HEB Enterprises Ltd and another v Bernice Richards (Cayman Islands)
[2023] UKPC 7
Rarity Holdings Ltd v David Samuel Parkhill
27 June 2024
[2024] EWHC 1637 (Ch)
High Court
Someone bought a house before an auction, paying a deposit to stop it being auctioned. When things went wrong, they got their deposit back because the court said the contract was bad. The seller appealed, but lost because the buyer's benefit (avoiding the auction) wasn't separate from the main house deal.
Key Facts
- •Rarity Holdings Ltd (Rarity Holdings) auctioned a property, which Mr. Parkhill purchased privately before the auction.
- •Mr. Parkhill paid a deposit to remove the property from the auction.
- •Subsequent issues led Mr. Parkhill to seek to withdraw, claiming the contract was invalid under s.2(1) of the Law of Property (Miscellaneous Provisions) Act 1989.
- •The County Court judge ruled the contract void and ordered the return of the deposit due to total failure of consideration.
- •Rarity Holdings appealed only the total failure of consideration aspect of the ruling.
Legal Principles
For a restitution claim based on 'failure of basis', the failure must be total.
Goff & Jones, the Law of Unjust Enrichment, 10th Ed, at §12-16; Whinchup v Hughes (1871) LR 6 CP 78
The basis for a deposit's transfer is determined objectively.
Goff & Jones (above) at §13-02
An appeal against a finding of fact succeeds only if the finding is unsupported by evidence or no reasonable judge could have reached it.
Haringey LBC v Ahmed [2017] EWCA Civ 1861, at §31
Outcomes
Permission to appeal refused.
The court found no real prospect of success. The benefits Mr. Parkhill received from removing the property from the auction were not independent of the agreement to purchase; they flowed directly from the contract. The judge's factual findings were not unreasonable.