Summary

On its true construction, a right of pre-emption in favour of the defendants as "transferee" was exercisable only while they both remained beneficial owners of the property transferred to them. The right was lost by the execution of a deed of gift whereby one of the defendants disposed of all his interest in the property in favour of the other.

Facts

Action by the claimant ('M') for a declaration that a right of pre-emption conferred upon the defendants ('H') and ('W') had expired and was no longer of any effect. In 1987 M sold part of his land ('the Property') to the defendants as joint beneficial owners. By clause 5(1) of the transfer M gave an undertaking to "the Transferee for so long as the Transferee is the beneficial owner of the Property" not to sell a defined part of the retained land ('the pre-emption property') without first offering it "to the Transferee". In December 1990 the defendants entered into a deed of gift whereby H gave his entire interest in the Property to W, such that she became the sole beneficial owner. On learning of this, M contended that the right of pre-emption had expired, since the defendants were no longer both the beneficial owners of the property.

Held

(1) Although clause 5(1) clearly contained a drafting imperfection, in that the reference should have been to "the Transferees" in the plural, this had no real significance to the present dispute, since the court had no doubt that the expression "the Transferee" was to be construed as referring to both H and W. (2) As a consequence, however, it followed that the phrase "for so long as the Transferee is the beneficial owner of the Property" should be read as requiring both H and W to be the beneficial owner. That requirement was not satisfied when W alone was the beneficial owner. It followed that the right of pre-emption had expired in 1990.

Declaration accordingly.