Vismead Association Ltd v Lanni

Where a claimant seeks specific performance of a land sale, the court should recognise that recovery of the land, rather than damages, is the substantive objective. If separate proceedings may determine whether the land can still be recovered, immediate assessment of damages may be inappropriate. A refusal to adjourn the original trial does not require damages to be assessed immediately after judgment. The court may defer damages and costs where connected issues should be resolved together, particularly when the separation resulted from the defendant’s failure to disclose a relevant transfer. The Court of Appeal may intervene in a post-judgment case-management decision that is wrong in principle and unfair.

Vismead Association Ltd v Lanni concerned competing equitable interests in land. The appellant claimed specific performance of a Condition of Sale agreement. At trial, Her Honour Judge Kirkham held that the relevant condition benefited the purchaser alone, had been validly waived, and that the agreement was binding.

Before judgment, the respondent had transferred the land to persons claiming under an earlier option agreement, without promptly disclosing the transfer. The appellant brought separate proceedings against those transferees and continued to seek the land rather than damages. The appeal concerned whether damages and costs should nevertheless be determined before those proceedings were resolved.

1. Appeal. The appeal was allowed in part. The appeal against paragraph 3 of the order, concerning assessment of damages, was allowed. The appeal against paragraph 5, concerning costs, was dismissed.
2. Nature of the claim. Lord Justice Stanley Burnton held that the object of the proceedings was recovery of the land by specific performance, not damages. The appellant’s ability to obtain the land depended on the outcome of its separate claims against the transferees. It was therefore wrong in principle to order immediate assessment of damages without taking that pending litigation into account.
3. Justice of deferral. The respondent’s failure promptly to disclose the transfer had prevented all connected issues from being tried together. Any uncertainty or delay caused by deferring damages and costs was substantially of the respondent’s own making. The fact that an earlier application to adjourn the trial had been refused did not make immediate post-judgment assessment inevitable. If justice required the matters to be dealt with together, that could occur after judgment as well as before it.
4. Appellate intervention. Although the order appeared to concern case management, the Court of Appeal was entitled to intervene because the decision was unfair and proceeded on a mistaken principle. Lord Justice Longmore agreed. Lord Justice Ward also agreed.
5. Order. The assessment of damages was stayed until judgment in the separate proceedings between the appellant and the recipients of the land. Liberty to apply was granted in relation to the stay. Costs and damages were both left undetermined until after judgment in those proceedings.

• Court of Appeal (Civil Division): Vismead Association Ltd v Lanni, [2009] EWCA Civ 1579. Appeal allowed in part.
• High Court, Leeds District Registry, Chancery Division: Her Honour Judge Kirkham held that the Condition of Sale agreement was effective and binding, ordered damages to be assessed on the first open date after 1 June 2009, and deferred costs to the assessment of damages.