Robinson & Anor v Lane

An oral agreement for the sale or other disposition of an interest in land is void under Law of Property Miscellaneous Provisions Act 1989, section 2, if not expressed in writing. A payment made under such an agreement is not a contractual deposit. The payer’s restitutionary entitlement to recover it can supply consideration for a later promise to repay where the payer agrees to forbear from pressing for repayment. The character of the original agreement depends on the parties’ intentions and the findings made. It must be distinguished from a lockout agreement, which postpones sale rather than effects an agreement to sell. A pre-contract deposit is ordinarily returnable; non-returnability requires a precise, clear and express stipulation linked to a defined condition.

Mr Robinson paid £15,000 to Mr Lane following an oral agreement in October 2000 for the purchase of Lane’s flat for £45,000. The purchase was not completed. After Lane sold the flat to another purchaser for £88,000 in 2004, the County Court found that the parties agreed that Lane would repay the £15,000 and pay half the excess over £45,000 in return for Robinson’s forbearance.

The County Court awarded Robinson £42,000. Lane appealed, but permission was not given to challenge the factual findings. Permission was limited to the legal analysis of consideration and whether the original arrangement was a sale agreement or a lockout agreement.

Appeal dismissed unanimously. The Court of Appeal held that the County Court’s factual findings established an agreement to sell and transfer the flat, rather than a lockout agreement. The informal nature of the arrangement and the absence of detailed terms did not prevent that construction. The material findings identified the property, the price and the parties’ intention to sell and purchase it.

1. Under section 2 of the Law of Property Miscellaneous Provisions Act 1989, an oral contract for the disposition of an interest in land is void if it is not expressed in writing. The original agreement was therefore not a contract, and the £15,000 payment was not a contractual deposit.
2. On that analysis, Mr Robinson was entitled to recover the payment under ordinary restitutionary principles. His agreement to forbear from pressing for its return provided consideration for Mr Lane’s later promise to repay it. The lack-of-consideration objection therefore failed.
3. The proposed alternative analysis based on a lockout agreement failed. A lockout agreement postpones a sale for a specified period; the findings instead showed that Mr Lane believed he had sold the property to Mr Robinson.
4. For completeness, the court considered the alternative law of pre-contract deposits. Such a deposit is ordinarily returnable. Non-returnability requires a very precise, clear and express stipulation linked to a clearly defined condition. No such stipulation was found. This reasoning was alternative and unnecessary to the decision.
5. Sir Richard Buxton added that it was not necessarily correct that forbearance to pursue an invalid claim could never constitute consideration. That issue did not arise for decision and was left open. Lord Justice Moore-Bick and Lord Justice Thorpe agreed with the reasoning and disposition. The formal order was application refused.

• Court of Appeal (Civil Division): The appeal was dismissed unanimously. Permission was confined to the legal analysis of the agreements and consideration.
• York County Court: His Honour Judge Ibbotson found that the parties agreed to repayment of the £15,000 and payment of half the excess sale proceeds, and awarded £42,000.