Warnborough Ltd v Garmite Ltd
Warnborough Ltd v Garmite Ltd
- 2006
- Estates Gazette [2006] 03 EG 121 (CS) (1) .
[2006] EWHC 10 CL, 12 January 2006. Considers whether an option agreement fell within the court's jurisdiction to grant relief from forfeiture. W sought performance of a contract for the sale and purchase of a property following W's exercising of an option to repurchase the properties granted to W by G. Upon completion the purchase price was left outstanding, secured by a charge on the property. At the same time G granted W an option with specific conditions to repurchase the property. G fell into arrears with payments under the charge and both parties then agreed a replacement option. G fell further into arrears and W sought to exercise the option. G contended that: (1) the option was unenforceable as it was a clog on the equity of redemption; (2) it was in the nature of a penalty or provision for forfeiture and (3) that the court should grant relief from forfeiture. "Held": claim allowed. As the transaction was a sale and purchase and not a mortgage the rule on clogs did not apply. There was no basis for the estoppel defence. The provisions of the option agreements were not in the nature of a penalty and there were no grounds for relief from forfeiture.
WARNBOROUGH LTD V GARMITE LTD
PENNINGTON V CROSSLEY
JOBSON V JOBSON
SHILOH SPINNERS LTD V HARDING
DUNLOP PNEUMATIC TYRE CO LTD V NEW GARAGE AND MOTOR CO LTD
STARSIDE PROPERTIES V MUSTAPHA
ZIM ISRAEL NAVIGATION LTD V EFFY SHIPPING CORPORATION
TANKEXPRESS A/S V COMPAGNIE FINANCIERE BELGE DES PETROLES SA
[2006] EWHC 10 CL, 12 January 2006. Considers whether an option agreement fell within the court's jurisdiction to grant relief from forfeiture. W sought performance of a contract for the sale and purchase of a property following W's exercising of an option to repurchase the properties granted to W by G. Upon completion the purchase price was left outstanding, secured by a charge on the property. At the same time G granted W an option with specific conditions to repurchase the property. G fell into arrears with payments under the charge and both parties then agreed a replacement option. G fell further into arrears and W sought to exercise the option. G contended that: (1) the option was unenforceable as it was a clog on the equity of redemption; (2) it was in the nature of a penalty or provision for forfeiture and (3) that the court should grant relief from forfeiture. "Held": claim allowed. As the transaction was a sale and purchase and not a mortgage the rule on clogs did not apply. There was no basis for the estoppel defence. The provisions of the option agreements were not in the nature of a penalty and there were no grounds for relief from forfeiture.
WARNBOROUGH LTD V GARMITE LTD
PENNINGTON V CROSSLEY
JOBSON V JOBSON
SHILOH SPINNERS LTD V HARDING
DUNLOP PNEUMATIC TYRE CO LTD V NEW GARAGE AND MOTOR CO LTD
STARSIDE PROPERTIES V MUSTAPHA
ZIM ISRAEL NAVIGATION LTD V EFFY SHIPPING CORPORATION
TANKEXPRESS A/S V COMPAGNIE FINANCIERE BELGE DES PETROLES SA