Roger George Matthews v Frank Kempthorne Matthews

An alleged oral option to purchase land at full market value may support a proprietary estoppel claim, although it is unenforceable as a contract under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989.

On an application for an interim injunction, the court applies the American Cyanamid principles. The balance of the risk of injustice may favour refusing relief where preventing a protected party’s property sale would imperil care funding and cause serious irremediable harm. An alleged right to buy at full market value does not support an injunction at a materially lower valuation, particularly where the market has produced a substantially higher offer.

Roger Matthews sought an injunction restraining the sale of three farms and parcels of land owned by Frank Matthews, a protected party represented by his deputy. Frank had substantial debts, ongoing care costs and insufficient cash resources. His deputy had marketed the properties and received a cash offer of £5.8 million.

Roger relied on an alleged oral option, or right of first refusal, to purchase the properties at full market value. He relied on a January 2024 valuation of £3.45 million and did not offer to match the £5.8 million offer. The central issues were whether there was a serious issue to be tried, whether damages would be adequate, where the balance of risk of injustice lay, and whether the merits should affect the interim decision.

1. Application dismissed. The claimant established a serious issue to be tried concerning the alleged oral option and the other elements of proprietary estoppel, assuming the option existed. The alleged oral option was accepted as unenforceable as a contract under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, but capable of supporting proprietary estoppel based on representation, detrimental reliance and unconscionability.
2. Damages would not be an adequate remedy for the claimant. If the properties were sold, he might permanently lose the opportunity to acquire them, together with the benefit of his connection to the land, his work and expenditure, and opportunities forgone in reliance on the alleged option. Those matters could involve irreparable loss.
3. Damages would also not be an adequate remedy for the defendant. Restraining the sale would leave him unable to meet substantial debts and continuing care costs, with the likely consequence of a move to residential care against his wishes. The resulting distress and possible deterioration in his condition would be irreparable.
4. The balance of the risk of injustice therefore favoured the defendant. The proposed interim arrangement involving purchases of Lots 2 and 3 could not resolve the funding problem and could not proceed without Court of Protection authorisation because the claimant was a connected person.
5. The court left wider merits arguments out of account. Independently, however, the claimant’s case contained a fatal flaw. Full market value had to be assessed at or near the date of sale. The market offer of £5.8 million represented that value on the evidence available, whereas the claimant relied on the earlier £3.45 million valuation and did not offer £5.8 million. His alleged option therefore did not entitle him to purchase at £3.45 million.
6. The parties were directed to agree an order. Remaining matters, including costs, were to be dealt with in writing.