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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Boyle & Ors v Hallstate Ltd & Anor [2002] EWHC 972 (Ch) (13 May 2002) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2002/972.html Cite as: [2002] EWHC 972 (Ch)

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IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Claim No. CC 2001/App/982 Royal Courts of Justice The Strand, WC2A 2LL
		13th May 2002

MR JUSTICE RIMER:

1. This is the claimants' appeal against the decision of His Honour Judge Cox given in the Lambeth County Court on 7th December 2001. The issue before the judge was whether a notice the defendants had served under section 17 of the Landlord and Tenant Act 1987 was valid. The judge held that it was, with the consequence that it had operated to determine the claimants' rights to acquire the freehold of the block of flats they occupied. On this appeal, the claimants have submitted that the judge was in error and that their right to acquire the freehold remains unimpaired.
2. Part I of the Landlord and Tenant Act 1987 ("the Act") confers on the qualifying tenants of blocks of flats a right of first refusal on disposals by their landlord of the latter's interest. Where a landlord is proposing to dispose of his interest, section 5 requires him to serve an offer notice on the qualifying tenants. If he fails to do so and sells his interest elsewhere, the qualifying tenants are entitled to require the new landlord to sell that interest to them on the same terms, including price, as he acquired it. Differences as to the terms of the purchase are, by section 13, resolved by the Leasehold Valuation Tribunal ("the LVT"). By section 19, the court can make an order compelling compliance with the duties imposed by Part I.
3. The building in question is a block of five flats at 36 Tavistock Place, London WC1 ("the property"). The claimants are Patrick Boyle, Lesley Hamilton, Helen Harris and Charles Mitchell. They have long leases of four of the flats. The fifth flat on the second floor is, or was, occupied by a Rent Act tenant.
4. On 11th July 1995, Barclays Bank Plc, as mortgagee, sold various properties to the first defendant, Hallstate Limited ("Hallstate") for a price of £500,000. They included the freehold reversion in the property. No offer notice had previously been served on the claimants under Part I of the Act and so Hallstate was vulnerable to the service on it of a purchase notice by the claimants for the acquisition of the freehold.
5. The claimants duly served such a notice on Hallstate on 29th February 1996. The notice identified the claimants as "the nominated persons" for the purposes of Part I. It is not disputed that its effect was to compel Hallstate to transfer the freehold to the claimants at the price it had paid Barclays for it. There was, however, a difficulty in identifying that price because the Barclays sale did not apportion the £500,000 between the various properties bought by Hallstate. Agreement as to the price attributable to the property could not be reached and so, on 15th May 1996, the claimants applied to the LVT to determine it. Their application showed that, at that stage, the claimants regarded £24,000 as the appropriate figure, whereas Hallstate's figure was £40,000.
6. Some months later, and whilst that application was still pending, there was an important exchange of letters between the claimants' former solicitors, White & Bowker, and Hallstate's solicitors, Clifford Watts Compton. On 28th October 1996, the claimants' solicitors wrote making "an offer of £30,000 subject to contract for the purchase of the freehold interest, subject to the long leases and the statutory tenancy". On 7th November 1996, Hallstate's solicitors replied confirming "that our client is prepared to sell the freehold for £30,000 subject to contract on the basis of a quick completion date and all outstanding service charges etc must be paid on completion. Please confirm that you are in funds or will be shortly to exchange and complete whereupon we shall submit a draft contract".
7. That exchange of letters reflected three important matters. First, but subject to the third point, that the parties were agreed as to price (the matter which was the subject of the application to the LVT). Second, that they were proposing to replace their statutory rights and obligations under Part I of the Act with the like rights and obligations which would be created by a private contract for a purchase and sale of the freehold. Thirdly, and most importantly for present purposes, that their agreement on the terms reflected in the exchange was described on both sides as being "subject to contract".
8. The effect of the third point as a matter of law is too well known to need an extended explanation. It was that, until a formal contract was executed, neither side was legally bound by the terms reflected in the exchange and each was free to walk away from them or to seek to renegotiate them. In fact, even if the letters had not included the legend "subject to contract", their exchange would still have created no contract since they would not have satisfied the requirements of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. But old habits die hard and by the express inclusion of the magic phrase, the parties' respective solicitors were making it unambiguously clear that they did not intend the exchange of letters to have contractual effect.
9. In short, the exchange did not create a binding agreement as to anything, including the price of £30,000. I make the latter point because it has been suggested in argument (and I understand the judge to have decided) that it at least amounted to a binding agreement as to price, even if to nothing else. But I agree with Mr Vivian Chapman, who appears for the claimants, that that view is incorrect. What was being offered by the claimants' solicitors, and accepted by Hallstate's solicitors, was the terms for an open contract for the purchase and sale of the freehold. The price of £30,000 was simply part of that offer. The exchange could not have been binding as to price and non-binding as to the rest. If, for example, the next day the claimants had written to Hallstate saying that they had changed their mind and did not wish to proceed with the proposals reflected in the two letters, they would have been fully entitled to do so. I would regard as wrong any riposte by Hallstate to the effect that the exchange of letters had at least committed the claimants to a £30,000 figure.
10. Steps of a conventional nature were then taken towards agreeing a form of contract. The parties got close to an exchange of contracts but none took place. On 21st January 1997, the claimants' solicitors warned that unless contracts were exchanged by the end of the week, their clients would "submit an application to the court to secure your clients' compliance with the 1987 Act".
11. On 4th February 1997, Hallstate's solicitors gave the claimants an unpleasant surprise. They informed them that Hallstate had granted a long lease of the second floor flat to an unnamed third party for a premium of £23,000, subject to the current tenancy, and that it would now be prepared to sell the freehold to the claimants for a mere £7,000.
12. The claimants' response was in their solicitors' letter of 4th March 1997. They said that, as the grant of the reversionary lease was made at a time when Hallstate was under an enforceable obligation imposed by the Act to transfer the freehold to the claimants, the lease was not binding on the claimants and that Hallstate's obligations under the purchase notice of 29th February 1996 remained unchanged. They concluded by saying:-

"Under the circumstances, we shall be applying to the court for a declaration in the above terms, and an order for specific performance of your client's obligations. Please confirm within the next 7 days that you have instructions to accept service of proceedings, and provide us with details of the purported lessee and a copy of the purported lease."

13. The information requested in the last sentence was not provided. The claimants started proceedings in the Lambeth County Court in April 1997. As they did not know the identity of the third party, they joined only Hallstate as defendant, but when the claimants eventually discovered that it was Brexton Properties Limited ("Brexton"), they added Brexton as a defendant as well. The summons described the claim as being for "specific performance and reparation/possession".
14. In light of the claim for "specific performance", I comment that both counsel are agreed that Part I of the Act does not provide that the legal effect of the service on Hallstate of the purchase notice was to result in the creation of a statutory contract between the parties for the purchase and sale of the freehold reversion, although it can perhaps be said that, to the extent that the Act imposes obligations on the parties directed at a conveyance of a relevant property interest in exchange for a price, its effect is at least analogous to the creation of such a contract. In particular, however, Part I does not suggest that the obligations it imposes can be enforced by an order for specific performance. Its enforcement machinery is contained in section 19, which is as follows:-

"19. Enforcement of obligations under Part I.

"(1) The court may, on the application of any person interested, make an order requiring any person who has made a default in complying with any duty imposed on him by any provision of this Part to make good the default within such time as is specified in the order.

"(2) An application shall not be made under subsection (1) unless -

"(a) a notice has been previously served on the person in question requiring him to make good the default, and

"(b) more than 14 days have elapsed since the date of service of that notice without his having done so.

"(3) The restriction imposed by section 1(1) may be enforced by an injunction granted by the court."

15. Mr Vivian Chapman was not acting for the claimants at that stage. He made a faint suggestion that I should regard the letter of 4th March 1997 as serving as a notice of the nature required by section 19(2)(a), but I regard it as clear that it was not; and nor did the claimants precede the commencement of their action with the service of anything else which might be regarded as qualifying as such a notice. The inference I draw from their letter of 4th March 1997 is that the claimants' solicitors had overlooked the provisions of section 19. First, if they had had it in mind and regarded themselves as claiming relief under it, they would have referred to claiming an injunction rather than specific performance: see section 19(3). Secondly, before issuing proceedings, they would have taken care to serve an unambiguous demand on Hallstate, requiring it to make good what they regarded as its default. That is because the service of and non-compliance with such a demand is a condition of a successful application under section 19. Instead, they issued their proceedings without doing either of those things.
16. Following the issue of proceedings, there was some protracted interlocutory activity. In the course of the long run-up to trial, the pleadings were amended more than once, and it is important next to look briefly at their final form.
17. The re-amended particulars of claim asserted, in paragraphs 1 and 2, the exercise by the claimants, by the service of the purchase notice, of their right to acquire the freehold at a price to be determined in default of agreement by the LVT. Paragraph 3 pleaded the making of the application to the LVT in May 1996 in order for the price to be fixed. Paragraph 4 pleaded that the purchase notice had been protected by the registration of the caution. Paragraphs 5 and 6 read as follows:

'5. By exchange of letters dated 28th October 1996 from the Claimants' solicitors to [Hallstate's] solicitors and 7th November 1996 from [Hallstate's solicitors] to the Claimants' solicitors, the said application [to the LVT] was compromised by agreement between the parties thereto on terms that the sum of £30,000 would be paid by the Claimants to [Hallstate] by way of consideration of the disposal ("the Compromise Agreement").

'6. In the premises [Hallstate] was at all material times after 29th February 1996 under an enforceable agreement to dispose of its interest in the property to the Claimants for the consideration of £30,000, by reason whereof the Claimants were at all material times entitled in Equity to the freehold in the property as constituted on 29th February 1996.'

18. The particulars then turned to an assertion that the reversionary lease in favour of Brexton did not bind the claimants. They also pleaded a second purchase notice, which had been purportedly served on Brexton, although nothing has ever turned on that. By the prayer, they claimed "specific performance of [Hallstate's] obligations under the … Purchase Notice dated 29th February 1996 to dispose of its interest in [the property] to the Claimants". They also sought a declaration that the reversionary lease was not binding on them.
19. The defence of Hallstate and Brexton was served in its final form at the trial itself, which was on 31st May 2000. It was largely directed to whether or not the reversionary lease bound the claimants. Paragraph 3 is of relevance for present purposes, and reads as follows:-

"3. As to paragraphs 5 and 6 of the Re-amended Particulars of Claim: (i) it is admitted that an agreement was reached subject to contract between the Claimants' solicitors and [Hallstate's] solicitors. It is denied that this gave rise to an enforceable agreement at law or gave the Claimants any equitable interest in the freehold title of the property.

"(ii) It is admitted that the Claimants' application to [the LVT] for a determination of the consideration to be paid if the freehold title were to be conveyed by [Hallstate] to the Claimants was compromised by an agreement that the sum of £30,000 would be paid in the event of such a conveyance and provided that the leases at the time registered against the freehold title remained unaltered."

20. The admission in paragraph 3(i) was correctly made. The denial in the same paragraph, that the exchange of letters gave rise to an enforceable agreement or gave the claimants any equitable interest, was equally correct. I interpret paragraph 3(ii) to mean that which Mr Nicholas Chapman, its author and counsel before me for the defendants, submitted it meant, namely, that if the claimants were right in their argument that the reversionary lease was not binding on them, then the defendants accepted that the reference to the LVT for the determination of the price of the freehold had been compromised by an agreement that it should be £30,000. I did not understand Mr Vivian Chapman to suggest that paragraph 3(ii) meant anything different. In short, on the footing that the claimants were right about the reversionary lease not binding them, the defendants were admitting paragraph 5 of the re-amended particulars of claim, namely, that the parties had agreed a price of £30,000 for the freehold and had so compromised the application to the LVT.
21. The trial was before Judge Cox. The skeleton argument for the claimants similarly asserted that the reference to the LVT had been compromised by the later agreement on price at £30,000. Mr Nicholas Chapman, who also appeared then for the defendants, did not submit or suggest anything different. In fact, the argument before the judge at the trial was wholly concerned with the question of whether or not the reversionary lease was binding on the claimants.
22. The judge gave his reserved judgment on 21st June 2000. He gave a brief recital of the background. He referred to the reference to the LVT and said that "The value was in due course agreed at £30,000". He referred to the fact that the claim before him included a claim "to enforce what the Claimants then asserted was a concluded agreement to sell the premises to them" and said that "That issue has not figured large in the proceedings before me". He then dealt with the issue which had been argued before him, namely, the effect of the reversionary lease. I need not explain his reasoning, but his conclusion was that the lease did not bind the claimants. The result was that the defendants lost the argument on that point.
23. After judgment, there followed some discussion about the form of the order. There are two slightly different accounts in evidence, but I understood Mr Vivian Chapman to be content for me to be guided by the account reflected in the brief contemporaneous note made by Mr Nicholas Chapman's instructing solicitors. They reflect that counsel for the claimants asked the judge for an order for specific performance, to which the judge responded that that claim had not been argued. Counsel then suggested that an order under section 19 of the Act could and should be made, to which the judge replied that that amounted to the same thing. Mr Nicholas Chapman then said that the defendants accepted that there would have to be a conveyance of the property to the claimants, but submitted that it was premature to ask for an order under section 19. What underlay that was that it could not be said that the defendants had defaulted in complying with their Part I obligations so long as they had been legitimately arguing about the effect and impact of the reversionary lease. Mr Chapman may also have made the point about no notice having been served under section 19(2)(a), although it is not clear whether he did.
24. The outcome was that the judge made an order, dated 21st June 2000, that the reversionary lease was an encumbrance for the purposes of section 12 of the Act and that the claimants "shall take the freehold of the property not subject to [that] lease". He further ordered that the "Claimants and Defendants do have liberty to apply including for enforcement purposes under section 19" of the Act. He ordered Hallstate and Brexton to pay the claimants' costs of the action. The effect of the liberty to apply is important and I will have to return to it.
25. What then happened is that both sides' solicitors worked diligently towards a transfer of the freehold to the claimants in exchange for £30,000, but it seems to have taken longer than it might have done. Apparently, various questions arose as to service charges and the like. Suffice it to say that completion of the acquisition had still not taken place by September.
26. On 11th September 2000, the defendants' solicitors delivered another unpleasant surprise to the claimants. They served on them a notice under section 17(4) of the 1987 Act purporting to terminate the claimants' rights to acquire the freehold. Section 17 provides, so far as material, as follows (I interpose that this is the version of the legislation which both counsel are agreed is the one applicable to the present case):-

"(1) If, at any time after a notice has been served under section 11(1) or 12(1), the premises affected by the original disposal cease to be premises to which this Part applies, the new landlord may serve a notice on the qualifying tenants of the constituent flats stating -

"(a) …

"(b) that any notice served on him under section 11(1) or 12(1), and anything done in pursuance of it, is to be treated as not having been served or done …

"(3) Where a period of three months beginning with the date of service of a purchase notice on the new landlord has expired -

"(a) without any binding contract having been entered into between the new landlord and the nominated person, and

"(b) without there having been made any application in connection with the purchase notice to the court or to a rent assessment committee under section 13,

"the new landlord may serve on the nominated person a notice containing such a statement as is mentioned in subsection 1(b) above.

"(4) Where -

"(a) any such application as it mentioned in paragraph (b) of subsection (3) was made within the period of three months referred to in that subsection, but

"(b) a period of two months beginning with the date of the determination of that application has expired, and

"(c) no binding contract has been entered into between the new landlord and the nominated person, and

"(d) no other such application as is mentioned in subsection (3)(b) is pending,

"the new landlord may serve on the nominated person a notice containing such a statement as is mentioned in subsection (1)(b).

"(5) Where the new landlord serves a notice in accordance with subsection (1), (3) or (4), this Part shall cease to have effect in relation to him in connection with the original disposal."

(I also comment that the role of the rent assessment committee referred to in section 17(3) was of course taken over by the LVT.)

27. The defendants' position thereupon became, and remains, that their notice terminated the claimants' rights to acquire the freehold. The claimants did not agree, and, after a leisurely delay, they served a notice on the defendants on 23rd May 2001, requiring the transfer to them of the freehold for £30,000. That notice was expressly given under section 19(2) of the Act.
28. Predictably, the defendants did not comply with that notice and so, on some uncertain date, the claimants issued an application notice under the liberty to apply contained in Judge Cox's order of 21st June 2000. The substantive relief they claimed by that application was an order under section 19 compelling the defendants to transfer the property to them for £30,000. But they of course recognised that a hurdle standing in the way of success on that was the defendants' assertion that the section 17 notice had brought their rights to an end and that it was necessary first to persuade the court that the notice was invalid. The claimants served with their application notice a draft of the order they wanted the court to make. Paragraph 1 asked for an issue to be tried as to the validity of the section 17 notice. Paragraph 2 asked for permission to amend the re-amended particulars of claim yet again. The principal proposed amendment was to add the words "subject to contract" after the word "agreement" in paragraph 5. The claimants also asked for the relief requested in paragraph 4 of the summons which had commenced the action, that is, for "specific performance and reparation/possession". They further asked for specific performance, as claimed in paragraph 1 of the prayer to the re-amended particulars of claim.
29. The matter came before Judge Cox on 7th December 2001. He had made the order of 21st June 2000. Mr Vivian Chapman appeared for the claimants and Mr Nicholas Chapman for the defendants. The only matter argued was the question as to the validity of the section 17 notice. The judge held it was valid.
30. For the notice to have been valid, four conditions had to be satisfied at the date of its service. The first, referred to in section 17(4)(a) of the Act is that, within three months of the purchase notice, an application of the nature mentioned in section 17(3)(b) was made either to the court or the LVT. That condition was satisfied, since the purchase notice was dated 29th February 1996 and the claimants had applied to the LVT on 15th May 1996 for the determination of the price. The third condition is that referred to in section 17(4)(c), namely, that no binding contract had been entered into between Hallstate and the claimants and it is agreed that it had not.
31. The issue between the parties was as to the second and fourth conditions. Mr Vivian Chapman submitted to the judge, and also on this appeal, that neither was satisfied, with the result that the section 17 notice was ineffective. Those conditions are the ones referred to in section 17(4)(b) and (d). I will take each in turn and will refer to them as the second and fourth conditions respectively.

The second condition, section 17(4)(b).

32. Satisfaction of this condition required that "a period of two months, beginning with the date of the determination of [the application to the LVT] has expired". Mr Vivian Chapman's point is a short one. The application was made to the LVT in May 1996, and the purpose of the application was to have the price determined. But he submitted that the application never has been determined and that the evidence suggests that it still remains on the LVT's books. I understand him to accept, however, that this last point would not be sufficient for his purposes if in the meantime there had been a binding agreement as to price between the parties. He accepts that, in such event, the reference to the LVT would have been finally compromised, that it could therefore be regarded as having been determined for the purposes of section 17(4)(b) and that it would not avail the claimants if the reference had not been formally disposed of by the LVT. He says, however, that there has never been any such agreement because the only agreement as to price was the "subject to contract" agreement constituted by the exchange of letters in 1996, which, he says, was and is no agreement at all. Therefore, he says, the reference to the LVT cannot be regarded as having been determined by a binding compromise. Either side could at any stage have resiled from the terms of that exchange.
33. At first blush, the point might appear to have its attractions, but one difficulty in its path is that it is precisely the reverse of what the claimants had asserted in paragraph 5 of their re-amended particulars of claim. That was that the reference to the LVT had been compromised by an agreement on a price of £30,000, an allegation which Mr Chapman accepted was inconsistent with the point he wanted to make to Judge Cox in December 2001 in support of his argument on the second condition. The proposed amendment of paragraph 5 of the particulars was, by the addition of the words "subject to contract", therefore intended to show that the asserted agreement was not in fact an agreement at all. In fact, that amendment would probably not have done the work intended of it, since it would still have remained the claimants' pleaded case that the reference to the LVT had been the subject of a compromise, an assertion which was still inconsistent with the stance the claimants now wished to adopt.
34. Mr Vivian Chapman sought permission from the judge to make that amendment, but the judge refused to entertain the application, since he considered that his jurisdiction in the case had finally been determined on 21st June 2000 and that he had no power to permit any amendment. I will come to his reasons for that view when dealing with the point arising under the fourth condition, but I should say at this stage that, with respect, I consider that the judge was in error in concluding that he had no jurisdiction to permit a further amendment to the particulars of claim.
35. Having refused to entertain the amendment application, the judge then gave his reasons why he regarded the second condition as having been satisfied. I should say that the only note I have of his reasons is one made of it by Mr Vivian Chapman. The relevant part reads:-

'The parties were not in agreement as to the price to be paid. Under section 13 that matter can be referred to the Leasehold Valuation Tribunal. It was referred. It is most important to look at the application to the Leasehold Valuation Tribunal. It states clearly that the only issued to be referred to that tribunal was the question of the price to be paid for the freehold. It went before the Leasehold Valuation Tribunal. The decision of that tribunal was never made because the parties came to an agreement as to the price. The agreement was £30,000. The Defendants say by reason of that there is no question but that [the] Leasehold Valuation Tribunal proceedings were concluded when the parties reached an agreement. Counsel for the Claimants says that that is not the case. He says that, because the agreement was "subject to contract", it cannot be said that there was a concluded agreement. On his own pleadings [there] has been pleaded a concluded agreement. By an amendment allowed on the day of the hearing the Defence was amended to admit that agreement. Leaving aside the point that the Claimants may be in difficulty with their pleadings it seems to me another matter whether it can be said that proceedings before the Leasehold Valuation Tribunal were concluded. It is perfectly true that the agreement to purchase the property may have been "subject to contract". Until contracts are exchanged there is no agreement in being. It was not an agreement to purchase property which was subject to the application to the Leasehold Valuation Tribunal. It was the fixing of a value to the freehold interest in the property. That was fixed by the agreement of the parties. Once that figure of £30,000 had been agreed there is nothing further the Leasehold Valuation Tribunal had to do.'

36. The judge then said, in effect, that this meant that the second condition was also satisfied at the time of the section 17 notice. I interpret his reasoning to be that, although the £30,000 figure was only agreed in the course of a "subject to contract" exchange, the exchange reflected that there was at least a binding agreement as to price sufficient to amount to a compromise of the LVT application. For reasons I briefly gave earlier, I respectfully disagree that that is a correct analysis of the effect of the relevant correspondence.
37. The judge granted the claimants permission to appeal on whether the order of 21st June 2000 had finally disposed of the action, a point going directly to the satisfaction or otherwise of the fourth condition. He did not grant them permission to appeal in relation to their point about the satisfaction or otherwise of the second condition or as to their application to amend the particulars. Accordingly, as regards that latter aspect of the matters before me, Mr Vivian Chapman also sought permission to appeal on it from me. I propose to give permission to appeal, since I consider that the judge erred in two respects in connection with the issue about the second condition: first in concluding that he had no jurisdiction to permit the claimants to amend the particulars of claim; and, secondly, in his reasons for holding the second condition to have been satisfied.
38. Having done so, I consider that the main question for me on the substantive appeal in relation to the second condition is whether the judge ought to have given permission for the claimants to amend their particulars in the way they sought and whether, if he should have done so, the claimants were right in their argument that the second condition had never been satisfied.
39. I have already indicated that I regard the particular amendment which the claimants sought to make before the judge as being inadequate for their needs. Mr Vivian Chapman recognised that in the course of the argument and he produced a revised version. I will not quote from it, but its essence is to make, now rather more clearly, the point that the exchange of letters in October and November 1996 was expressed to be "subject to contract" so that it did not create any binding agreement. The effect of the proposed amendment is to withdraw any suggestion that the reference to the LVT had been compromised by an agreement as to the price for the freehold.
40. I would refuse permission to the claimants to make that amendment. There is no doubt that the relevant exchange of correspondence was "subject to contract", and I have set out what its effect was in law. Since either side could the very next day have withdrawn from the terms reflected in that exchange, I would not regard it as one which had the effect of binding the parties to anything, including any compromise of the then pending reference to the LVT.
41. But that is not the end of the matter. Ordinarily, when parties engage in negotiations on a basis which is stated at the outset as being "subject to contract", that will impliedly govern all their future negotiations without any need continually to repeat that the matter remains "subject to contract". But the decision of the Court of Appeal in Cohen v Nessdale Limited [1982] 2 AER 97 also shows that in certain, no doubt rare, situations there may be circumstances falling short of the execution of a formal contract in which it is apparent that the parties have at some point expressly agreed that the matter has moved from a "subject to contract" negotiation to a binding agreement; and, more importantly, even if they have made no express agreement to that effect, that it is necessarily implicit that that is what they have agreed: see in particular the judgment of Lord Justice Cumming-Bruce, at pages 103F to 105G.
42. In my judgment, whilst there is no basis for any conclusion that the parties, either expressly or impliedly, agreed to bind themselves to the terms of the exchange of correspondence, it is at least necessarily implicit that they reached a subsequent binding agreement that the price of £30,000 was binding on them and that the consequence of the reference to the LVT was impliedly compromised and determined.
43. The claimants' own case in the action was that it was entitled to specific performance of Hallstate's obligations under Part I. It could only make out such a case if all the terms of those obligations had been finally agreed or determined. One of those terms was the price. On paper, there was, at most, a subject to contract agreement as to price, which was no agreement. But, despite this, the claimants in terms asserted in their particulars that there was a binding agreement as to price which had resulted in the compromise of the LVT reference. I regard it as at least a little surprising that the claimants' solicitors and counsel felt able to advance that assertion. But it paid off because Hallstate's ultimate pleaded response was, in effect, that it agreed that the LVT reference had been compromised by the agreement as to price. There was, therefore, an assertion and an admission on the pleadings of a binding compromise, and that was also the stance which counsel for the claimants had adopted in his skeleton argument at the trial. In his judgment of 21st June 2000, Judge Cox also described the price as having been agreed and, after he had delivered judgment, counsel for the claimants asked for an order for specific performance, an application which, again, could only be advanced on the basis that there was a binding agreement as to price. In his response to that, Mr Nicholas Chapman made no suggestion that Hallstate disagreed with that; nor could he, in view of Hallstate's pleaded defence.
44. In my view, the only possible inference from all that is that it is necessarily implicit that, at the latest by 21st June 2000, both parties became and were agreed that a price of £30,000 had been finally settled upon, with the result that the claimants' application to the LVT had been the subject of a binding compromise. That means that by the time of the service of the section 17 notice, the second condition had been satisfied.
45. Consistently with their stance that the price had been finally agreed, the claimants then served their section 19 notice on 23rd May 2001. That, again, asked for completion of the purchase -- a demand which once more the claimants could only make on the basis that the price had been agreed. The claimants then followed that notice up with their application to Judge Cox for an order compelling Hallstate to perform its obligations under Part I. Again, unless the price had been finally agreed, that application was bound to fail.
46. However, the purpose of the proposed amendment for which the claimants now ask is to deny that there has ever been any final agreement as to price. Its effect, if allowed, will be to torpedo the claimants' claim for the substantive relief which they are asking for under section 19 because, unless and until the price has been determined, it cannot be said that Hallstate has defaulted in its obligation to transfer the freehold. Quite apart from the curiosity of the legal position into which the claimants are attempting to steer themselves by their amendment, their stance is also an absurd one from a practical point of view. That is because there has never been a murmur from either side that in fact the £30,000 figure is not an agreed one; and nor do the claimants really want to assert otherwise. They know perfectly well that the price has been agreed. The only point of the amendment is, so they hope, that it will enable them to argue that the section 17 notice is invalid. It is just an unfortunate embarrassment for them that, if it is allowed, it will put them out of court on their claim under section 19.
47. In all these circumstances, I consider that it is simply too late for the claimants to take the point they now want to take. The question of price was one of the matters before Judge Cox at the original trial, and it was relevant in connection with the claimants' claim for specific performance. There was, of course, no argument about it because the claimants' case as to price was admitted on the pleadings. If it had not been admitted, there would have been some argument about it and no doubt the judge would have had to rule on it.
48. In my view, the circumstances I have outlined raise an estoppel against the claimants, preventing them from re-opening the point. It may be that Judge Cox still had, and that this court on appeal still has, a discretion to allow an amendment directed to re-opening the matter, but in the circumstances of this case I would regard the claimants' bid to do so as amounting to an abuse of the process of the court. The estoppel flows from the fact that the conduct of both sides in the action reflected that they were agreed on the question of price. There is no question of there having been any mistake in this connection on the part of either side, and the need for there to be an end to litigation requires, in my view, the conclusion that this particular issue should be regarded as having been finally disposed of by 21st June 2000. The result is that, although I do not agree with the judge's reasons, I consider that he came to the correct conclusion that the second condition was also satisfied.

The fourth condition, section 17(4)(d).

49. This requires that, at the time of the section 17 notice, "no other such application as is mentioned in subsection (3)(b) is pending". Mr Vivian Chapman's point is that this condition was not satisfied because the proceedings in the county court were still pending at the date of the service of the notice. He relies on the fact that Judge Cox had given the parties "liberty to apply including for enforcement purposes under section 19" of the Act.
50. I regard this argument as having its difficulties as well. The first question, about which there was some discussion in argument, was as to the true nature of the claim for "specific performance" in the particulars of claim. The debate was as to whether it was in fact a claim for relief in the nature of specific performance, that is to say, for equitable relief compelling the performance of a contract, or whether it was a claim for relief under section 19.
51. For the reasons I have given, I doubt if anyone on the claimants' side had section 19 in mind at the time they started the action. The claim was stated to be one for specific performance, not for an injunction, and no pre-action notice under section 19(2)(a) had been given. There is, in my view, also at least a question as to whether it would be open to a court to make an order for specific performance of the mutual obligations arising in consequence of the service of a purchase notice under Part I, or whether the only jurisdiction the court has to enforce those obligations is one arising under section 19.
52. However, I find it unnecessary to express any final view on that. The fact of the matter is that, after the judge had given judgment on 21st June 2000, he was asked to make orders either for specific performance or under section 19. He declined to make any such order, and nor did he adjourn the claim for such an order. What he did do, however, was to give both sides liberty to apply for a section 19 order. He plainly expected that, now that he had resolved the debate about the reversionary lease which had been granted to Brexton, the matter would be likely to proceed smoothly to completion. But, in case there should be any more difficulties, he was expressly permitting either side to make an application in the action for the purpose of compelling the enforcement of the other's obligations. He must necessarily have had in mind that any such application would be founded on facts arising subsequently to his judgment. In particular (although I shall have to return to this point), I would be inclined to infer that he would probably have had it in mind that any such application would have to be preceded with a notice of default under section 19(2)(a). Thus the application would involve raising wholly new matters, although neither counsel suggested to me that, under the modern rules of pleading, it would not be open to the court to permit this. In this connection, I was referred to the decision of the Court of Appeal in Hendry v Chartsearch Limited [1998] CLC 1388.
53. At the date of the service of the section 17 notice, however, no application had been made by either side under the liberty to apply and so no application under that liberty was pending; and all the matters which had been before the judge at the trial on 31st May 2000 had been otherwise finally disposed of by the other parts of his order of 21st June 2000. The inclusion of the more general liberty to apply which he included in his order did not make that which was otherwise a final order any less a final order.
54. In these circumstances, I consider that, at the date of the section 17 notice, the fourth condition was satisfied as well. That is because it is not possible to identify any claim or application which at that point was still pending in the county court action. Of course, the claimants did later make an application under the liberty to apply, the one which came before Judge Cox on 7th December, and that did result in the creation of a pending application in the action. But that was months after the service of the section 17 notice and it could not retrospectively operate to invalidate it. That application in due course came before the same judge who had given the liberty to make it, and I do not therefore wholly follow on what basis he concluded, as he did, that he no longer had any jurisdiction in the case at all. His reasoning was as follows:-

"The fact of the matter is that an application under Section 19 had not been made. The condition precedent to such an application, i.e., the service of the Notice under Section 19, had not been accomplished when the proceedings came before me. The position before me in June 2000 was that there was no Section 19 application. The whole question of Section 19 could not arise. For that reason the claim for specific performance was misconceived. On that basis I consider that the position was finally concluded by the judgment I gave on the only issue before me in May and June 2000. I have no power to grant permission to re-re-amend the Particulars of Claim even if I were disposed to grant permission."

55. His point therefore seems to be that the claim for specific performance was either misconceived anyway, or else was a misdescribed claim for a section 19 order which could not succeed for want of the service of a pre-action notice. He appears to have concluded that it followed that it was simply not open to him, on 21st June, to have made an order either for specific performance or under section 19; and nor of course did he. He appears also to have regarded the conferring by him of an express liberty to apply for an order under section 19 as one which he had no jurisdiction to give. Presumably this was because he regarded the service of a pre-action notice under section 19(2)(a) as essential to a successful application under section 19.
56. I have, with respect, some difficulty with that approach. The fact remains that the judge had given a liberty to either side to apply for an enforcement order under section 19; and one might be forgiven for thinking that that was intended to mean what it said. I did not understand even Mr Nicholas Chapman to suggest that on such an application it would not be open to the applicant to rely on new facts arising since the judgment, including the service of a section 19(2)(a) notice.
57. The claimants in due course made such an application, and it was before the judge on 7th December 2001. Whether the application was one which was capable of succeeding was of course likely to be a matter of debate. But in my view it must at least have been an application in the action sufficient to entitle the claimants to apply to amend their pleadings. With respect, I consider that the judge was wrong not so to regard it. However, for reasons I have given, which again differ from those he gave, I anyway take the view that the defendants are also right in their contention that at the date of the service of the section 17 notice the fourth condition was satisfied as well. This means that, in agreement with the judge's overall conclusion, I too consider that the section 17 notice was a valid one and I therefore dismiss the claimants' appeal.
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