Rollerteam Ltd & Anor v Riley & Anor

Law of Property (Miscellaneous Provisions) Act 1989, section 2 applies only to an executory contract for a future sale or other disposition of an interest in land. It does not apply to an agreement which itself effects the disposition.

A binding contract may be formed by an exchange of a promise for performance. Where execution of declarations of trust is both acceptance of an offer and consideration for the other party’s promises, there is no prior or contemporaneous executory obligation to make a future disposition. The agreement is therefore one of immediate disposition and need not comply with section 2(1).

Family members negotiated settlement of four sets of litigation concerning a museum business and two London properties. On 11 April 2013, Linda Riley executed declarations of trust over the properties in favour of John Aidiniantz and Rollerteam Ltd. In return, Mr Aidiniantz was to make payments totalling £2 million and perform other obligations.

After paying only £300,000, Mr Aidiniantz contended that no enforceable settlement had been made. The High Court held that a contract was concluded on 11 April 2013 and that section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 did not apply: [2015] EWHC 1545 (Ch). He appealed. The central issue was whether the settlement was void for failure to comply with the statutory formalities for a contract concerning an interest in land.

1. Appeal dismissed. The settlement agreement was not void under section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989.

2. Section 2 applies only to executory contracts for the future sale or other disposition of an interest in land. It does not apply to a contract which itself effects a disposition. This construction follows the distinction between contracts for dispositions and the distinct statutory formalities governing actual dispositions under the Law of Property Act 1925. The court followed the reasoning endorsed in Helden v Strathmore Ltd, McLaughlin v Duffill and Keay v Morris Homes (West Midlands) Ltd.

3. The deputy judge’s findings established that no contract was made on 8 April 2013. The contract arose only on 11 April, when Ms Riley executed the declarations of trust. She did not execute them pursuant to an existing obligation, or promise to execute them in the future.

4. A contract may be formed by an exchange of promises for performance, as in a unilateral contract. Here, execution of the declarations both accepted Mr Aidiniantz’s offer and supplied the consideration for his promises. The agreement accordingly included an immediate disposition of the interests in land; it was not a contract for their future disposition.

5. The wider reading of Joyce v Rigolli advanced by the appellant could not prevail. The question whether an agreement had to be executory was neither argued nor necessary to that decision. No collateral contract needed to be found, because the parties’ obligations were contained in one enforceable agreement.

1. Court of Appeal (Civil Division) Dismissed Mr Aidiniantz’s appeal and upheld the enforceability of the 11 April 2013 settlement: [2016] EWCA Civ 1291.

2. High Court (Chancery Division) Robert Englehart QC, sitting as a deputy High Court judge, held that the settlement was concluded on 11 April 2013, granted the claimants’ declarations concerning the trusts, and gave judgment on the respondents’ counterclaim for the outstanding payments: [2015] EWHC 1545 (Ch).