OPM Property Services Ltd v Venner and others

Defendant wishing to sell property — Solicitor effecting sale without defendant’s knowledge — Defendant initially expressing pleasure at sale — Defendant subsequently refusing to honour contract — Whether solicitor having defendant’s authority to enter into contract — Whether defendant’s initial reaction ratifying contract — Claim allowed The defendant owned a property that had been advertised for sale for a considerable period of time. At one point, the defendant had signed a draft contract to sell the premises to a third party, but the negotiations had failed. The claimant subsequently made an offer to purchase the property. The defendant’s solicitor (the third Part 20 defendant) did not contact the defendant but proceeded to exchange contracts with the claimant, using the signed contract prepared for the earlier sale and substituting the name of the claimant in place of the earlier purchaser. The estate agent dealing with the sale released the keys to the property to the claimant, who entered the premises and undertook various works. The defendant initially seemed pleased that the contracts had been exchanged, but subsequently denied that the property had been sold with his authority. After the claimants commenced proceedings for specific performance, the defendant instigated Part 20 proceedings against his solicitor, the estate agent and the claimant on the ground that, by their actions, they had denied him the chance of a better private sale or the benefit of the sale at auction. He also claimed damages in respect of the works undertaken by the claimant at the property. The questions for the court were, inter alia: (i) did the solicitor have the defendant’s actual or ostensible authority to exchange contracts with the claimant; (ii) was the contract ratified by the defendant’s subsequent actions; (iii) if so, should the claimant be accorded the remedy of specific performance; and (iv) generally, to what extent were the Part 20 defendants liable in negligence and liable for any damage to the property. Held: The claim was allowed. 1. The defendant had not given his agents the power to decide what was in his best interests without consulting him. They had erred in acting on the sale without his authority. Moreover, it had been completely unacceptable for the defendant’s solicitor to disinter a defunct contract and use it to effect a deal without his client’s knowledge. 2. Although the contract had been exchanged without the defendant’s authority, he had ratified that contract by way of his subsequent behaviour. On the evidence, he had expressed pleasure at the sale of the property. Although at the time of the sale he had not possessed all the material facts, he had become aware of them in the following days and had not sought to repudiate the contract on the basis of any of them. 3. In the case of a contract to transfer land, specific performance was granted almost as of right. In the instant case, the claimant had agreed to purchase the land and that agreement was to be honoured. On that basis, the property had passed to the claimant, and therefore no damage had been caused to the defendant’s property by the Part 20 defendants. Robert Lamb (instructed by Richmonds) appeared for the claimant/first Part 20 defendant; Kenneth Hamer (instructed by Desor & Co, of Hayes) appeared for the defendant/Part 20 claimant; Rupert Higgins (instructed by Robin Simon LLP) appeared for the second Part 20 defendant; Graeme McPherson (instructed by Weightman Vizards) appeared for the third Part 20 defendant. Vivienne Lane, barrister