Wilkie v Redsell

Specific performance of a land contract requires the claimant to show that he is presently ready, willing and able to complete, including payment of the price. A speculative prospect of raising finance against an enhanced property value cannot satisfy that requirement. The court will not grant relief merely to create the means of satisfying its own precondition. A claimed trust or proprietary interest cannot circumvent the same requirement where it is substantively a claim for completion. The clean-hands doctrine applies only where the misconduct has an immediate and necessary relation to the equity sought. Equitable relief based on standing by to expenditure must also be structured on terms doing justice to both parties.

The claimant owned land at Detling on which the defendant had occupied buildings and constructed a house. In 1988 the parties made an undocumented agreement for a payment of £30,000, but disputed whether the defendant was to acquire the whole of the relevant land or share it with the claimant. The trial judge found that the land was to be shared, that the defendant defaulted on payment, and that the agreement was treated as ended. Possession was awarded to the claimant and the defendant’s counterclaims for a trust, specific performance and related relief were rejected.

The defendant appealed, challenging the factual findings and relying on the construction of the house, equitable principles concerning standing by, and the clean-hands doctrine. The central issues were whether equitable relief could be granted without present ability to complete the bargain and whether any lesser right to remain in occupation should be recognised.

Buxton LJ delivered the first judgment, with which Dyson LJ and Schiemann LJ agreed. The appeal was dismissed.

1. Factual findings. The Court of Appeal could not go behind the trial judge’s overall conclusion on disputed facts, based on the evidence and his assessment of the witnesses. It was unnecessary to resolve every challenged subsidiary finding because the precise contractual terms did not affect the legal outcome.
2. Specific performance and trust relief. A claimant seeking specific performance must establish that he is presently ready, willing and able to complete his part of the contract. The defendant had neither paid the balance nor offered satisfactory evidence that he could do so. His expectation of raising finance from the increased value of the land was speculative. The court would not grant relief so that he could create the means of meeting a precondition to relief. His alternative claim for a trust or beneficial interest was substantively another form of the specific-performance claim and was subject to the same requirement.
3. Standing by and expenditure. Crabb v Arun [1976] 1 Ch 179 applied the principle in Ramsden v Dyson. That doctrine could not support the proprietary relief sought because the claimant had stood by only on the condition that the price was paid. Even without that condition, completion remained necessary in the absence of any positive waiver. William v Greatrex [1957] 1 WLR 31 was distinguishable because the purchaser there had paid the deposit and could complete the bargain.
4. Clean hands. The relevant formulation from Moody v Cox [1917] 2 Ch 71 required the misconduct to have an immediate and necessary relation to the equity sought. The trial judge was entitled to conclude that the defendant’s inconsistent statutory declaration about his interest in the land, made to obtain a caution, disabled him from seeking equitable relief to establish the contrary position. This was an alternative ground and was not necessary to uphold the judgment.
5. Fallback licence. A licence based on the standing-by doctrine had to impose terms doing justice to both parties. A gratuitous licence would not be equitable, and the proposed arrangement lacked workable terms concerning payment, covenants, continuing relations and planning enforcement. The amendment was therefore refused. Possession was to be granted six weeks after judgment, with costs payable by the appellant subject to the stated funding arrangements.

• Court of Appeal (Civil Division): dismissed the appeal in [2003] EWCA Civ 926.
• Bromley County Court: His Honour Judge David Mitchell found an agreement to share the relevant land, treated it as ended following non-payment, rejected the defendant’s counterclaims for proprietary and equitable relief, and granted possession to the claimant.