[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Bello v Dunelton Properties Ltd [2002] EWCA Civ 601 (18 April 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/601.html Cite as: [2002] EWCA Civ 601

[New search] [Printable RTF version] [Help]

IN THE SUPREME COURT OF JUDICATURE
CIVIL DIVISION
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
(Mr Justice Park)

		The Royal Courts of Justice The Strand London Thursday 18 April 2002

Thursday 18 April 2002

1. LADY JUSTICE ARDEN: This is an application for permission to appeal against the order of Park J dated 14 December 2001, dismissing the appellant's appeal from the order dated 16 July 2001 of His Honour Judge Hornby sitting in the Bow County Court. As it is a second appeal, the appellant must establish not only that there is a real prospect of success on appeal but also that there is an important point of principle or practice requiring the Court of Appeal to hear this appeal, or that there is some other compelling reason for the Court of Appeal to hear it.
2. Briefly, the facts are these. On 6 June 2000 the appellant attended an auction of certain properties which was held by Andrews & Robertson, auctioneers. I have not seen the auction catalogue but in the papers before me there is a copy of the auctioneers' General Conditions of Sale which provide that the entire contract for each lot comprises, among other things, the special conditions of sale for that lot and the Standard Conditions of Sale (3rd Edition). Both those documents are before me. There is no suggestion that the appellant would not have known before the auction began that the lot was being sold subject to the auctioneers' conditions.
3. At the auction, held on 6 June 2000, the appellant was successful in his bid for a single lot comprising the leasehold interest in numbers 130A, 130B and 130C Bow Street, London E17. In other words, this lot was knocked down to Mr Bello by the auctioneer when his hammer fell. The price was £1,300 and the appellant paid this sum to the auctioneers later the same day. At the same time he signed a memorandum on behalf of his two children, who were to be the buyers. This stated that the buyers acknowledged that they had agreed to the sale and purchase of the property at the price, which was £1,300, "in accordance with the terms of the Entire Contract described in the General Conditions and agree to complete the sale and purchase in accordance with such terms".
4. It is therefore necessary to consider the Standard Conditions of Sale which were referred to in the General Conditions and which formed part of the Entire Contract. These standard conditions provide, in paragraph 4.1.2, that the buyer is to send to the seller a draft form of transfer. However, this never occurred, despite reminders from the sellers' solicitors on 9 June, 23 June and 4 July. The seller therefore took the view that the appellant had failed to complete the purchase in accordance with the terms of the contract. On 5 July 2000 it served notice to complete. The appellant failed to comply with this and accordingly condition 7.5.2 of the standard conditions of sale became applicable. Under this condition the seller could rescind the contract and resell the property. On 19 September 2000 the seller rescinded the contract and resubmitted the property for an auction to be held by Andrews & Robertson on 19 July 2001. The appellant applied to His Honour Judge Hornby for an injunction to prevent the property from being sold on this occasion. As I have said, the judge refused to grant an injunction and the judge, Park J, dismissed an appeal from his order.
5. The appellant puts forward a number of arguments in support of his appeal. I would summarise them as follows. His first argument is that the contract for the sale of the property by auction does not require to be in writing. This is provided for by the Law of Property (Miscellaneous Provisions) Act 1989 section 2(5)(b). I will read subsection (1) of section 2 and section (5) (b):

"(1) A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each."

... ... ...

(5) This section does not apply in relation to -

(b) a contract made in the course of a public auction".

6. So subsection (1) does not apply to the contract made in the course of a public auction but the provisions of (5)(b) do not provide that a contract which is made in the course of a public auction cannot incorporate other terms. That is to read subsection (5)(b) beyond its proper scope, which is only to disapply (for this purpose) the rule in (1) that a contract for the sale of land must be made in writing and that all the terms of the contract must be incorporated into the contract.
7. The appellant further submits that when the hammer fell at the auction the contract between the purchaser and the seller was complete. In this regard he relies on Payne v Cave (1789) 3 Term Rep 148 and Phillips v Butler (1945) Ch 358, (1945) 2 All ER 258. The appellant submits that all that remains is for the purchaser to pay the purchase price. Requisitions for the transfer of the property are contained in the memorandum which he signed.
8. I accept, as did the judge, that when the hammer fell, a binding contract came into being between the buyer and the seller; that is, between the appellant and the proposed respondent. However, there is a separate question as to the terms of that contract. As I have explained, section 2(5) of the Law of Property (Miscellaneous Provisions) Act 1989 does not prevent the contract made in the course of the action from incorporating other terms. This point can be illustrated by Phillips v Butler, to which I have referred, even though that case was decided before the 1989 Act. In that case there was an auction of land and the judge observed at page 259 of the All England Report that this property was put up for sale by way of auction and that the properties were offered for sale "according to certain printed particulars and special conditions of sale", which he had to examine. The judge took it as axiomatic that those conditions formed part of the contract which came into being with the successful bidder, even though it was a case of a sale by public auction. (Because the case was decided before the 1989 Act, the auctioneer signed a written memorandum on the successful bidder's behalf and it was held that the auctioneer had authority to do so.) So too in this case other terms are incorporated into the contract made between the buyer and the seller, and those terms are the terms which are incorporated, by reference, into the memorandum which the appellant signed later that day. As I have explained, this memorandum referred to the auctioneer's general conditions of sale and to the special conditions relating to this particular lot. Moreover, the action which the seller took, for the reasons given above, was action which the seller was justified in taking by the terms of those general conditions. Accordingly, it seems to me that there is no prospect of success in arguing that the judge was wrong to refuse the injunction.
9. There are two other points I would like to mention. First, Mr Bello submits that it is unfair to impose terms after the event on a sale by auction. In this regard he has made reference to the Unfair Contracts Terms Act 1977. But the fact is that these terms would have been in the auction catalogue and the auction would have been conducted on the basis that those who participated, in particular those who were successful, would have been bound by the terms in the auction catalogue. Secondly, Mr Bello has explained that he has been attending auctions of various kinds in the last 25 years and has never previously had a problem of this nature. Of course this is not a point which can be decisive in this case but it is important, I think, to observe that in this particular case the sellers took the attitude that they were insisting on a transfer being presented to them for the following reasons, and I quote from the affidavit of Mr Michael John Wynn Harrison, a partner in the seller's solicitors. He said this of the sale:

"The [seller] was not under any circumstances prepared to remain the Registered Proprietor of the land by for example our simply handing over the deeds. The reason for this is that there are obviously liabilities either under the terms of the landlord's covenants in the Underleases or in general legislation relating to the Property or indeed under the Head Lease and my client was not prepare to remain being shown in public documents in the form of the Land Registry Proprietorship Register as the owner. I was not prepare to draw up a Deed of Transfer on the purchasers' behalf as liability on the document would be unacceptable. Also, I do not consider it is permissible for the same conveyancing solicitor to represent both parties to a transaction (although in the absence of any conflict of interest the same solicitor could act for both parties in a small conveyancing transaction where the consideration is below £10,000) but in my experience there is on an auction sale potential for conflict and I did not consider that we could act for the purchaser even if we had been asked to do so."

10. That was the attitude taken by the seller and it may be that this is the first occasion on which the appellant has met a situation in which the seller has taken that attitude. However, I cannot say that this was an attitude which the sellers were not entitled to take. They were entitled to insist on the conditions being observed and they were not bound to waive them.
11. Accordingly, in my judgment there is no prospect of success on appeal and I must decline to give permission accordingly.
ORDER: Application refused