Summary

A unilateral notice which had been registered against the title to a property could remain on the register if the party who had registered it provided a fortified cross-undertaking in damages in the sum of £5 million.

Facts

The claimant vendor applied for an order requiring the defendant purchaser to provide a fortified undertaking in damages.

The purchaser had registered a unilateral notice against the vendor's title to a property, thereby preventing the vendor from selling the property to an alternative purchaser. It had done so in order to protect a contract between it and the vendor for the purchase of the property which it said continued to exist. An application for summary judgment in relation to the dispute was due to be heard three months after the instant hearing.

The purchaser offered an undertaking in damages in support of the notice remaining on the register, though it suggested that the court should allow the notice to remain without requiring the giving of such an undertaking. It said that there was no evidence of any risk of loss being caused to the vendor if the notice was allowed to remain on the register.

Held

The court tried to protect both parties to such disputes by telling the party who had registered the notice that the notice might remain on the register if it undertook to pay damages to cover any losses caused by the presence of the notice if it was ultimately found to have been wrongly entered, Tiverton Estates Ltd v Wearwell Ltd [1975] Ch. 146 followed. In the instant case, the purchaser had acted wrongly by suggesting that the court should allow the unilateral notice to remain without the giving of an undertaking. Its suggestion that there was no risk of loss was wholly unrealistic. Risk of loss arose from the contractual arrangements that the vendor had entered into with the alternative purchaser, and there was evidence that there were other losses which would arise if the vendor was prevented from forming a contract with the alternative purchaser. The focus was on protecting the vendor for the period until the summary judgment application was determined. Based on the evidence available, it was appropriate to order that the unilateral notice could remain on the register if the purchaser provided a fortified undertaking in the sum of £5 million. The form of the fortification was to be that cash should be made available in the English jurisdiction to meet any liability that might arise as a result of the notice remaining on the register.

Application granted