was granted.
When minor amendments to the defendants’ letter of May 8 were made and the plaintiff then agreed the letter, there was, at least arguably, a concluded agreement between the parties. That was arguably sufficient to enable the court to infer that there was a common intention between the parties that the plaintiff should have a beneficial interest in a defined house, which would be handed over to him, the plaintiff, having acted to his detriment in reliance upon that common intention. It was arguable that the first defendant held the site on trust for the plaintiff. Damages would not have been a sufficient remedy.
Jonathan Karas (instructed by Wansbroughs Willey Hargrave) appeared for the plaintiff; Mark Blackett-Ord (instructed by Hudgell Yeates & Co) appeared for the defendants.
Sarah Addenbrooke, barrister
