Jeffery Falloon v Adnan Ali Khan & Anor

A contract preceding a conveyance may be unenforceable under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, yet the completed transfer may remain effective. The execution and delivery of a TR1 can transfer the seller’s interest in land even where the underlying agreement could not itself have been enforced to compel the transfer. An inaccurate statement of consideration in the TR1 does not, without more, invalidate the transfer where the evidence establishes that title was intended to pass. The court will assess long-delayed allegations of forgery and informal arrangements against the contemporaneous documentary evidence, the parties’ conduct and the commercial realities of the transaction.

The claimant, representing the estate of Clephane Falloon, brought a Part 8 claim seeking rescission of a 2010 sale of land to Adnan Khan, consequential repayment and rectification of the register. Kuflink Security Trustees Limited was joined because it held a later registered charge over the property.

The claimant alleged that Mrs Falloon had agreed a different price and payment arrangement, that documents were forged or unauthorised, and that the TR1 did not validly transfer title. The central issues were the terms and effect of the transaction, the validity of the TR1, and whether the claim against Kuflink was barred or otherwise required determination.

1. The claim failed. The claimant did not establish misrepresentation, mistake, breach of fiduciary obligation, forgery, lack of authority or any other basis for rescission or rectification.
2. The contemporaneous documents established that Mrs Falloon agreed to transfer her legal and beneficial interest in the property for £210,000. £135,000 was applied to secured debts and £75,000 remained payable over 18 months. The arrangement was later varied so that rent due under the assured shorthold tenancy could be set off against the outstanding sum.
3. The documentary evidence was particularly important because the transaction occurred about 15 years before trial, Mrs Falloon lacked capacity before the claim was commenced, and there was no independent witness to the disputed discussions. The claimant’s allegations of forgery were unsupported by expert evidence or other substantive grounds. Under rule 32.19 of the Civil Procedure Rules 1998, authenticity had also been deemed admitted because no notice to prove the documents had been served.
4. The sale and rental agreement did not comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 and could not itself have been enforced by Mr Khan to compel a transfer. That did not determine the effect of the completed conveyance. The evidence showed a conventional conveyancing transaction, including authority to exchange contracts, and the TR1 had been executed and delivered.
5. The TR1 was effective to transfer Mrs Falloon’s interest to Mr Khan. The stated consideration of £250,000 did not reflect the real price agreed between the parties, but that discrepancy did not prevent the transfer from taking effect. There was therefore no basis to impugn Mr Khan’s registered title. It was unnecessary to decide the claim against Kuflink or its limitation defences.