||All England Reporter
|| All ER (D) 21 (Oct)
||Court of Appeal, Civil Division
Schiemann, Arden and Dyson LJJ
||Christopher Spratt (instructed by Abrahamson & Associates) for the claimant.
||Ivan Clarke (instructed by Kenneth Beavis & Co, Chelmsford) for the defendants.
||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).
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.
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