Freeguard v Rogers

Where a conveyancing agreement describes land as property known as a stated address, extrinsic evidence is admissible to identify what property bears that description. The evidence may include the physical layout and sale particulars available to the parties. It identifies the subject matter; it does not vary an unambiguous contractual term. A false title number may be disregarded where it does not identify the intended property.

An inquiry into contractual damages should not be ordered unless breach and resulting loss have been established. Under an open contract with no completion date, completion is due within a reasonable time. However, a buyer who would not complete on the contract's proper terms may be unable to show loss caused by the seller's failure to complete.

The respondents held a six-month option to buy the appellants' house at 9 Graffham Close. The written agreement gave an incorrect Land Registry title number. The adjoining garage was held under a separate leasehold title, although it was physically connected with the house and had been included in estate agents' particulars.

Deputy Master Weir held that the option had been validly exercised, that the property included the garage, and that specific performance should be granted. He also ordered an inquiry as to damages for breach of contract. The defendants appealed, challenging the admission of extrinsic evidence on the garage issue and the damages inquiry.

The central questions were whether the description of the property permitted evidence identifying the garage as part of it, and whether damages had been shown to result from a failure to complete.

Unanimously, the Court of Appeal allowed the appeal only to the extent of discharging the inquiry as to damages. Lord Justice Peter Gibson gave the reasons, with Lord Justice Thorpe and Lord Justice Waller agreeing. The order for specific performance, including the garage, remained in force.

1. The primary description was "the property known as 9 Graffham Close". The erroneous title number was to be ignored. References to freehold ownership and an estate in fee simple did not form part of the primary description so as to exclude the garage.

2. A description of property by the name by which it is known makes recourse to surrounding circumstances permissible, and indeed inevitable, to identify the property. The court applied the approach illustrated by Spall v Owen (1981) 44 P & CR 36 and consistent with Targett and Targett v Ferguson and Diver (1996) 72 P & CR 114. The Deputy Master could consider the physical connection between house and garage, the access from garage to garden, and the publicly issued particulars which treated the garage as part of 9 Graffham Close. Those matters supported the conclusion that the garage was included.

3. The damages inquiry could not stand. An open contract without a completion date requires completion within a reasonable time. Yet an inquiry required a conclusion that the defendants had breached the contract and that the plaintiffs had suffered loss as a result. Both parties had wrongly insisted on terms: the defendants denied the contract or excluded the garage, while the plaintiffs insisted on chattels. The notices to complete were invalid, and the plaintiffs would not have completed on the contract's proper terms before judgment. Loss caused by the defendants' non-completion had therefore not been established.

The appeal was allowed to that limited extent. The costs order below stood, and the respondents received three-quarters of the appeal costs, subject to the stated restriction on enforcement.

• Court of Appeal (Civil Division) — allowed the defendants' appeal only by discharging the inquiry as to damages; otherwise upheld the order. [1999] 1 WLR 375
• High Court of Justice, Chancery Division (Deputy Master Weir) — on 26 June 1997 granted specific performance of the exercised option, held that the garage was included, and ordered an inquiry as to damages.