Harmohinder Singh Gill (as Trustee of the Gilcrest UK Pension Scheme) v Lees News Limited
[2023] EWHC 403 (Ch)
Moqsud Ahmed Khan v Abdul Malik & Anor
12 October 2023
[2023] EWHC 2529 (Ch)
High Court
Two brothers invested in a restaurant, agreeing the owner would give them a new lease. He didn't, so they sued and won. The court said even though some details were unclear, the main agreement was clear enough, and they got back their money for buying shares and fixing the place because the owner's actions made that money useless.
Key Facts
- •Claimants (father and son) sued Defendant for £92,071.22 based on an alleged oral agreement from August 8, 2016.
- •The agreement concerned investment in the Defendant's restaurant, including a share purchase and refurbishment, with a new lease to be granted to a company controlled by the Claimant's wife.
- •The Defendant failed to grant the lease as agreed, instead granting it to another party.
- •The Claimants claimed for expenses incurred in buying shares and refurbishing the property, arguing these were wasted due to the Defendant's breach.
- •The trial judge found in favor of the Claimants, finding the agreement sufficiently certain despite uncertainties about lease commencement date and grantee identity.
Legal Principles
An agreement for lease requires agreement on parties, property, term, rent, and commencement date.
Harvey v Pratt [1965] 1 WLR 1025
Contracts should not be struck down for uncertainty unless legally or practically impossible to give them sensible content.
The court's job is to give effect to parties' intentions.
A lease commencement date can be ascertained by reasonable inference from the language used.
Marshall v Berridge (1881) 19 ChD 233; Lush LJ in Marshall
Expenses rendered futile by a breach of contract are recoverable as reliance damages.
Anglia Television v Reed [1972] 1 QB 60
Section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 does not apply to agreements to offer a lease to a third party.
Law of Property (Miscellaneous Provisions) Act 1989, section 2(1)
The court may imply terms to give effect to a contract, even if unpleaded, if it is commercially sensible to do so.
Liverpool City Council v Walton Group Plc [2002] 1 EGLR 249
Whether a contract is binding depends on whether communications objectively show intention to create legal relations and agreement on essential terms.
RTS Limited v Molkerei Alois Muller GmbH & Co AG [1994] QB 42
Outcomes
Permission to appeal granted, but appeal dismissed.
The agreement was not an agreement for a lease, but an agreement to offer a lease to a third party. Therefore, the strict requirements of *Harvey v Pratt* did not apply. The judge's finding that the lease commencement date was the formation of the new entity was reasonable. The Claimants' wasted expenditure was recoverable as reliance damages.