Area Estates Ltd. v Weir

Area Estates Ltd. v Weir

ESC 7 was ineffective to prevent rescission because the vendor, properly advised, ought to have known the surrender of the lease was ineffective; the existence of the lease was not a mere technical defect, as there was a real risk of the trustee in bankruptcy asserting the lease subsisted.

Parties
Appellant/vendor: Area Estates Limited; Respondent/purchaser: Weir
Jurisdiction
England and Wales
Judgment Date
20 July 2010
Procedural Posture
Civil Appeal / Appeal From Summary Judgment
Outcome
Appeal dismissed
Legal Topics
Rescission of Contract, Defective Title, Summary Judgment, Exclusion Clauses, Bankruptcy and Property Disposition
Property Law Contract Law Bankruptcy Law Rescission of Contract Defective Title Summary Judgment Exclusion Clauses Bankruptcy and Property Disposition

Case Brief

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Parties

Area Estates Limited

Appellant/vendor

Weir

Respondent/purchaser

Procedural Posture

Civil Appeal / Appeal From Summary Judgment

Legal Issues

  1. 1 Whether Extra Special Condition 7 (ESC 7) prevented the purchaser from rescinding the contract due to the continued existence of the lease
  2. 2 Whether the existence of the lease was a technical conveyancing defect insufficient to justify rescission

Ratio Decidendi

ESC 7 was ineffective to prevent rescission because the vendor, properly advised, ought to have known the surrender of the lease was ineffective; the existence of the lease was not a mere technical defect, as there was a real risk of the trustee in bankruptcy asserting the lease subsisted.

Court Disposition

Appeal dismissed

Orders

  • Repayment of the £40,000 deposit with interest and costs to the respondent