Source: All England Reporter
Publisher Citation: [2002] All ER (D) 21 (Oct)
Court: Court of Appeal, Civil Division

Schiemann, Arden and Dyson LJJ

Representation Christopher Spratt (instructed by Abrahamson & Associates) for the claimant.
  Ivan Clarke (instructed by Kenneth Beavis & Co, Chelmsford) for the defendants.
Judgment Dates: 2 October 2002


Sale of land - Transaction at undervalue - Meaning of undervalue - First and second defendants agreeing transfer of property to third and fourth defendants - Contract providing for transfer of property to third and fourth defendants already in existence - Claimant contending transfer made at an undervalue - Whether existence of contract having effect on valuation - s 423(1).

The Case

When s423 of the talked of an undervalue, it presupposed a valuation undertaken by the seller immediately prior to the sale. That valuation had to take into consideration all the encumbrances of the property, including, in the instant case, a mortgage and an obligation under a contract to transfer the property to the second and third defendants. Accordingly, in the instant case, there had been no undervalue in sensible terms, since the purchasers had not been the world at large, but rather had been the third and fourth defendants who had had the right under the contract to purchase the property.

Practice Areas

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