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Fauzi Elias v George Sahely & Co (Barbados) Ltd

[1983] 1 AC 646

Overview

Signed document

Elias sought specific performance of an oral contract for the sale of land. Sahely claimed that the document had not been evidenced in writing as required by the Statute of Frauds in relation to land contracts.

Elias claimed that the contract had been evidenced in writing, relying on two documents:

(1) a letter written by his lawyer which contained the material terms (including price) and which asked for a contract to be forwarded for signature, and

(2) a receipt for a deposit relating to the land sent by Sahely’s solicitor. 

 

Facts

Elias sought specific performance of an oral contract for the sale of land.

He alleged the contract had been recorded in two documents

(1) a letter written by his lawyer which contained the material terms (including price) and which asked for a contract to be forwarded for signature, and

(2) a receipt for a deposit relating to the land sent by Sahely’s solicitor. 

 

First instance

Elias succeeded at first instance

 

Appeal (Court of Appeal of Barbados)

Sahely succeeded on appeal. Accepted there was an oral 'consensus' but held there was no contract of sale - there could be no binding contract absent writing. The two documents provided in this case were insufficient.

 

Privy Council

Lord Scarman, delivering the Board's advice, held that there was an oral contract

Importantly, the Board held that the receipt and letter could be read together; provided they were read together they satisfied the formality requirements in the Statute of Frauds.

To be read together the documents needed to be linked in some way - here, the the receipt needed to refer in some way to the letter. Although it was not possible to link the receipt with the letter without the aid of parol evidence, it was possible to introduce such evidence to identify the document referred to in the receipt. The receipt in this case clearly referred to another transaction and parol evidence could be given to explain the transaction and identify any other document. The letter was identified in oral evidence as 'evidence of the transaction' (although not the transaction itself) and that was sufficient.

The Board (page 6) noted that the Statute of Frauds was not designed to exclude such evidence:

The Statute of Frauds is concerned to suppress not evidence but fraud ... Evidence in writing is what the statute requires ... If ... a document signed by the party to be charged refers to a transaction of sale, parol evidence is admissible both to explain the reference and to identify any document relating to it.  Once identified, the document may be placed alongside the signed document.  If the two contain all the terms of a concluded contract, the statute is satisfied.