Chapter 2 Interactive key cases

Chapter 2 Interactive key cases

The distinction between legal and equitable interests

Claimant sought specific performance of an agreement for a lease which was declined since the claimant was himself in breach of one of the covenants in the lease to which the agreement related.

A court will not exercise its discretion and grant specific performance in favour of a claimant who himself has acted unconscionably and not come to the court with clean hands.

The vendor sold land occupied by his tenant. The purchaser was held to have constructive notice of the tenant’s rights.

A purchaser must make enquiries as to the rights of persons who are not the vendor and who are in occupation of the land being purchased. Failure to do so fixes the purchaser with constructive notice of any rights those persons in occupation may have in the land.

Mr Tizard sought to obtain a mortgage over a house which was in his sole name. In his mortgage application form he stated he was single but when the mortgagee’s surveyor went to inspect the property, his true status as married but separated became known. No enquiries were made about any rights his wife might have had in the house and consequently the surveyor and mortgagee were deemed to have notice of the wife’s beneficial interest in the property.

Where it is reasonable to expect a purchaser to make further enquiries about any rights a person may have in the land being purchased, failure to do so will give the purchaser notice of any such rights.

A purchaser of a legal estate took free from an existing equitable interest over the land as he was a bona fide purchaser for value of a legal estate without notice. His successor also took free from the equitable interest despite having notice of it.

Once an equitable interest has been destroyed by virtue of a transfer of the land over which it exists, to a purchaser acting in good faith with no notice of its existence, that equitable interest cannot be revived upon a subsequent transfer of the land.

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