Rudra v National & Provincial Building Society & Anor

For a land-sale contract to comply with the Law of Property (Miscellaneous Provisions) Act 1989, it is arguable that the contractual terms may be contained in a composite set of documents or incorporated by reference. The court did not finally decide that issue on this application.

Where a claim has been struck out and the claimant seeks to rely on fresh evidence supporting an amended pleading, the applications to admit the evidence and to amend or set aside the strike-out may be considered together. At the leave stage, the question is whether the proposed case and evidence have a reasonable prospect of being admitted and heard. Amendment is ordinarily possible where prejudice can be compensated by costs.

The claimant alleged that he had contracted to buy a property from the first respondent through the second respondent, an auctioneer. The pleaded contract consisted only of a memorandum which identified the property and price but did not name the vendor.

A Deputy Master struck out the claim on 5 June 1996, holding that the memorandum did not satisfy section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. On 18 November 1996 Jonathan Parker J affirmed that order.

The claimant sought leave to appeal, permission to adduce further evidence, and permission to amend his pleading. The proposed amended case relied on the memorandum together with general and special conditions of sale, the latter identifying the vendor. The central issue was whether that case was reasonably arguable and should be heard.

Application allowed. Leave to appeal was granted. The application to adduce further evidence was adjourned to the court hearing the appeal. The claimant was directed to file a draft amended statement of claim and supporting evidence, and the respondents were permitted to answer. Costs were costs in the appeal.

1. The claim had been struck out on the pleaded basis that the memorandum alone was the contract. It did not identify the vendor, and the lower courts held that it therefore failed to satisfy section 2 of the Law of Property (Miscellaneous Provisions) Act 1989.
2. The proposed amended case was that the memorandum, the general conditions and the special conditions formed the whole contract. The special conditions named the vendor and described the property. Lord Justice Aldous held that the argument that section 2 permitted a contract to comprise more than one sheet, or to incorporate another document by reference, was arguable and fit to be heard. Lord Justice Millett agreed, whether the documents formed a physically composite document or the special conditions were incorporated by reference. The court did not determine compliance with section 2.
3. The respondents relied on the Ladd v. Marshall criteria for fresh evidence. Aldous LJ considered that, having regard to Williams v. Attridge, Court of Appeal, unreported, 7th July 1997, those criteria might not have to be satisfied where the case had been struck out. Full argument was not heard on that issue. The question was whether there was a reasonable chance that the appeal court would admit the evidence and allow the amendment. Despite the incomplete explanation for the late evidence, refusal could stifle a good claim without a hearing on the merits.
4. The applications to amend and to set aside the strike-out were substantially one application and need not be considered in a fixed sequence. Amendment would normally be allowed where the respondent suffered no irremediable prejudice and any prejudice could be addressed by costs.

1. Court of Appeal (Civil Division): On 22 August 1997, granted leave to appeal, adjourned the fresh-evidence application to the appeal hearing, and gave directions.
2. High Court of Justice, Chancery Division: On 18 November 1996, Jonathan Parker J affirmed the Deputy Master's order.
3. Deputy Master, Chancery Division: On 5 June 1996, declared that the memorandum did not satisfy section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 and dismissed the claim.