Neil Hickman recounts a property case that turned on a waylaid fax and offered lessons for practitioners



The case of Northstar v Brooks (2006) All ER (D) 128 (Jun), (2006) EWCA Civ 756, in which the Court of Appeal upheld a lengthy judgment of Judge John Toulmin (unreported, (2005) EWHC 1919(Ch)) without calling on the respondents, states no new principles of law, but it does hold some important lessons for the practitioner. It also offers an admirable example of a solicitor in a small country practice keeping his wits about him, and achieving an excellent result for his clients.



The story starts in 1985, when the Brooks family bought a bungalow on the outskirts of Birmingham. It stood on two acres of land, and it is not surprising that 3M Pension Trustees - Northstar's predecessor in title - was only persuaded to sell on the basis that there would be a 15-year option to repurchase if the development potential of the adjoining land could be realised.



In the autumn of 2000, the option was duly exercised. The Standard Conditions of Sale (3rd edition) applied; by condition 6.2, completion was to take place at the offices of the seller's solicitor.



The price, as assessed by a valuer, was far less than the Brooks family thought the property was worth. Generously, Northstar in effect offered the Brooks family one-third of the development value, but the parties could not agree on the terms of an enhanced contract. In August 2003, Northstar gave notice that it would enforce the original terms.



By December 2003, Northstar was anticipating that proceedings would be necessary. It instructed counsel to draft proceedings for specific performance, but also on 16 December served notice to complete, requiring completion within ten working days - by 2 January 2004.



This was misunderstood by the Brooks family as requiring them to complete on Boxing Day, leading to a colourful piece in the Birmingham Post on Christmas Eve under the headline 'Family faces Boxing Day eviction'.



Possibly influenced by the press interest, Northstar faxed the family's solicitors on 22 December, offering to extend the deadline for completion to 9 January 'to take account of the Christmas and New Year period'. The solicitors went on leave.



Although his office was not scheduled to reopen until 5 January, Paul Drew, the Brooks's solicitor, went into the office on 2 January and arranged for his clients to attend to sign the transfer, having given them firm advice, which they had reluctantly accepted, to be ready to move out that day. He e-mailed Northstar's solicitors, and telephoned them at about 3pm.



When his call was returned, he learned that the relevant fee-earners were not in the office. Eventually, he was telephoned at about 3.40pm. He was told of the fax proposing to defer completion. This was the first he had heard of it - and he was asked to agree to completion being deferred.



At this point, Mr Drew realised he had fortuitously been dealt a slam hand, and played it to perfection. He had the presence of mind to respond, neutrally, that he would have to take his clients' instructions. And, having taken those instructions, which were precisely as expected, he made a conscious decision not to telephone Northstar's solicitors.



Now, the service of the notice to complete also imposed an obligation on Northstar to be in a position to complete if called on to do so (see Quadrangle Developments v Jenner (1974) 1 All ER 729). Northstar's solicitors were not in funds, and by the time they spoke to Mr Drew, it was almost certainly too late for them to arrange to be placed in funds, to effect a telegraphic transfer of the purchase monies, and to attend Mr Drew's offices in Coventry to complete, before the close of business that day.



But when was the deadline? Did they have to complete by the end of normal office hours, or did they have until midnight? Judge Toulmin concluded that the deadline was '5.30pm or 6pm or perhaps a few minutes later'. Giving the judgment of the appeal court, Lord Justice Ward reserved his position on this, commenting that there was no expert conveyancing evidence on the matter but, with respect, questioned whether this is a question not of conveyancing practice but of the construction of the contract. Expert evidence would, on general principle, have been inadmissible (see Midland Bank v Hett, Stubbs & Kemp (1978) 3 All ER 571, 582).



Receiving no response from Mr Drew, Northstar's solicitors assumed their proposal had been accepted. But Mr Drew had no duty to communicate a response. He had a duty to act honestly and in good faith but, as graphically put by Lord Justice Ward, 'the overriding duty to the client was to do nothing, which alerted his opponent to her need... to arrange for completion that afternoon... Just as the statement "I will take instructions" is equivocal, so was the silence that followed'.



It is important to note the distinction between this case and Legione v Hateley (1982-1983) 152 CLR 406 where, asked about a proposed extension of time, a secretary said 'I think that'll be all right, but I'll have to get instructions'. Mr Justice Murphy and Chief Justice Gibbs in the High Court of Australia would have held that capable of creating an estoppel.



Northstar initially sought to argue that there was an agreement to vary the completion date; that foundered at an early stage for the want of writing (Law of Property (Miscellaneous Provisions) Act 1989) but would otherwise have offered an interesting modern parallel to Felthouse v Bindley (1862) 11 CBNS 869.



Could there be an estoppel instead? The appeal court held that there could not. Mr Drew had not said or done anything that could properly give rise to one. The dictum of Mr Justice Moore-Bick (as he then was) in Petromec v Petroleo Brasileiro (No2) (2004) EWHC 127, to the effect that knowingly creating or encouraging an existing assumption might have the same effect as a representation, did not avail Northstar.



Northstar had not itself been in a position to complete during working hours on 2 January. Its claim for specific performance accordingly failed.



In his judgment, Judge Toulmin graphically describes Ms Brooks's dealings with 3M's surveyor Mr Davis and, in particular, her insistence that she had promised him a crate of his favourite whisky if the property was secured. Mr Drew certainly deserved some Lagavulin for enabling them to hang on to it.



District Judge Neil Hickman sits at Milton Keynes County Court