Kuznetsov v London Borough of Camden

On a strike-out application, the court asks whether the pleaded or proposed case has a real prospect of success. Strike-out is inappropriate where a serious factual issue requires oral evidence, and is generally justified only where the claim is bound to fail. A contract for the sale or other disposition of an interest in land may comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 where one document, signed by or on behalf of both parties, incorporates the expressly agreed terms. A countersigned offer may therefore satisfy the section, if a binding contract is otherwise established. Possession obtained under compulsory purchase powers does not complete such a contract.

The claimant appealed against an order striking out his claim and refusing permission to amend his particulars of claim. He alleged that a letter from the defendant local authority, offering to purchase his leasehold property at a valuation and pay compensation and expenses, became a binding agreement when he countersigned and returned it. The Deputy Master held that the letter did not contain all essential terms required by section 2 of the Law of Property (Miscellaneous Provisions) Act 1989.

The appeal concerned whether the proposed contractual case had a real prospect of success, whether the letter complied with section 2, whether compulsory acquisition and possession completed the alleged contract, and whether the letter itself effected a disposition of the leasehold interest.

1. Outcome. The appeal was allowed on Ground 1, but dismissed on Ground 2. The proposed contractual claim could proceed and was not struck out.
2. Under CPR 3.4(2)(a), the court considers whether the pleaded or proposed case has a real prospect of success. A claim may be struck out as legally invalid, but a serious live issue of fact requiring oral evidence should not ordinarily be resolved summarily. Strike-out is generally appropriate only where the claim is bound to fail (para [43]).
3. The Deputy Master was wrong to conclude that the letter omitted essential terms. The document identified the parties, the property, and the price, the latter being determinable by reference to the Red Book valuation. If a contract was otherwise concluded, the section 2 requirements could be satisfied by the claimant countersigning the defendant’s signed letter and returning it (paras [50], [56], [59]).
4. Commission for the New Towns v Cooper (Great Britain) Ltd [1995] Ch 259 did not establish a general rule that an exchange of correspondence can never satisfy section 2. It addressed the absence of one document signed by both parties and the statutory reference to exchanged contracts. Its reasoning supported the traditional exchange of identical contracts, but did not prevent a single document signed by both parties from complying with section 2 (paras [52]-[58]).
5. The completed-contract argument failed. Although the section 2 requirement may fall away after completion, possession obtained under the General Vesting Declaration resulted from compulsory purchase powers and was not completion of the alleged sale contract. The letter also did not itself dispose of the property; a formal transfer would have been required (paras [45]-[48]).
6. Arguments concerning the apparent unilateral nature of the agreement and the adequacy of consideration had force, but involved non-straightforward issues requiring fuller consideration. They did not justify strike-out at that stage (paras [61]-[63]).

• High Court (Chancery Division): Deputy Master Cousins struck out the original particulars of claim under CPR 3.4(2)(a), dismissed the claim, and refused the proposed amendments. On appeal, the order was upheld in relation to Ground 2 but set aside in relation to Ground 1, so the proposed contractual claim was not struck out.