As noted in our recent comment on Selby District Council v Samuel Smith Old Brewery Ltd [2001] 01 EG 82 (see
This stands in strong contrast to the case of a claim by P that rights over the retained land have been impliedly granted in favour of the part conveyed. Certain presumptions (not available to V) will operate in favour of P unless – and it is an important qualification – the contract or conveyance indicates to the contrary.
The picture is incomplete without noting that where V sells both parts on the same day to P1 and P2 (simultaneous transactions), the presumptions referred to will operate in favour of them both, should they, or their successors, fall into dispute.
Reverting to the first scenario, standard conditions of sale have long sought to put V on the same footing as P, and have done so by providing, in effect, that each party will be deemed to have acquired their respective properties in simultaneous transactions concluded with a common seller: see condition 3.4.3 of the standard conditions of sale (3rd ed) 1995.
As in Selby (which similarly concerned general condition 5(3) of the 1984 Law Society’s conditions of sale), the outcome of Holaw (470) Ltd v Stockton Estates Ltd [2000] EGCS 89 was that V derived no assistance from the condition. But the reasons given were quite different. It was held that, in the absence of a contrary intention, a contractual right to have a particular provision inserted into a later conveyance was, by operation of the so-called doctrine of merger, necessarily extinguished once the conveyance had been executed.
The omission of the desired reservation could be cured, if at all, only by making a case for rectification.
Holaw should be treated with caution. It is at the very least arguable that it would (or should) have gone the other way if the general condition in question had been in the form to be found in the 1995 condition mentioned above. The 1984 version considered in Holaw spoke in terms of what “the conveyance of the property shall contain”. The later model simply declares that the parties “will each have” certain rights. Read in “henceforth”, and you can arguably say goodbye to the doctrine of merger.
Consideration may also have to be given to general condition 7.4, which declares that completion does not cancel liability to perform any “outstanding obligation” under the contract.
As noted in our recent comment on Selby District Council v Samuel Smith Old Brewery Ltd [2001] 01 EG 82 (see PP 2000/58, a not uncommon scenario involves a sale by V of part of his land to P, and a subsequent assertion by V (or his successor) that, as a matter of common understanding, certain rights over the land taken by P, even though not mentioned, must be taken to have been reserved in favour of the land retained by V. It is a well-established rule of common law that, easements of necessity apart, the circumstances have to be quite exceptional for V to succeed.
This stands in strong contrast to the case of a claim by P that rights over the retained land have been impliedly granted in favour of the part conveyed. Certain presumptions (not available to V) will operate in favour of P unless – and it is an important qualification – the contract or conveyance indicates to the contrary.
The picture is incomplete without noting that where V sells both parts on the same day to P1 and P2 (simultaneous transactions), the presumptions referred to will operate in favour of them both, should they, or their successors, fall into dispute.
Reverting to the first scenario, standard conditions of sale have long sought to put V on the same footing as P, and have done so by providing, in effect, that each party will be deemed to have acquired their respective properties in simultaneous transactions concluded with a common seller: see condition 3.4.3 of the standard conditions of sale (3rd ed) 1995.
As in Selby (which similarly concerned general condition 5(3) of the 1984 Law Society’s conditions of sale), the outcome of Holaw (470) Ltd v Stockton Estates Ltd [2000] EGCS 89 was that V derived no assistance from the condition. But the reasons given were quite different. It was held that, in the absence of a contrary intention, a contractual right to have a particular provision inserted into a later conveyance was, by operation of the so-called doctrine of merger, necessarily extinguished once the conveyance had been executed.
The omission of the desired reservation could be cured, if at all, only by making a case for rectification.
Holaw should be treated with caution. It is at the very least arguable that it would (or should) have gone the other way if the general condition in question had been in the form to be found in the 1995 condition mentioned above. The 1984 version considered in Holaw spoke in terms of what “the conveyance of the property shall contain”. The later model simply declares that the parties “will each have” certain rights. Read in “henceforth”, and you can arguably say goodbye to the doctrine of merger.
Consideration may also have to be given to general condition 7.4, which declares that completion does not cancel liability to perform any “outstanding obligation” under the contract.
