Moqsud Ahmed Khan v Abdul Malik & Anor
[2023] EWHC 2529 (Ch)
Pathway to Relief & Anor v Shvan Abbas Ali & Anor
4 June 2024
[2024] EWHC 1284 (Ch)
High Court
A community group tried to buy a hotel but didn't get a proper written agreement. The court said the deal was invalid, so they couldn't force the sale. They also lost their claim to use the building under the lease and get their deposit back fully because the agreement wasn't properly written down. They only got the deposit back minus the rent they owed.
Key Facts
- •Members of the Kurdish community in Birmingham attempted to acquire the Farcroft Hotel to convert it into a community center.
- •Negotiations were conducted with the Hotel's owner, Your Best Properties Limited, represented by its director, Shvan Abbas Ali.
- •An oral agreement was reached to sell the Hotel for £1.65 million with an 18-month completion period.
- •A £150,000 deposit was paid in cash, but the terms regarding timing and refundability were disputed.
- •A lease was subsequently executed, but the permitted use was restricted to 'offices,' contrary to the parties' intentions.
- •The relationship soured, leading to the Community's exclusion from the Hotel and the return of the keys.
Legal Principles
Contracts for the sale or disposition of land must be in writing, incorporating all agreed terms (Law of Property (Miscellaneous Provisions) Act 1989, s.2(1)).
Law of Property (Miscellaneous Provisions) Act 1989, s.2(1)
Failure to comply with s.2(1) renders the contract ineffective.
Firstpost Homes v Johnson [1995] 1 WLR 1567
Proprietary estoppel or constructive trusts may not be used to enforce oral agreements void under s.2(1) if the claim is 'essentially contractual'.
Cobbe v Yeoman’s Row [2008] 1 WLR 175; Herbert v Doyle [2010] EWCA Civ 1095
Elements of proprietary estoppel: representation/assurance, reliance, and detriment.
Thorner v Major [2009] 1 WLR 776
A lease can be surrendered by the tenant returning the keys with the intention of ending the tenancy.
Woodfall on Landlord and Tenant, §17-020
Outcomes
Claim for specific performance of the hotel sale failed.
Oral agreement was void under s.2(1) of the 1989 Act; proprietary estoppel claim failed because it was essentially contractual and lacked clarity on key terms.
Rectification of the lease refused.
Lease was terminated by surrender; rectification would serve no purpose.
Claims for damages for breach of contract and lease failed.
Invalid contract; no recoverable loss from actions taken.
Defendants must return the £150,000 deposit, less three months' rent (£15,000).
Defendants admitted holding the deposit on trust; rent was payable under the lease.
Similar Cases
Sheffield City Council v Scotfield Group Limited & Anor.
[2023] EWHC 990 (Ch)
John Baylis & Anor v Syed Ali Haider & Ors
[2024] EWHC 187 (Ch)
South Bank Hotel Management Company Ltd v Galliard Hotels Ltd & Ors
[2024] EWHC 2484 (Ch)
Oak Forest Partnership Limited (in liquidation) & Ors v Mercantile Investment Holdings SA & Ors
[2023] EWHC 1903 (Ch)