Ezekiel & Anor v Kohali & Anor

A vendor of land is ordinarily under an implied obligation to show good title to the property sold and to land over which agreed easements are to be granted. That obligation may be rebutted where the purchaser had actual knowledge, before contracting, that the vendor could not show good title. Mere constructive knowledge is not sufficient for that purpose. A purchaser who knows the true position cannot rely on a contradictory representation as to title. Specific performance remains discretionary. Where both parties seek it, delay and hardship must be assessed in the circumstances, and the remedy may be granted despite a substantial lapse of time.

The claimants agreed to purchase two plots of development land from the defendants under a written agreement dated 29 September 1999. They alleged that the agreement covered the whole of the relevant site, including parts of an access strip to which the defendants lacked registered title, and sought specific performance with an abatement, or damages for breach of contract and misrepresentation.

The defendants denied liability and counterclaimed for specific performance. The central issues were the construction of the agreement, the defendants’ ability to grant title and easements, the effect of the claimants’ knowledge of the registered titles, reliance on representations as to ownership, and the appropriate remedy.

1. The court held that the obligation to show good title is ordinarily implied into a contract for the sale of land. A vendor must be the registered proprietor with absolute title, or, in the case of unregistered land, be seised of the fee simple and able to convey it without the possibility of dispute or litigation. A vendor must also have title to land over which agreed rights of way or easements are to be granted.

2. The implication may be rebutted by proof that the purchaser knew, before contracting, that the vendor could not show good title to the property agreed to be sold. The claimants’ actual knowledge was established from the title investigations, the documents received before the agreement, the surrounding correspondence and the confirmation given at the meeting on 29 September 1999. Constructive knowledge was not sufficient to rebut the implication, although it was unnecessary to decide the point on the facts.

3. Construed in its factual and planning context, the agreement included the whole of the Access Strip in Plot A. It also included a vehicular right of way over the Access Strip for the benefit of Plot C. The agreement did not require an easement for services over the Access Strip in favour of Plot C, because an alternative access was being acquired and, in any event, the defendants lacked title to land immediately north of the strip.

4. The defendants had represented that they owned the whole site, including the Access Strip and other unregistered areas. However, the claimants knew the extent of the defendants’ registered title when they entered into the agreement. Their knowledge, together with the confirmation at the final meeting, meant that they had not relied on the representations. Their claims for specific performance with an abatement and for damages in contract or under Misrepresentation Act 1967 section 2(1) therefore failed.

5. Specific performance was discretionary. Relevant considerations included the parties’ conduct, hardship, fairness and the interests of justice. In the unusual circumstances, both sides sought specific performance, the claimants could not show hardship, and the delay did not make relief unjust. Specific performance was therefore granted to the defendants without an abatement. Interest under Supreme Court Act 1981 section 35A was refused because the provision concerns debts or damages at law and not equitable relief.