Butts Park Ventures (Coventry) Ltd v Bryant Homes Central Ltd

A contractual right of pre-emption over land remains effective after the owner contracts to sell to a third party. It is discharged only when that sale is completed, so that a further disposal is impossible. A court exercising its equitable jurisdiction to wind up an unincorporated association may appoint persons to perform liquidator functions and confer appropriate powers on them. Where a later sale validly exercises the pre-emption right, a conditional earlier contract containing a condition requiring non-exercise of that right cannot become unconditional and gives the purchaser no subsisting interest in the land.

Coventry Football Club, an unincorporated association, owned a rugby ground. It granted Leander a contractual right of pre-emption and later entered into a conditional agreement to sell the ground to Bryant Homes Central Ltd.

The Club was subsequently wound up under the High Court’s equitable jurisdiction. Persons appointed by the court as joint liquidators exercised the pre-emption right, and the ground was transferred to Leander’s assignee, later renamed Butts Park Ventures (Coventry) Ltd.

The dispute concerned the validity and continuing effect of the pre-emption agreement, the validity of the equitable winding-up order and the priority between the transfer to Butts Park and Bryant’s conditional agreement.

1. The pre-emption agreement was valid. The evidence supported the inference that the relevant documents bore original signatures. The requirements of Law of Property (Miscellaneous Provisions) Act 1989, section 2, were therefore satisfied. The confirmatory letter signed by all three trustees also established that the agreement bound the Club and its trustees.
2. The Bryant Agreement did not discharge the pre-emption right. The right arose when the Club decided to sell or dispose of the ground. The agreement with Bryant was not itself a completed disposal. The pre-emption obligations continued until the proposed sale was completed by transfer, because a further disposal remained possible. Any defect in the notice of proposed disposal would have constituted a contractual breach, but that issue was distinct from whether the Bryant Agreement discharged the pre-emption right.
3. The winding-up order was valid. The court had an equitable jurisdiction to wind up the unincorporated Club and to appoint persons to collect its assets and distribute them according to the members’ rights. It could give those persons any appropriate description, including that of liquidators, and confer powers corresponding to those set out in Schedule 4 to the Insolvency Act 1986.
4. Butts Park obtained priority. The pre-emption right was properly exercised and completed by the transfer to Butts Park. The Bryant Agreement remained conditional on the non-exercise of the pre-emption rights. Since those rights had been exercised, that condition could never be fulfilled, and the Bryant Agreement could never become unconditional. Bryant therefore had no present interest in the ground.
5. The caution lodged by Bryant was ordered to be vacated. The court declared that Bryant had no subsisting interest in the ground and directed further argument concerning the legal charge referred to in the claim form.