Nationwide Property Developments Ltd v Oseka Egbunike

Option agreement – option granted as part of an agreement for the respondent to sell the applicant’s property at a reserve price whilst providing an immediate substantial advance – advance not forthcoming – monetary figures not inserted - whether or not the option is still on foot. Jayasinghe v Liyanage [2010] 1 WLR 2016 ; The Chief Land Registrar v Silkstone [2012] 1 WLR 400 . Introduction

1. At the time of his death, on 08 December 2018, Mr William East was the registered proprietor of 6 Acland Road, London NW2 5AU (“the house”).

2. The house is registered at Land Registry under two different titles. First, a long leasehold title MX276355, first registered on 18 September 1953 The respondent’s skeleton arguments incorrectly suggested that this is the title of 6 Ber t ie Road, London NW10 2LH , which property forms no part of these proceedings . . Secondly, a freehold title MX375938, which was first registered on 06 January 1958.

3. I mention, in passing, that one would have thought that the former title should now be closed because the long lease would have merged with the freehold when coming into common ownership with the freehold title, and also because the long lease has now expired by effluxion of time. References to the house below are to both titles.

4. The respondent, Mr Egbunike, is the sole executor and beneficiary of the estate of Mr East under a short will dated 26 October 2012, leaving all of Mr East’s estate to the respondent. The respondent eventually obtained a grant of probate to Mr East’s estate on 19 December 2020, some three years after the latter died. The name of the proprietor of the house has not yet been altered on either title at Land Registry.

5. The applicant, Nationwide Property Developments Ltd, is a business which advances money to an owner of a property who wishes to sell, but is in need of a capital sum prior to the sale taking place (“the client”). The applicant has two different types of arrangement. The contract arrangement

6. One arrangement is that the applicant buys a property from the client at an agreed reserve, and then gives the client a cash advance of part of the reserve (for example to pay off the debts or to enable the client to obtain a grant of probate to enable the property to be sold by the client to the applicant). When the applicant has in turn sold the property to a third party buyer, the client returns the advance to the applicant. The applicant then pays the agreed reserve to the client, and keeps any amount paid over the reserve as its profit. The option arrangement

7. Another arrangement is one where the applicant appoints a connected company, The Online National Residential Estate Agency Ltd (“National Residential”), as the client’s marketing agent to sell the property on the client’s behalf.

8. A central feature of this arrangement is the grant by the client to the applicant of a £1 call option enabling the applicant to purchase the property from the client at the agreed reserve price. This option will be exercised once a buyer from the client (arranged by National Residential) has agreed to purchase the property, thereby enabling the applicant to have title to complete the sale to the buyer.

9. Again, the applicant gives the client a cash advance in advance of completion. In his oral evidence Mr Coughlin said that typically he would use the deposit paid by the third party buyer to make the advance to the client. The applicant, having exercised the option, then sells the property to the third party buyer at a higher price than the agreed reserve price, the difference being the applicant’s profit.

10. An option is an equitable interest in land, capable of being protected on the register by a unilateral notice and/or a restriction. The parties expressly agree, as part of the option agreement, that the option shall be protected by the entry of a restriction on the title of the property. However, as just stated, the option can also be protected by a unilateral notice. The respondent’s needs

11. It is common ground that when Mr East died the respondent did not have enough money to be able to obtain a grant of probate. He had first to pay HMRC £37,000, a sum he did not have. He also urgently required £20,000 for other purposes. This made a total of £57,000.

12. It is also common ground that the respondent got in touch with the applicant to try and obtain such an advance. This was through an agent, Mr Raj Sinclar, who was paid an introduction fee by the applicant. It is clear from an email sent on 12 September 2019 by Mr Coughlin, the sole director of the applicant, that he knew the respondent needed the £57,000 mentioned above before he could obtain a grant of probate and sell the house. The email is set out below.

13. There is no mention in Mr Coughlin’s witness statement of there being an agreement that the applicant would advance the respondent the sum of £57,000 or any sum. This is curious because the whole reason for the respondent making use of the applicant’s services was for him to be provided with the advance he so urgently needed. The contract agreement and the option agreement

14. It is common ground that the parties entered into a contract agreement on 09 September 2019, which had provided for the house to be sold to the applicant at a reserve price of £620,000.

15. It is also common ground that on the same day the parties decided to enter into an option agreement instead. It was never explained to me why this happened . The applicant says that the option agreement also provided for the house to be sold at a reserve price of £620,000. However, no figures were entered in the option agreement. The respondent signed the option agreement, but the applicant did not.

16. The underlying issue in this case is whether the option to purchase the house granted over six years ago is still on foot and is accordingly capable of being protected on the register by a restriction or unilateral notice. The original applications

17. Although neither party mentioned it at the hearing, there are before me in fact two disputed and consolidated cross applications to Land Registry concerning the option, which have been referred to the tribunal under s.73(7) Land Registration Act 2002 . The restriction application

18. The first application before me is an application by the applicant for the entry of a restriction on both titles of the house made on 14 March 2023. However, the application was made to protect the contract agreement (not the option). On 08 May 2024, the respondent objected to the application. On 18 October 2024, Land Registry referred the dispute to the tribunal. The unilateral notice application

19. On 04 January 2023, a unilateral notice was entered by the applicant in the charges register of the long leasehold title (MX276355). However, the notice was entered to protect the contract agreement (not the option). Strangely, no such notice was entered in the charges register of the freehold title (MX375938).

20. The second application before me is an application made on 11 August 2023 by the respondent to remove this unilateral notice. On 06 March 2024, the applicant objected to the application. On 18 October 2024, Land Registry referred the dispute to the tribunal.

21. As I have explained above, it is common ground that the contract agreement no longer subsists. At the outset of the hearing, I indicated to the parties that, with their agreement and in line with the overriding objective, I would deal with the applications as though they were based on the option agreement and not the contract agreement, as that is the real dispute between the parties. The hearing

22. At the hearing the applicant was represented by Mr P Williams of counsel and the respondent by Mr A Ebuzoeme, solicitor. Mr Coughlin gave oral evidence. The respondent gave oral evidence. No other witnesses were called. The witness evidence took up the hearing day, and closing submissions were made in writing.

23. In his skeleton argument, Mr Wiliams suggested that a unilateral notice or restriction should remain on the title pending a final determination, and provision should be made for the case managing of any further evidence. This is not the correct approach. This is the final hearing as to whether the option is valid or not : Jayasinghe v Liyanage [2010] 1 WLR 2016 , The Chief Land Registrar v Silkstone [2012] 1 WLR 400 ). The option agreement and the option

24. I was not given the assistance at the hearing I would like to have had in understanding the option agreement. The applicant’s skeleton was cursory, made no reference to any of the terms of the option agreement and wrongly assumed, as I have said, that the hearing was to be only a case management conference. The respondent’s skeleton engaged more with the option agreement, but still made no reference to any of its terms.

25. The option agreement in the bundle was wholly illegible. I was only provided with a legible blank copy later. I now set out the material parts of the option agreement. The first page

26. The first substantive page of the option agreement is headed Property Owners .

27. It has the respondent’s name and address filled in as well as the address of the house. There is reference to: a. the Marketing Commencement Date , which is filled in as 16 September 2019 (“the marketing commencement date”); b. the Marketing Price, which has been left blank (“the marketing price”); and c. the Purchase Price/Reserve Price , which has also been left blank (the purchase/reserve price”).

28. The first page was signed by the respondent and dated 09 September 2019. Although the page contained space for National Residential to sign on behalf of the applicant, no signature is to be found there. The fourth page

29. The fourth substantive page is headed Key Facts and Comparison Table for the Fixed Price and Sole Selling Rights Options with National Residential.

30. The Fixed Price Option is defined as: • You receive a fixed sum on completion with no further deductions for any legal or estate agency fees • We sell your property for a higher price from which [we] you receive your fixed sum and we pay all required fees and we retain the balance. The fifth page

31. The fifth substantive page is headed Option to Buy Terms of Agreement .

32. Clause 1 provides: Nationwide Property Developments Ltd is the Option Holder and The Online National Residential Estate Agency Ltd, trading as National Residential, is its marketing agent.

33. Clause 2 provides: In consideration of the payment of the sum of £1 (“Option Fee”) (receipt of which the Owner acknowledges) to the Owner by the Option Holder, the Owner grants the Option Holder the option to buy the Property for the Purchase Price at any time within the Option Period.

34. Clause 3 provides: The Option Period means the period of 8 weeks from either the date of signing this Agreement, or the Marketing Commencement Date (indicated overleaf) whichever is the later.

35. Clause 4 provides: On the valid exercise of the Option the Owner shall sell and the Option Holder shall buy the Property at the Purchase Price As I have said, the amount of the purchase/reserve price has been left blank . on the terms of this agreement.

36. Clause 5 provides: The Owner grants the Option Holder, acting as their agent, Sole Selling Rights for the Property for the Option Period and permits the Option Holder to offer the Property for sale through third party agents on the other terms contained in this agreement by marketing to prospective buyers at the Marketing Price As I have said, the amount of the marketing price has been left blank . to generate interest. The Owner agrees to enter into a Sole Selling Rights agreement with the Option Holder for this purpose on the standard terms appended to this agreement.

37. Clause 14 provides for the option to be protected by a restriction.

38. Clause 18 provides: The Owner shall be deemed to be in material breach of this agreement if he is in breach of any of his obligations detailed in the ‘Option To Buy Terms’ or in the ‘Sole Selling Rights Terms’ and he has failed to remedy such breach within fourteen working days of being given written notice by the Option Holder requiring him to remedy the breach.

39. Clause 19 provides: If the Owner is in material breach of this agreement the Option Holder may notify the Owner that it accepts the material breach and determine the agreement.

40. Clause 20 provides: If the Option Holder does not accept the material breach then the Option shall continue until determined in accordance with this agreement.

41. Clause 21 provides: The Option shall determine and the Option Holder shall apply to the Land Registry to remove the restriction and notice registered on any of the following events: i. the expiry of the Option Period and any extension of it unless the Owner is in material breach of this Agreement; ii. a sale of the Property and payment of the Release Sum in accordance with this agreement; iii. the Owner is in material breach of this agreement, the Option Holder accepts that material breach and the Owner pays the Option Holder the Breach Sum being a reasonable pre-estimate of the loss of opportunity incurred by the Option Holder.

42. The fifth page is signed by the respondent and dated 19 September 2019. The latter is probably a mistake for 09 September 2019, which appears otherwise throughout the option agreement. The sixth page

43. The sixth substantive page is headed Sole Selling Rights Terms of Agreement .

44. Clause 2 provides: The duration of this agreement is 8 weeks from either the date of signing, or the Marketing Commencement Date indicated overleaf, whichever is the later. After 8 weeks this agreement will, by mutual agreement, either end, or continue until terminated. Any agreed extension will operate on the same terms as this agreement, with the exception of the marketing and reserve price which may be altered. Termination can be effected by either party giving 14 days written notice, subject to the agreed term of the agreement. In the event that you terminate this agency agreement all agreed fees will be payable to us.

45. The sixth page is signed by the respondent and dated 09 September 2019.

46. There appears to be no obligation on the applicant in the option agreement to make any advance to the client prior to completion of any sale. This is curious because the whole raison d’etre of the option agreement is to provide an upfront advance to a distressed seller.

47. Nor was I shown any collateral agreement or side letter entitling the client to an advance before completion. The relevant events

48. It is common ground that the applicant at the outset advanced just £1,000 to the applicant once the option agreement had been entered into. It was the respondent’s evidence that this was handed over in an envelope. There is no reference to this in Mr Coughlin’s witness statement, nor any explanation as to why only such a small sum was advanced.

49. The applicant says that, pursuant to the option agreement, National Residential found a buyer willing to purchase the property from the applicant for £700,000 (subject to the respondent obtaining a grant of probate to the property). The buyer was Networked Ltd (“Networked”). I am satisfied both that Networked had no connection with the applicant, and that the respondent never entered into a direct contract with Networked.

50. Conditional contracts were exchanged on 17 September 2019, just eight days after the option agreement was signed by the respondent. Networked paid the applicant a deposit of 1%, namely £7,000. No explanation was given as to why such a modest deposit was paid. It might have been because the contract was conditional on the respondent obtaining a grant of probate to Mr East’s estate, and there was at that time a perceived risk that the respondent might not be able to obtain a grant.

51. A s I have said , Mr Coughlin’s evidence is that he would typically use the deposit paid by the third party buyer to make the advance to the client. In this case the deposit was far too small to advance the £57,000 needed by the respondent. Presumably in a case such as this Mr Coughlin would have to find the advance from the applicant’s own resources.

52. In his written evidence Mr Coughlin said that after the conditional contracts were exchanged there were numerous conversations between the applicant, the respondent and his conveyancing solicitors to get authorisation to progress the sale to Networked Ltd.

53. But the respondent could not make progress until he obtained a grant of probate. This could only happen if the advance of £57,000 he wanted was made to him by the applicant.

54. Later in his written evidence, Mr Coughlin said that after numerous attempts to contact the respondent, the applicant sent him a letter dated 13 November 2019 advising him of a unilateral notice which had been entered in the charges register of the property. This is not the unilateral notice the subject of these proceedings , but an earlier one which was subsequently moved. On 26 November 2019, the applicant refunded the £7,000 deposit to Networked Ltd.

55. It is common ground that the advance of £1,000 was returned by the respondent to the applicant’s agent. The emails

56. I shall now set out some important emails to and from Mr Coughlin.

57. On 09 September 2019, Mr Coughlin emailed Ms Lisa Oldham and Mr Kash Qureshi at Mellors solicitors: Hi Lisa and Kashif I spoke to Oseka today while he was with Raj and he kindly gave me the background details on the inheritance. What I would like you to confirm please is:

1. Oseka advised there was another Will and that this will was changed into Oseka being the sole beneficiary in 2012. Oseka says the same solicitor who wrote the 1st Will was aware of the 2nd Will - we just need confirmation that this 1st will is now legally irrelevant and the beneficiaries on this Will cannot contest the 2nd Will

2. I am advised when William East passed away, he did not have any children and just a brother who has not been around for 30years. William inherited the property form their parents and William's bother inherited another property. Their mother (Nellie Lilian East) lived in 6 Acland and this is why she had a restriction placed upon it B2 on Titles MX276355 & MX375938 (I assume to prevent it being sold until she died). I need to know: a. how Nellies restriction comes off - is it a formality through the probate? or is some special permission needed? b. that we do not need permission from the brother? or have any risks with the brother coming back on the scene (he might not be alive?)

3. confirmation of the process, requirements and timescale for going through probate and having the property title put into Oseka's ownership solely. That there is no risk with the 1st Will beneficiaries or the brother leading to Oseka not being the sole owner at the end of the process?

4. that when we pay the tax - assuming this 100% must be paid before probate is granted-how we get security form the estate/property should a problem arise if the will was contested after the payment is made? Please look into this for me. You will have the signed client care letter and ID by tomorrow/Wednesday so I said to Oseka we should have clarity on this by Thursday? If probate is straight forward then this should not be ambitious. We are having to pay out about £60K on this so we need this to be thoroughly looked into. Many thanks and please reply or call me on [ ] if I can help you in anyway.

58. On 10 September 2019, Ms Lisa Oldham emailed Mr Kash Qureshi (emphasis supplied): Hi Kash This is not something on which we can advise as we do not have all of the facts. What David should do is to formally instruct the solicitors dealing with the administration of the estate to provide the information he has requested. If they are unwilling to do so due to a potential conflict of interest, he should instruct his own independent solicitors who deal with grants of probate and also contentious litigation in case it becomes litigious. The solicitor should also be able to advise on the options available in respect of the loan agreement. I definitely wouldn't be able to deal with this from the litigious side or in respect of the loan agreement for the IHT.As the loan of the IHT by David to the estate is part of the estate process, the fees which the solicitor incur in liaising with David should form part of the estate but this should obviously be checked. I can imagine that it would take several months for all of the information to be gathered for David to make an informed decision on whether to loan the money. However, on an informal basis and without accepting any responsibility or liability for my advice, I can reply to the numbered points as follows:-

1. The will dated 26th October 2012 revokes previous wills so it would cancel the first will but only if the second will was found to be valid. It is impossible to confirm whether the second will is valid until the Probate Registry have issued the Grant of Probate, When the solicitors submit the application for the grant, the Probate registry will check their records to see if anyone has registered a caveat. A caveat could be registered by a disappointed beneficiary of the old will or any anyone who believes that the second will is invalid either due to the testator lacking mental capacity when they signed the will, or being put under undue influence. If a caveat has been registered then a court process could follow to decide which will is the valid one. (a) I do not know the answer to this. I think that you would need to look behind the restriction to see why it was registered. Maybe it was to protect a right of occupancy but maybe it was to protect an entitlement to sale proceeds (which could then be due to her estate?). The land registry may have copies of the forms submitted to them by way of application to register the restriction. This would provide more information. I do not know whether the restriction can simply be removed by providing evidence of her death or whether her Personal Representatives would have to sign an authority. This is more a conveyancing question than a probate question, Also, I note that the property is registered under 2 titles, one as freehold and one as leasehold where the term of the lease appears to have expired. This would need to be investigated. (b) I can't see how the brother could be involved unless he was the executor/beneficiary of the old will but obviously I don't have all the facts.

2. There is no need to put the property into Oseka's name. He can sell the property as executor once the grant is received confirming her is the executor. It is always a risk that Oseka may not be found to be the person entitled to sell the property as it may be found that the will is invalid due to lack of capacity or undue influence. The inland revenue will need to stamp the IHT forms once the relevant IHT is paid and this can take them several weeks. Once the solicitors have the stamped form they can apply for the grant. At the moment, the grants are taking about 2 months to come through assuming there is no caveat registered and there are no queries.

3. I think it is risky to lend the money to the estate especially with what appears to be a homemade will. At the very least, a proper loan agreement should be drawn up with each party having their own legal advice. I am unsure how valid that loan agreement would be however if the second will was found to be invalid as the agreement would then be with someone who was not found to the executor of the will.

4. I would not be advising David to provide any money for IHT on this one . Usually the executor would seek an official loan maybe from their bank to cover the IHT payment if there are insufficient funds in the estate to pay them from the deceased's bank accounts. Hope this helps

59. This email was forwarded to Mr Coughlin the same day.

60. On 12 September 2019, Mr Coughlin emailed Abigail, who worked for Mr Shah: Hi Abigail We worked with you on a sale of 87 Drysdale Road earlier this year where you were managing the probate for the seller and we conducted the sale. It worked really well albeit with delays with the probate office at that time - but all parties were happy in the end as it was done as fast as possible with great communication. Osaka Egbunike (inheriting and selling 6 Ackland Road) has approached us in similar circumstances (albeit more complicated due to tax bills that need paying before probate is granted) and have been advised that Amandeep is managing the probate. Mellors are again acting for the seller in the conveyancing and they have spoken with Amandeep to get an update on the probate. The more complicated challenge we have here that I need your help to overcome is that in addition to managing a sale, we are also being asked to pay the 1st instalment for the HMRC tax bill (£37K) as well as the seller is wanting a cash advance to pay some bills and have some money (£20K'ish). We would pay this but only get this money back on the sale of the property to our buyer completes and hence it is a risk I need to understand. We have an investor happy to purchase and they will pay a deposit this week - so in a perfect world, we would pay costs necessary to carry out the probate and then when granted our investor completes and we get our money back. The challenge we have to overcome is the security aspect of paying the tax and the money. The risks include:

1. Will not being challenged - a Caveat at the Probate - or a beneficiary on the Will challenges the 2nd Will

2. removing the restriction at 82 in the Register in favour of Nellie Lilian East - is this a matter of course of doe this pass to Nellie's estate? Lisa from Mellor's is their head of Probate and she has emailed a list of matters to look into and I have attached a copy of Lisa's email The applicant’s case

61. The applicant says that because the respondent was no longer in contact it was not possible to progress the sale to Networked. The applicant says it thereby lost a profit of £80,000. It also says that, on a proper construction of the option agreement, the option is still alive, and the applicant is accordingly entitled to have the option protected on the register of the property by a restriction and/or a unilateral notice. It is said I should direct Land Registry to enter a restriction on the register of the house and cancel the application to remove the unilateral notice already on the register of the house.

62. I should add that as part of its pleaded case the applicant also argued that it had acquired an equitable interest in the house as a result of having been added as a party to proceedings between the respondent and his former conveyancing solicitors in the County Court at Willesden. This point was rightly not pursued. The respondent’s case

63. The respondent says that the option agreement is unenforceable because it was not signed by the applicant as is required by s.2 Law of Property (Miscellaneous Provisions) Act 1989 .

64. He also says that he was never advanced the promised £57,000. This was an essential part of the agreement between the parties. He accepted this fundamental breach of the option agreement and returned the £1,000 deposit. Accordingly, the option falls away. Is the option agreement unenforceable: discussion

65. s.2 of the 1989 Act provides, where relevant, as follows: (1) A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each. (2) The terms may be incorporated in a document either by being set out in it or by reference to some other document. (3) The document incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not necessarily the same one) must be signed by or on behalf of each party to the contract … (6) In this section— “disposition” has the same meaning as in the Law of Property Act 1925 ; “interest in land” means any estate, interest or charge in or over land or in or over the proceeds of sale of land ... (8) Section 40 of the Law of Property Act 1925 (which is superseded by this section) shall cease to have effect.

66. This argument fails because s.2 is only concerned with contracts to dispose of interest in land, not the grant of actual interests. Fundamental breach: discussion

67. I regret I am unable to accept the credibility of Mr Coughlin’s evidence.

68. On 10 September 2019, he received a copy of an internal email at Mellors sent on the same day (set out in full above), which includes the following: (a) I can imagine that it would take several months for all of the information to be gathered for David to make an informed decision on whether to loan the money. (b) I think it is risky to lend the money to the estate especially with what appears to be a homemade will. (c) I would not be advising David to provide any money for IHT on this one.

69. Yet Mr Coughlin says in paragraph 9 of his witness statement: Once I was satisfied with the merits, as well as the risks in having probate granted, Nationwide Ltd entered into a contract of the sale and purchase of the Property with Mr Egbunike on or around 6 September 2019.

70. Mr Coughlin cannot have accepted the risks on or around 06 September 2019 as he sent an email to Mr Shah’s assistant, Abigail, on 12 September 2019 about the challenges of advancing money to the respondent (set out in full above).

71. Another troubling matter is that the option agreement was signed on 09 September 2019, again prior to these emails. (Mr Coughlin accepted in his oral evidence that the date of 19 September 2019 on the fifth page was an error).

72. I have seen no evidence that at the time the option agreement was entered into, or at any time, Mr Coughlin had decided to advance £57,000 or any significant sum to the respondent. All the evidence points the other way.

73. Mr Williams says in his closing submissions that by securing a purchaser for £700,000, above the reserve of £620,00, the applicant had performed every contractual obligation. I cannot accept that submission. In my judgment, the applicant had an obligation to pay the respondent a substantial advance prior to the sale of the house.

74. The successful party is normally entitled to costs. If the applicant has any submissions to the contrary, it must provide them to the respondent and the Tribunal within 14 days.

75. Finally, I will say this. Mr Ebuzoeme strongly criticised Mr Williams for the manner in which he cross-examined the respondent. Whilst the cross-examination was robust, it never came anywhere close to overstepping the mark. Mr Ebuzoeme should not have made these criticisms. Dated this 17 November 2025 Simon Brilliant BY ORDER OF THE JUDGE OF THE PROPERTY CHAMBER OF THE FIRST-TIER TRIBUNAL