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Industrial Properties v AEI [1977]

Facts

  • The fee simple estate in some business premises were purchased from a business by its directors, but no formal conveyance was executed
  • The directors then granted a lease out of the purchased fee simple estate to AEI
  • AEI breach their covenant to keep the premises in good repair

Issue

  • Could the covenant be enforced?

Decision

  • Yes

Reasoning

  • As the sale of the fee simple estate was not formally completed, the doctrine of Walsh v Lonsdale (1882) could operate twice, first on the sale of the fee simple estate, and then on the lease (defective due to a lack of legal estate to grant from)
  • The covenant was then enforceable
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