Faruqi v English Real Estates Ltd
| Jurisdiction | England & Wales |
| Year | 1979 |
| Date | 1979 |
| Court | Chancery Division |
Vendor and Purchaser - Contract - Requisitions on title - Land sold at auction subject to entries on register - Land registered subject to restrictive covenants in deed - Contents of deed not disclosed on registration - Vendor unable to supply copy - Whether specific performance to be granted
The plaintiff agreed to purchase from the defendant company registered property, part being registered with absolute freehold title and part with absolute leasehold title. He paid 10 per cent. deposit to the stakeholder. The contract incorporated the National Conditions of Sale (19th ed.) with certain general and special conditions. One of the special conditions was that the property was sold “subject to entries on the registers of title.” One of the general conditions provided that when by the special conditions the property was sold subject to any lease, covenant, restriction or other matter, a copy could be inspected at the solicitors' offices and the purchaser should be deemed to purchase with full notice whether he had made an inspection or not. On inspecting the charges register the plaintiff's solicitors found that both the freehold and leasehold titles were subject to restrictive covenants contained in a deed of 1883 and that neither the deed nor a certified copy nor examined abstract had been produced on first registration. On making requisition to the defendants' solicitors for production of the deed the plaintiff's solicitors were informed that a copy could not be supplied.
On a summons, inter alia, for declarations that the requisitions in respect of title had not been sufficiently answered and that the defendants had not shown good title to the property:—
Held, that although the plaintiff was bound on a strict construction of the contract to take the property subject to the entries on the registers of title, in equity the defendants were under an obligation to make a full and frank disclosure of any known defects in the title in such language that the ordinary purchaser would know that there was such a defect; that, since there was no indication that there was a defect in the title in the general and special conditions of sale, the court would not enforce the contract by an order for specific performance and, in those circumstances, the plaintiff was entitled to a declaration that he alone could give to the stakeholder a good receipt and discharge for the deposit.
The following cases are referred to in the judgment:
Blenkhorn v. Penrose (
Marsh and Earl Granville, In re (
Nottingham Patent Brick & Tile Co. v. Butler (
Schindler v. Pigault (
Williams v. Wood (
No additional cases were cited in argument.
ORIGINATING SUMMONS
At an auction held on June 7, 1978, the plaintiff, Ghufran Ahmad Faruqi, agreed to purchase from the defendant company, English Real Estates Ltd., for £18,350 a property known as Churchfield Mansions, New Kings Road, Fulham, London, S.W.6 and described as lot 87 in the auction particulars. He paid a deposit of £1,835 to the auctioneers, Messrs. Willmotts, as stakeholders. The contract incorporated the National Conditions of Sale (19th ed.) and there were general and special conditions set out in the auction particulars which provided, inter alia, that block B of the property was registered with absolute leasehold title and blocks G and H with absolute freehold title and also that: “The property will be sold subject to … (b) the entries on the registers of title.” The defendants had become the registered proprietors on July 16, 1976. An. examination of the charges register showed that the property was subject to restrictive covenants contained in a deed dated May 17, 1883, which had not been produced on first registration. The plaintiff's solicitors failed to obtain a copy of the deed from the defendants' solicitors. The plaintiff issued an originating summons on July 18, 1978, claiming declarations that certain requisitions in respect of title had not been sufficiently answered, that good title had not been shown in accordance with the contract of sale, that the plaintiff was entitled to give a good receipt and discharge for the deposit and to receive interest on the deposit, and that the defendant company be ordered to pay the plaintiff's costs of investigation of title and of providing insurance protection since the date of the contract.
The facts are set out in the judgment.
R. J. Simpkiss for the plaintiff.
G. C. Rafferty for the defendant company.
WALTON J. The property with which this vendor and purchaser summons is concerned is part freehold and part leasehold and has been in the ownership of the defendants, English Real Estates Ltd., for approximately two years. It was acquired by them or an associated company of theirs, so far as it was freehold, under a contract of which I have seen a draft. There is a special condition in that contract as follows:
“The property is sold subject to the covenants...
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