Hellfire Entertainment Ltd v Acimar Ltd

A contract for the sale or other disposition of an interest in land is unenforceable unless it satisfies Law of Property (Miscellaneous Provisions) Act 1989, section 2. A court may strike out a defective claim, but should ordinarily give the party an opportunity to obtain legal advice and amend where there is a realistic prospect of curing the defect. Any procedural irregularity causes no injustice if the proposed amended pleading would still have no real prospect of success. Proprietary estoppel requires a sufficiently clear assurance, reasonable reliance and detriment. A claim in unjust enrichment requires enrichment at the claimant’s expense and an unjustifying factor, such as failure of basis.

The Claimant appealed against an order of District Judge Jackson striking out its claim under CPR r.3.4(2)(a) as totally without merit. The claim alleged that emails created an agreement under which the Defendant would acquire land and transfer a 50% interest and associated leasehold land to the Claimant.

On appeal, the Claimant relied on breach of contract, proprietary estoppel and unjust enrichment, and produced draft amended Particulars of Claim. The central issues were whether the original claim was legally unsustainable, whether the immediate strike-out was procedurally irregular, and whether any irregularity caused injustice.

1. Disposition. The appeal was dismissed. The original claim was rightly struck out, and the draft amended claims had no real prospect of success.
2. Contract. The pleaded agreement was a contract for the sale or other disposition of an interest in land. It therefore required compliance with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. No signed written contract incorporating all expressly agreed terms existed. The District Judge’s reference to the Law of Property Act 1925 and to a deed did not matter because the legal principle applied was correct.
3. Procedure. The District Judge was entitled to raise the substantive defect, but it was procedurally irregular to strike out the claim without allowing the Claimant, which was represented by non-lawyers at a directions hearing, an opportunity to obtain legal advice. The practice identified in Soo Kim v Youg Park supported allowing amendment where there was reason to believe the defect could be cured.
4. No injustice. Under CPR r.52.21(3)(b), the irregularity would justify allowing the appeal only if an adjournment could have produced an amended claim for which permission would have been granted. It could not. The Claimant company had not pleaded or evidenced that Mr Ian Snowball was authorised to act for it. The contract claim remained barred by section 2.
5. Proprietary estoppel. Although an incomplete agreement can in principle support an estoppel, the emails showed that the parties expected a formal signed agreement before becoming bound. There was no realistic prospect of proving reasonable reliance or sufficient detriment. The Claimant also could not show that relevant representations were made to it rather than to Mr Snowball personally.
6. Unjust enrichment and other equity. The pleaded works lacked particularity and were not shown to have been undertaken by or at the expense of the Claimant. Work after the Defendant repudiated the alleged arrangement could not be attributed to a continuing joint understanding. A Pallant v Morgan equity could not answer the strike-out because it had not been pleaded.

• High Court (Chancery Division): Appeal from the order of District Judge Jackson dated 31 March 2020 dismissed. The strike-out under CPR r.3.4(2)(a) was upheld.