R G Kensington Management Co Ltd v Hutchinson IDH Ltd: ChD 2003

Neuberger J decided that he could not follow the court in Jelson, saying: ‘The defendant’s case is that the reference to ‘the parties’ in s.2(3) is to the parties to the proposed conveyance or transfer. Two strands of authority are put forward as supporting that contention. First, that the purpose of s. 2 was to introduce a new and strict regime in relation to contracts for the creation or transfer of interests in land, can be seen from observations of the Court of Appeal in First Post Home Ltd v. Johnson [1995] 1 W.L.R. 1567 at 1571B to H, and McCausland v. Duncan Laurie and Partners [1997] 1 W.L.R. 38 at 44G. Secondly, the result for which the defendant contends is compelled by the reasoning and decision at first instance in this division of Mr David Mackie Q.C. in Jolson [sic] Ltd v. Derby County Council [1999] 3 E.G.L.R. 1991. Despite these authorities, I reject the defendant’s case on s.2.
The purpose and effect of s.2 is to be assessed by reference to the words used by the legislature, and nothing said by the Court of Appeal suggests otherwise. Those words are to be given their natural meaning unless there is some very good reason to the contrary. The closing words of s.2(3) require the contract, or the parts of the contract to be signed by ‘each party to the contract’, not by ‘each party to the prospective conveyance or transfer’. In this case that means that the freehold agreement must be signed by the parties to it, the defendant and Mr Caan. Kensington is not a party to the freehold agreement and, as it is not a party to that contract, it seems there is no reason to require it to sign it. I see no reason to give an artificial meaning to s.2(3) as the defendant’s argument involves, nor do I consider it permissible to do so. Mr Dowding, in his concise submissions on this issue, said that it would be consistent with the spirit of s.2 if a contract such as the freehold agreement could only be enforced in Kensington’s favour if it could be enforced against Kensington. I accept, that the freehold agreement could not be enforced against Kensington unless Kensington had signed it. Accordingly, I see the force of the point, but there is nothing to suggest that the legislature had that sort of consideration in mind when enacting s.2. To give s.2 the meaning and effect that the defendant contends for, would involve an impermissible re-writing and extension or extension of s.2(3). It would also involve giving s.2 a greater degree of interference with Common Law rights and freedom to contract than it naturally bears.
I am not obliged to follow Jolson, but I should only depart from it if I am satisfied that it was wrongly decided, I am clear in my mind that it cannot be supported. It is fair to say that, at least judging from the report, it appears that the simple argument as to why s.2 does not preclude the enforcement of a contract such as the freehold agreement, which causes me to reject the defendant’s case, does not seem to have been raised in terms in Jolson-see the summary of the losing argument at [1999] 3 EGLR 96 B to E.’


Neuberger J


[2003] 2 P and CR 13


Law of Property (Miscellaneous Provisions) Act 1989 82


England and Wales


Not FollowedJelson Ltd v Derbyshire County Council CA 1-Aug-1999
Section 2 of the 1989 Act had to bite at the point where a party could be compelled, in certain circumstances, which could or could not come about, to sell or dispose of an interest in land. The agreement here contained in effect an option for the . .
CitedFirstpost Homes Ltd v Johnson and Others CA 14-Aug-1995
The parties disputed whether a contract had been made. The proposed contract was contained in a letter and a plan but only the plan was signed by both parties.
Held: The requirements of Section 2 had not been satisfied because it was the . .

Cited by:

CitedMilebush Properties Ltd v Tameside Metropolitan Borough Council and Others ChD 13-May-2010
The claimant sought a delaration that it had a right of way over an access road. The defendants said that the agreement fell foul of the 1989 Act.
Held: The claimant was not entitled to the declaration. Agreements under the 1990 Act are . .
Lists of cited by and citing cases may be incomplete.

Land, Contract

Updated: 02 May 2022; Ref: scu.415912