Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd, Targetfollow Group Ltd: ChD 9 Nov 2004

The defendant entered into an agreement for lease, incurring substantial obligations. When it could not meet them it sought assistance from the claimant, who now claimed to have an interest in a joint venture. The draft documentation originally suggested a loan, but then changed. Disagreements persisted after completion.
Held: There was insufficient agreement to constitute a binding obligation immediately before completion. If the contract was for an interest in land, section 2 of the 1989 Act was not satisfied. Unlike section 40 of the Law of Property Act 1925, section 2 does not merely prohibit the enforcement of oral contracts; it prohibits the making of oral contracts. An oral offer and acceptance does not, therefore, amount to a contract at all. No Pallant v Morgan equity arose. The claim was dismissed.
Discussing Tootal, Lewison J said: ‘However, Tootal Clothing Ltd v. Guinea Properties Ltd Management Ltd (1992) 64 P and CR 452 does appear to support Mr Purle’s submission; and although other parts of that decision were doubted in Grossman v. Hooper [2001] EWCA Civ 615; [2001] 3 F.C.R 666 [a reference to Scott LJ’s obiter observations in paragraph 4], this part was not. Tootal binds me; and I must therefore apply it. What Tootal appears to me to decide is that s. 2 applies only to an executory contract for the sale or disposition of an interest in land; and that once all the land elements of an alleged contract have been performed, the remaining parts of the alleged contract can be examined without reference to s.2 . . ‘


Lewison J


[2004] EWHC 2547 (Ch), (2005) 2 PandCR 8




Law of Property (Miscellaneous Provisions) Act 1989 2


England and Wales


CitedGibson v Manchester City Council HL 8-Mar-1979
The plaintiff sought specific performance of what he said was a contract for the sale of land.
Held: The appeal succeeded. In a case where a contract is alleged to have been made by an exchange of correspondence between the parties, in which . .
CitedSmith v Henniker-Major and Co CA 22-Jul-2002
The claimant appealed the strike-out of his claim for professional negligence against the respondent solicitors. He claimed that the solicitors had acted in breach of their duty, and he then called a company meeting. Only he attended. He mistakenly . .
CitedGrossman v Hooper CA 11-Apr-2001
The parties had lived together in the house, each contributing but held in the name of one only. The parties disputed the effect under the 1989 Act of a letter signed by each of them setting out their agreement as to the basis on which it was held. . .
CitedBaird Textiles Ltd v Marks and Spencer plc CA 28-Feb-2001
The more embryonic is an oral ‘agreement’, the less likely it is that the parties intended to create legal relations at that stage. For there to be an agreement formed by conduct, there must be a course of dealing from which a contract is . .
CitedTootal Clothing Ltd v Guinea Properties Ltd CA 1992
By a single commercial transaction the parties agreed to the grant of a lease, on terms that Tootal (the intending lessee), would carry out shop-fitting works, have the benefit of a three months rent-free period during the which the works were to be . .
CitedGodden v Merthyr Tydfil Housing Association CA 15-Jan-1997
The Plaintiff was a building contractor; the Defendant a housing association engaged in developing suitable sites for residential accommodation for letting to tenants. Before the contract the parties had successfully completed what was been called . .
CitedNweze and Another v Nwoko CA 29-Mar-2004
The parties had settled their dispute in an oral compromise agreement under which it was agreed that land would be sold at the best price reasonably obtainable. One now argued this was unenforceable as an agreement for the disposal of land requiring . .
CitedDriver v Broad 1893
An agreement to create a floating charge counted as an interest in land. Kay LJ said that there was no distinction between a debenture which expressly gives the company liberty to dispose of the charged property ‘in the ordinary course of its . .
CitedMorris v Baron and Co HL 1918
The House drew a distinction between a variation of a contract required to be evidenced in writing, and the rescission (or discharge) of such a contract. The former was itself required to be evidenced in writing; the latter was not.
Lord . .
CitedMcCausland and Another v Duncan Lawrie Ltd and Another CA 18-Jun-1996
The parties entered into a written contract for the sale of land which, in error, provided for completion on a Sunday. The parties varied the date to the Friday but did not execute a new contract which would comply with section 2(1) of the 1989 Act. . .
CitedForster v Hale 1800
An oral partnership agreement can be valid and if the partnership assets include land, then the land is held on a constructive trust for the partnership. . .
CitedDale v Hamilton 1846
An oral partnership agreement mat be valid despite the partnership owning land. . .
CitedPallant v Morgan ChD 1952
The agents of two neighbouring landowners orally agreed in the auction room that the plaintiff’s agent would refrain from bidding at auction and that the defendant, if his agent’s bid was successful, would divide the land according to an agreed . .
FollowedBanner Homes Group Plc v Luff Developments and Another CA 10-Feb-2000
Competing building companies agreed not to bid against each other for the purchase of land. One proceeded and the other asserted that the land was then held on trust for the two parties as a joint venture.
Held: Although there was no formal . .
CitedLloyds Bank Plc v Carrick and Another CA 17-Apr-1996
Mrs Carrick was a widow who orally agreed with her brother in law, a builder, to sell her house and pay him the proceeds, for which he would provide her with a new house. She did so and moved into the new house, which remained in the . .
CitedOxley v Hiscock CA 6-May-2004
The parties were not married, but had brought together their resources to purchase a home in the name of one of them. Nothing had been said about the respective shares on which the property was to be held.
Held: The shares were to be assessed . .
CitedPridean Limited v Forest Taverns Limited; Hipwell and Marshall CA 28-Nov-1996
The claimant owned a public house. It set out with the defendant to to acquire the premises or to take a lease of them. The defendant went into occupation, and carried out works. Negotiations continued, but broke down over the form of protection to . .
CitedLondon and Regional Investments Ltd v TBI Plc and Others CA 22-Mar-2002
TBI was a property investor and developer with several subsidiaries. It agreed to sell some to London and Regional. The agreement provided for the vendor and the purchaser to use reasonable endeavours to agree the terms of a joint venture agreement . .

Cited by:

CitedCobbe v Yeomans Row Management Ltd and Others ChD 25-Feb-2005
Principles for Proprietary Estoppel
A developer claimed to have agreed that upon obtaining necessary planning permissions for land belonging to the respondents, he would purchase the land at a price reflecting its new value. The defendant denied that any legally enforceable agreement . .
CitedVan Laethem v Brooker and Another ChD 12-Jul-2005
The claimant asserted an interest in several properties by virtue of a common intention constructive trust or by proprietary estoppel. The parties had been engaged to be married.
Held: ‘A [constructive] trust arises in connection with the . .
Appeal fromKilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd and Another CA 16-Nov-2005
The defendant had brought in the claimant in order to assist in satisfying its own obligations under a lease. The joint venture was not recorded in a formal agreement. The appellant asserted that a constructive trust had been created. The judge had . .
CitedOun v Ahmad ChD 19-Mar-2008
The parties agreed in writing for the sale of leasehold property to the claimant. One document had been signed, but later one said that it had not included an aportionment. Another document then set out the apportionment. When the defendant refused . .
CitedKeay and Another v Morris Homes (West Midlands) Ltd CA 11-Jul-2012
The claimants sought damages alleging breach of contract. The defendants argued that the contract related to land, and since it was an oral agreement it was unenforceable under the 1989 Act.
Held: It was not possible that a contract which was . .
Lists of cited by and citing cases may be incomplete.

Landlord and Tenant

Updated: 27 June 2022; Ref: scu.219338