Quick Property Sale Limited v Oladotun Olakunle Solaja & Anor

A contract for the sale of land is unenforceable under Law of Property (Miscellaneous Provisions) Act 1989, section 2(1), if it omits an expressly agreed term. Where a deposit is to be used to redeem a mortgage, the agreement must reflect any arrangement transferring beneficial ownership of the deposit to the seller.

Undue influence is established through a unitary doctrine. A relationship of influence and a transaction calling for explanation raise an evidential presumption, which must be rebutted by showing sufficiently independent and informed consent. A purchaser may have constructive notice where it knows facts indicating vulnerability and the circumstances in which the transaction was procured.

A party may treat itself as discharged where the other party’s own act or default makes performance of an essential contractual obligation impossible.

Quick Property Sale Limited sought specific performance of an agreement under which Oladotun and Olayemi Solaja agreed to sell their repossessed home for £436,000. A substantial deposit was held by the sellers’ solicitors as stakeholder, while the parties’ arrangement contemplated that the money would be used to redeem Santander’s mortgage before completion.

The defendants alleged misrepresentation, undue influence and impossibility. They contended that the purchaser’s consultant had procured the agreement while they were vulnerable following repossession, and that the mortgagee would not permit the proposed transaction. The central issues were whether the agreement complied with section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989, whether it was obtained by undue influence of which the claimant had constructive notice, and whether performance was impossible.

1. Claim dismissed. The agreement was unenforceable because it did not incorporate all terms expressly agreed between the parties. The parties had agreed that the deposit would be used to redeem the mortgage, but the written agreement provided that it was held by the sellers’ solicitors as stakeholder. Those arrangements were inconsistent because redemption required beneficial ownership of the money to pass to the defendants. The court applied the stakeholder analysis in Manzanilla Ltd v Corton Property and Investments Ltd, as cited in Gribbon v Lutton.
2. The defendants also established undue influence. The doctrine has a single unitary character. A relationship of influence may arise where a person exploits another’s vulnerability, reliance or dependence; domination is unnecessary, although the court should not infer such a relationship on slight evidence. A transaction calls for explanation where it cannot readily be accounted for by ordinary motives in the relationship. Both conditions were satisfied.
3. The consultant had deliberately approached the defendants immediately before and after repossession, presented himself as able to assist them, directed them to solicitors and encouraged a rapid sale while they were homeless and distressed. The circumstances established a relationship of influence and a presumption that the transaction resulted from undue influence. The claimant did not rebut that presumption because the defendants lacked sufficiently independent and informed advice.
4. The claimant had constructive notice. Its director knew of the recent repossession, the defendants’ homelessness and financial hardship, and the urgency of the proposed sale. The claimant’s solicitor also knew that only money beneficially owned by the defendants would satisfy the mortgagee’s requirements; that knowledge was imputed to the claimant.
5. The misrepresentation defence failed because the defendants did not prove that the consultant was the claimant’s agent. The impossibility defence succeeded independently. Because the claimant had not transferred beneficial ownership of the deposit, the defendants could not redeem the mortgage or give vacant possession. They were therefore entitled to treat themselves as discharged.