On appeal from: [2011] CSIH 30

The appellant was assigned the assets of a company which had gone into liquidation. This company had purchased a piece of land from the respondent, the disposition of which contained provisions for absolute warrandice – meaning that a warranty was given against all defects in title at the time the disposition was delivered. When the purchaser attempted to register its title to the land it was discovered that part of the land belonged to a company, JCL. Further complicating the matter,  unbeknownst to either party at the time, the title to the disputed part was in fact held by a Mr Lynch, having been transferred by JCL to him in error in 1991

JCL served an eviction notice and the appellant paid for the title to the disputed area to avoid eviction. The appellant’s subsequent action against the respondent for breach of warrandice was dismissed by the Court of Session.

The Supreme Court unanimously allowed the appeal. It was not always essential that the threat of eviction should be made by the person who had title to the property at the time when the threat was made. This was consistent with principle and the practical purpose and rationale of the law of warrandice, which, in order to avoid pointless delay, expense and litigation, permits a purchaser who accedes to a threat, without any judicial determination, to claim against the seller for breach of warrandice. It was enough for the person making the threat to have an incomplete title to the land if he was undoubtedly in a position to compel the title holder to transfer the title to him, or if the threat was bought off, the purchaser.

For judgment, please download: [2012] UKSC 50
For Court’s press summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII