Chattey and Another v Farndale Holdings Inc and others: CA 11 Oct 1996

The plaintiffs had paid deposits for apartments which were to be built. After the developer became insolvent the plaintiffs sought recovery of the deposits, saying they had a lien which preceded the claims of chargees.
Held: The one appeal failed and another succeeded. ‘the circumstances in which a purchaser’s lien will arise are not limited to those in which the contract is or has been specifically enforceable but include those in which there is or has been a right to call for the legal estate whether presently, in the future or conditionally so as to give rise to the equitable interest or estate. . . ‘
and ‘It is not disputed that the purchaser’s lien arises by operation of law from the contract unless it is modified or excluded by express agreement of the parties or by necessary implication from the contractual arrangements the parties have entered into. The lien so arising is an unqualified equitable right. In common with all other equitable rights it is capable of being subordinated to the rights of a subsequent purchaser for value of a legal estate without notice of the equitable right. But that inherent weakness is no reason to modify the nature of the right itself. ‘
[1996] EWCA Civ 696, [1997] 1 EGLR 153, (1998) 75 P and CR 298, [1997] 06 EG 152, [1996] NPC 136
Land Registration Act 1925 70(2)
England and Wales
CitedRose v Watson HL 7-Mar-1864
The buyer had paid deposits under an unconditional contract for the purchase of land induced by the misrepresentations of the seller. On discovering the falsity of the representations the buyer rescinded the contract and successfully resisted a . .
CitedLondon and South Western Railway Co v Gomm CA 1882
A grant was given to repurchase property, but was void at common law for the uncertainty of the triggering event.
Held: The ‘right’ to ‘take away’ the claimants’ estate or interest in the farm was immediately vested in the grantee of the right . .
CitedSainsbury v O’Connor CA 1991
Sainsbury and a Belgian company held 75% and 25% respectively of a joint venture company. Sainsbury had an option, not exercised for 5 years, to acquire the 25% holding. The option was never exercised and was cancelled. The court was asked whether . .
CitedHewitt v Court 15-Mar-1983
Austlii (High Court of Australia) Lien – Equitable – Contract for provision of work, labour and materials – Progress payments – Whether lien obtained over unfinished object – Whether dependent upon right to . .
CitedLevy v Stogdon 1898
Specific performance of a contract by an assignees of the purchaser was dismissed on the grounds of delay, but his claim for a lien was upheld. . .
CitedWhitbread and Co Ltd v Watt CA 1902
The buyer agreed to buy a house when the developer had finished 300 houses on the site, but now sought return of his deposit.
Held: The developer’s appeal against an order for the return of the deposit failed.
Williams LJ said: ‘The lien . .
CitedWhitbread and Co Ltd v Watt ChD 1901
The purchaser contracted to purchase a plot on a building estate belonging to the vendor. The contract provided that ‘the purchase is to be completed as soon as 300 houses shall have been erected on the said estate’. Thus the contract was one under . .
CitedMiddleton v Magnay 1864
The vendor had agreed to grant a 21 year lease over certain land. In fact he only had an eight year lease in half the land. When the contract went off on account of the inability of the vendor to grant the lease contracted for the purchaser claimed . .
CitedAshburn Anstalt v Arnold (2) CA 25-Feb-1988
Various leases of properties had been granted. Legal and General occupied the property under an arrangement under which they paid no rent. The landlord sought possession, saying that the agreements were licences not tenancies because of the absence . .
CitedLyus v Prowsa Developments Ltd ChD 1982
The plaintiffs contracted to buy a plot of registered land with a house to be built on it. The developer had charged the estate as a whole to a bank to secure the development finance. The developer became insolvent and the bank sold the estate as . .

These lists may be incomplete.
Updated: 02 June 2021; Ref: scu.140563