Kinane v Alimamy Mackie-Conteh [2005]

1. Facts

• Background: Kinane (C) provided a loan to a borrower (D) who agreed by letter to charge his land as security for the loan.

• Issue: The borrower failed to repay the loan, leading Kinane to seek enforcement of the security. However, it was argued that the written instrument did not meet the formal requirements for creating a mortgage.

2. Outcome

• Court Decision: The Court of Appeal (CoA) decided to use promissory estoppel (PE) to support the creation of the mortgage and grant the lender proprietary remedies despite the lack of formal documentation.

• Reasoning: The court applied PE to enforce the security arrangement, even though the written agreement did not fully comply with formal requirements.

3. Impact and Analysis

• Application of PE:

◦ Support for Incomplete Formalities: The case is notable for its liberal approach to PE, applying it to support an incomplete security arrangement. The court allowed PE to enforce the security despite the written instrument not meeting all formality rules.

◦ Proprietary Remedies: By applying PE, the court enabled Kinane to obtain proprietary remedies, which would typically be unavailable without a formally valid mortgage.

• Unconscionability:

◦ Need for Explanation: There is some difficulty in understanding why incomplete formality rules were set aside in this case without a clear explanation of unconscionability. The judgments did not fully clarify why it was deemed unconscionable to deny enforcement of the mortgage based on incomplete formalities.

◦ Liberal Approach: The case represents one of the most liberal uses of PE in the context of mortgage law post-Land Registration Act 1989, emphasizing flexibility in enforcing informal agreements when fairness requires it.

• Formalities vs. Equity:

◦ Flexibility in Enforcement: This case highlights the tension between strict adherence to formality requirements and the equitable principle of ensuring fairness through PE. It reflects a broader willingness to use PE to enforce agreements that, while lacking formal documentation, have been acted upon and relied upon to the detriment of one party.

◦ Post-LPA 1989: The decision is significant in showing how courts may apply PE in modern contexts to uphold agreements and provide remedies that formalities alone might preclude.