Donegan & Anor v Ghadami & Anor

The first defendant is a property owner and developer and he is interested in the second defendant. He has appeared before us in person today on his own behalf, and as the representative of the company. In these proceedings, in which he is the defendant, his claim is that on 3 June 2006 he agreed with the claimants, who are also property developers, that they enter into a joint venture, the terms of which were set out in an unsigned memorandum of agreement. He also claims that this was done after months of negotiation and the agreement was affirmed in July 2006. The claimants’ case is that there was no such agreement; nothing was ever finally agreed and nothing was signed.

We have been provided with extensive documentation which sets out the background, the case of each side on it, but it is not presently necessarily to refer to this in detail. It is clear that negotiations did break down later in 2006 and it is also clear that no agreement was ever signed. The memorandum of agreement upon which the defendant relies is a six-page document with a number of ticks on it. It is the defendant’s case that the document contains all the specified terms, and, as it is put, ticked as agreed and question-marked if not sure impossible to carry out.

It is important to refer to paragraph 5 of the Memorandum of Agreement, because that is the material part of which is said to be the agreement, or, for the purposes of the present proceedings, a promise in relation to the matters in issue. Paragraph 5 says this :

“As part of this agreement Dan and Den [that is the two claimants] will deliver to Mo and JG [that is the defendant and his wife] by no later than Wednesday [and there is a date on the draft] …following;

“5.1

Unencumbered property known as St Leonard’s, Fryerning, Essex…”

And it sets out details and then it gives details of undertakings by the claimants regarding St Leonard’s.

St Leonard’s is a property of substantial value, said to be in the region of somewhere between £5m and £7m, near Brentwood in Essex. It, and a lodge attached to it, is owned by the claimants and they are the registered proprietors.

In September 2006, the defendants registered unilateral notices against the claimants’ title to St Leonard’s and the lodge house. Unilateral notice claimed there was a proprietary estoppel and that there had been an agreement for sale. In March 2007, the claimants began proceedings in the Chancery Division seeking to remove the registration of the unilateral notices. They claimed, in their own claim, that on 11 January 2007 they had entered into a contract to sell St Leonard’s and lodge house to a Mr and Mrs Patel, of an address in Brentford in Essex, for £7.5 million, with completion today, 21 August 2007. It is said to be a condition of that sale that the unilateral notices be removed before completion. A defence and counterclaim was served on 1 May by the defendant. On 1 May the matter came on before Mann J, and he put the claimants, at that stage, to an election as to whether they wanted an expedited trial or an application for summary judgment. At that stage they elected for an expedited trial, and Mann J ordered that the matter come on for trial before  21 August, again and not before the date of 21 July.

Importantly to this application, he also directed that the defendant provide particulars of the defence; I shall return to those in a moment.

There were further interlocutory proceedings and, on 17 May, Mann J further ordered in respect of the proceedings that a trial take place between 9 July and 10 August.

I have referred to the particulars which Mann J ordered; these were served by the defendant on 11 May. Shortly after the hearing before Mann J on 17 May, that is to say on 24 May, the claimants applied for summary judgment, seeking an order that the claim be struck out on the basis that the defence displays no reasonable defence. That matter came on for hearing before Briggs J on the afternoon of 12 June. The defendant has made various complaints about the way in which the matter came on, and I shall refer to those in a moment. However, it is clear that Briggs J heard the matter during the afternoon of 12 June, and on the following morning, on 13 June, he gave judgment in favour of the claimants, holding there is no defence for the claim, and summary judgment was entered.

An application for permission to appeal and for a stay was refused by Briggs J. The defendant applied to this court for permission to appeal and for a stay; further grounds were also filed on 11 August 2007. The application was referred on paper to me, and on 17 August I refused permission to appeal and to stay. The defendant renewed his application again in person and this has come on before this court today. It has done so in the light of the fact that, as I have already mentioned, completion under the sale that the claimants say they made to Mr and Mrs Patel is due today.

Before us there are a substantial number of papers and I have had an opportunity of looking at them again, and in particular the pleadings, the statements and the skeleton arguments confined. It is important, in my judgment, to appreciate that, at the hearing before Briggs J, the claimants proceeded on the basis that the matter set out in the defendant’s defence and, in particular, in the particulars, were correct. It was the claimants’ case that, even on that basis, the registration of the unilateral notices could not be maintained and they were entitled to summary judgment.

To examine that contention it is necessary to look in a little more detail at the defendant’s case, before turning to deal with the procedural errors which he has emphasised in argument before us today.

The defendant’s case on proprietary estoppel, as set out in the pleadings and the other documents, was essentially this: 1) There was an oral agreement from the joint venture set out in the Memorandum of Understanding to which I have referred. The price to be paid by the claimants to enter into the joint venture was the transfer, to the defendant and his wife as I have set out, of the St Leonard’s property and lodge house. In reliance on the promise to proceed that had been thus made, the defendant incurred detriment by ceasing to negotiate with others, arranging meetings with third parties including professionals, surveyors and solicitors, including David Cooper and Co., a well-known solicitor in commercial property.

Finally it is said that, as the claimants had failed to proceed with the joint venture, it would be unconscionable not to transfer St Leonard’s and the lodge to the defendant, and he therefore claims that, on that basis, he is entitled to register his proprietary estoppel, and he would succeed at trial in showing there was such an estoppel, with the result that St Leonard’s and lodge house would be transferred to him.

The claimants, in opposition to that case, put forward three contentions. First, they said that there was no sufficient engagement or promise; the judge carefully considered that issue and held there was an issue of trial. It is therefore not necessary for me to go into the facts as to whether there was or was not such a promise, or materials that show that that was an issue for trial. But its importance, in the context of the complaints that were made about the proceedings before Briggs J, is that it demonstrates how carefully the learned judge looked at the materials. So, on that first point, the claimants’ application for summary judgment failed.

The second contention made by the claimants was there was no detrimental reliance, or no sufficient detrimental reliance, shown. In the particulars which the defendant gave, he set out what he relied on and, in particular in paragraph 6, the actions that he had taken in reliance; and paragraph 7, action which he said he was encouraged by the claimants to do.

As I have already mentioned, the essence of that was a contention that he had stopped negotiating with other parties in respect of the joint venture; and secondly, he had dealt with very well known people in the commercial property world and incurred fees that were significant in relation to the professionals. In the particulars, he said this in relation to the fees:

“Continuing to retain Mr David Cooper of David Cooper & Co, a specialist Planning Lawyer for the purpose of obtaining planning permission for our Joint Venture under the new company was to be formed between Mr Donegan and myself. Mr Cooper’s negotiation/correspondence on my behalf with Reubens and the possible threat of a Judicial Review upon recently acquired planning permission.

I have also instructed Mr Kevin McGovern and his partner of Manley International to deal with Benoy the architects for the development of Harlow town.”

And in his annex to his skeleton argument which has been before us today, and is before me on the application on paper, further details are given on the detrimental reliance relied upon.

The judge considered, at paragraph 28 of his judgment, that nothing went beyond, in the matter as set out by the defendants, which might be expected of an entrepreneur in the position of the defendant to expect him to conclude a finding joint venture. His view was that nothing had happened here that was not referable to the continuation of the negotiations that one would have in relation to a joint venture but that had not been consummated by a signed agreement. There was, therefore, no relevant detrimental reliance or no sufficient detrimental reliance.

The judge also referred to an email where the defendant, in August 2006, referred to the need for a written agreement, which the judge considered was not consistent with reliance. The judge concluded, therefore, on those two grounds that there was insufficient, even on the defendant’s full text(?), evidence that, even if shown to the fullest extent, would prove sufficient detrimental reliance in law. He therefore found for the claimants on this issue.

It was not, therefore, strictly necessary for him to consider the third point: namely whether there was a prospect or a reasonable prospect that a court would order the transfer of St Leonard’s and the lodge in satisfaction of the estoppel, assuming that there had been detrimental reliance; the judge accepted that argument. He relied, in a judgment of Lloyd J as he then was, in Ravensocean v Gardner (unreported) [19 January 2001]and concluded that the court would not order such a transfer.

I first turn to consider whether the judge was correct in relation to those issues and whether there is any reasonable prospect that this court, if it were to hear the matter in full, would come to a different view. In his skeleton argument grounds of appeal and in his written statement, the defendant seeks to show that there was detrimental reliance. I have again carefully considered what is said, but it seems to me that none of this meets the essence of Briggs J decision, namely that the acts relied on are all acts that would be expected of a party who was in the process of negotiating a joint venture. In my view, having reconsidered the matter again, I cannot see that there is any reasonable prospect that a court would come to a different view in relation to the issue of detrimental reliance.

I then turn to consider the second question on which the judge decided the issue against the defendant: namely whether there was any prospect that St Leonard’s and lodge house, or interest therein, would be transferred in satisfaction of the promissory estoppel on the assumption that there would have been sufficient detrimental reliance. In my view, the prospect of a court ordering such a transfer is non-existent. It seems to me that, on this particular point, there is no prospect whatever of this court on full argument being persuaded that the judge came to a wrong view.

I therefore turn to consider the final group of points that have been made and particularly emphasised during the oral argument before us today; they all relate, essentially, to the fairness of the procedure that was adopted. The first point, as I understand it, is that Mann J, having put the claimants to their elections as to whether they wanted a trial or whether they wanted summary judgment on 1 May, was wrong to go back on that. However, the rules are quite clear that a party can apply for summary judgment at any time and, in my view in this case, it was entirely fair that they should do so. The essence of their application was based upon the particulars of the defence provided by the claimant on 11 May 2007. It was in the light of those particulars that the application was launched and, as they set out the defendant’s case in full for the first time, bearing in mind his defence and counterclaim was brief, it was, in my judgment, entirely fair for a judge to reconsider the issue of summary judgment.

Secondly, it is said that the application, made in respect of the summary judgment proceeding, was deficient in that it did not state it was for summary judgment, and it did not contain the correct notice in respect of the defendant being entitled to put any evidence in. As to those two points, it seems to me first of all that it is quite clear from the application notice what was being said: namely that there was, in the defence that had been raised, no prospect of success; and it was entirely open to the judge to treat this either as an application to strike out, which was what the application notice stated, or as an application for summary judgment; it amounted to exactly the same. Secondly, the defendant did in fact serve evidence which was before the judge, and which we had read.

But even if those two points are not sufficient answers to this procedural complaint, it appears that none of these particular points were made to the judge. If they were not made to the judge, it seems to me in any event it is too late to make them now.

It is next complained about that the judge rushed the matter. It is said that he did not have sufficient time to read the papers, as the matter had been referred to him, and had come on without him having sufficient time to read the papers; and secondly that he had restricted the timing to 4.00, therefore not giving the defendant sufficient time to deal with it; and, by way of illustration, it is said in the post judgment discussion which we have had the opportunity of reading, the judge had shown how little familiar he was with the papers because he had asked about the counterclaim and where was it, indicating he had, it is said, been unaware of the existence of the counterclaim.

I have carefully looked at the documentation in relation to this, and in particular the way in which the counterclaim is framed. It seems to me that the counterclaim, which is set out in a few short paragraphs, raises the very issues that the judge had to consider as part of the defendants’ defence. By way of illustration, paragraph 1 of the counterclaim says “(^^ checked to audio) part of the agreement is the claimants’ house is a non refundable deposit to the defendant by way of a gift”. That particular point, that it is by way of a gift, is picked up by the judge in paragraph 21 of his judgment, where the judge sets that fact out in terms.

Taking that by way of illustration, it is perfectly that all the points that are set out in the counterclaim were well before the judge and taken into account by him, when he considered the matter and gave his careful judgment on the following morning.

I see no prospect of that point being shown to amount to anything of substance, and certainly nothing amounting to any procedural irregularity. It seems to me the judge knew perfectly well all the material matters that went to a consideration of the issues.

It is next said that the judge did not look at all the evidence and that this is what he should have done under the terms of CPR part 24. However, as I have already endeavoured to point out, a substantial amount of the material went to the question as to whether there had been a promise or other matter, upon which the defendant could rely, and the judge decided there was a triable issue on that. On the materials, and some of them are quite extensive, that, going to the issue as to whether there was detrimental reliance, it seems to me clear that the judge approached the matter on the basis of the facts that are most favourable to the defendants, as he has based himself upon the particulars of the defendants’ own case. It is, in my view, important to emphasise, yet again, that that is the basis upon which this matter proceeded before Briggs J, and important again to emphasise that he decided this on the basis that there was no triable issue on two points, even though there might have been on one.

It seems to me, therefore, looking at the matters, as I understand them, about which procedural complaint is made, there is no substance in any of them and, in my judgment, this matter was fairly and properly determined by the learned judge. For those reasons, therefore, having had an opportunity of reconsidering the matter, and hearing the arguments that have been carefully put before us by Mr Ghadami both in person and in writing, I would refuse permission to appeal.

I agree. I would only add a few words on the procedural issues which have formed the thrust of the applicant’s oral arguments this morning. Mr Ghadami complains about Briggs J conduct of the hearing, saying that the judge was rushed and had not read all the documentation; my Lord has dealt with this in some detail. Consequently, it is said that the applicant did not get a fair hearing. Having read the relevant papers, I, for my part, am satisfied that the judge below had a good grasp of what were the real issues in the case, which my Lord has identified in his judgment this morning. Whether or not the judge below had initially been unaware that there was a counterclaim in fact in this case is not of significance. The judge was not dealing as such with the counterclaim which, in any event, added little, if anything, to the points made in the defence. The documentation in the case was very substantial, but it was the task of those appearing before the judge to draw his attention to the documents upon which they relied. I have read the judgment here with care; it was a very thorough and careful one. Like my Lord, I can see no procedural defect and this application must therefore be refused.