Injunctions can be used to restrain property sales

The High Court was faced with a question regarding a potential injunction to restrain sale based on an oral option to purchase. 

Background:

Mr. Roger Matthews is a second cousin of Mr. Frank Matthews and has had a longstanding relationship in connection with their farming interests. Frank, an elderly individual, has been declared to lack capacity. The Court of Protection appointed Ms. Minihane as his permanent deputy in March 2024 and Roger was Frank’s former health and welfare attorney. 

While Frank had capacity, he made it very clear he wished to be cared for in his own home and not in a care home. His monthly care costs at home are around £25,000 and he has a life expectancy of between 2 and 5 years. Although he is property rich, he is cash-poor and has a debt of over £1.2m which is owed to HMRC. 

Ms. Minihane asserts that she requires £2.8 million to cover Frank’s ongoing care and settle his debts. In November 2023, Ms. Minihane instructed Strutt & Parker to value the land owned by Frank and to advise her on which areas of land should be sold to generate the necessary funds to meet Frank's liabilities.

Three lots of farmland were subsequently identified. Ms. Minihane determined it was in the best interests of Frank to sell the properties and instructed Strutt & Parker to market the properties. She has been advised by Strutt & Parker to accept a cash offer of £5.8m for the properties with simultaneous exchange and completion in 6 weeks following acceptance of the offer.

Roger claims that Frank provided him with an oral option to purchase the properties and tried to restrain the sale of the properties. In January 2024, he offered to purchase the house for £3.45m. 

Decision: 

The Court denied Roger’s application for an injunction based on the analysis of American Cyanamid principles. Granting an injunction would likely have resulted in severe and irreparable damage to Frank, as he needed access to funds for his care. The balance of risk therefore favoured Frank to avoid forcing him into a care home. 

Additionally, the option on which Roger relied would entitle him to purchase the properties for £5.8m but not for £3.45m. The £3.45 million does not represent the ‘full market value’ which should be assessed at or very near to the date of sale which, in this case, would be £5.8m based on actual offers received. 

Implications:

This decision demonstrates the need for the courts to balance the interests of the parties, here upholding an oral option to purchase or ensuring the person can pay for their necessary care. It also offers a good reminder of the notion of ‘full market value’ and the time at which such value should be assessed and, moreover, should be based on actual offers received. 

It also clarifies that you cannot rely on a value that does not represent the real market value from months before the potential purchase. Such an injunction could only be successful if there were a good reason and the values matched.