Clayhope Properties Ltd v Evans
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,LORD JUSTICE NICHOLLS,LORD JUSTICE LLOYD |
| Judgment Date | 07 May 1986 |
| Judgment citation (vLex) | [1986] EWCA Civ J0507-6 |
| Docket Number | 86/0461 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 May 1986 |
[1986] EWCA Civ J0507-6
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR. JUSTICE GOULDING)
Royal Courts of Justice.
Lord Justice Dillon
Lord Justice Lloyd
and
Lord Justice Nicholls
86/0461
CH. 1984 C. No. 3729
MR. JOHN MOWBRAY, Q.C. and MR. ROGER COOKE (instructed by Messrs. Bernstein & Co.) appeared on behalf of the Appellants.
MR. PATRICK GROUND, Q.C. and MR. ANTHONY PADMAN (instructed by Messrs. Zelin & Zelin) appeared on behalf of the Respondents.
I will ask Lord Justice Nicholls to give the first judgment.
This appeal raises some points on the construction of the Land Registration Act 1925 and the Land Charges Act 1925. The plaintiff in the present proceedings, Clayhope Properties Limited, is the registered proprietor of a freehold block of flats known as 1–20 Dover Mansions, Canterbury Crescent, Brixton, London, S.W.9. Some of the flats are let on long leases and others are subject to statutory tenancies. The first defendant, Mr. Evans, is a statutory tenant and the second defendant, Mrs. Jennings, is the owner of a lease.
In 1983 the property was in a state of disrepair, and by a writ issued on the 12th July, 1983 Mr. Evans, suing on behalf of all tenants of the property, commenced an action against Clayhope claiming damages, specific performance and other relief in respect of alleged breaches by Clayhope of the repairing covenants. On the 4th November, 1983 the master made an order appointing as receiver a Mr. Johnson, he being replaced by Mr. Richard Denis Collins by a further order made on the 9th February, 1984. The material part of the latter order reads as follows:
"THE COURT APPOINTS Richard Denis Collins (hereinafter called the Receiver) of 107/109 Lewisham High Street London SE13 6AT Chartered Surveyor to receive the rents and profits and other moneys payable under the leases of 20 Flats in Dover Mansions Brixton London SW9 and to manage the same in accordance with the rights and obligations of the Defendant the reversioner thereof
AND IT IS ORDERED
1. that the tenants of the said flats do pay their rents in arrear (if any) and growing rents to the said Receiver
2. that the Receiver is to be at liberty to receive any grants payable in respect of Dover Mansions aforesaid from any Local Authority and to give a good receipt therefor
3. that the Receiver do each month report to the Defendant on the progress of his receivership and managership
4. that the Receiver do submit his accounts to the Plaintiff and the Defendant on like dates as the said William Arthur Johnson that is to say six monthly intervals commencing on 4th May 1984 and subsequently thereon 4th November and 4th May of each year."
That action has not yet come to trial. Apparently pleadings are closed, but by agreement between the parties no further steps are being taken at present to proceed to trial.
Mr. Johnson lodged a caution against the property under the Land Registration Act in respect of the order appointing him. Subsequently Mr. Collins did likewise. Both these cautions were later withdrawn. Mr. Collins, apparently, did not wish to become involved in litigation on the question of whether such a caution was properly registrable by him. So Mr. Evans, the plaintiff in the breach of covenant action, himself lodged a caution against the property on the 2nd April, 1984.
Clayhope objected, contending that this was unauthorised by the legislation. Mr. Evans, in turn, objected to the removal of the caution, saying that he wished to avoid seeing the freehold sold, because such a sale would frustrate the intention of the court in appointing a receiver (namely, to have the property put into repair, that Clayhope wished to sell the freehold so as to divest itself of a tangible asset and then dissipate the proceeds in order to have no money to satisfy any judgment, and that such a sale would constitute an interference with the receiver and usurp the authority of the court.
By an originating summons issued on the 2nd August, 1984 Clayhope sought an order for the removal of the caution from the register. On the 29th January, 1985 Mr. Justice Goulding dismissed the proceedings, and this appeal is from that decision.
It will be convenient if I refer at this stage to the relevant legislation. Section 54 of the Land Registration Act 1925, which is the primary authority for the registration of cautions against dealings, provides in subsection (1) as follows:
"Any person interested under any unregistered instrument, or interested as a judgment creditor, or otherwise howsoever, in any land or charge registered in the name of any other person, may lodge a caution with the registrar to the effect that no dealing with such land or charge on the part of the proprietor is to be registered until notice has been served upon the cautioner: Provided that a person whose estate, right, interest or claim has been registered or protected by a notice or restriction shall not be entitled (except with the consent of the registrar) to lodge a caution in respect of such estate, right, interest or claim, but this provision shall not operate to prevent an incumbrancer or assignee of a life interest, remainder, reversion or executory interest, from lodging a priority caution in a specially prescribed form."
The effect of lodging such a caution is set out in section 55 (1):
"After any such caution against dealings has been lodged in respect of any registered land or charge, the registrar shall not, without the consent of the cautioner, register any dealing or make any entry on the register for protecting the rights acquired under a deposit of a land or charge certificate or other dealing by the proprietor with such land or charge until he has served notice on the cautioner, warning him that his caution will cease to have any effect after the expiration of the prescribed number of days next following the date at which such notice is served; and after the expiration of such time as aforesaid the caution shall cease unless an order to the contrary is made by the registrar, and upon the caution so ceasing the registered land or charge may be dealt with in the same manner as if no caution had been lodged."
Thus, unless he consents to a dealing being registered, the cautioner has to be given notice of any intended dealing to give him an opportunity of preventing it being registered. Section 59 (1) of the Land Registration Act reads as follows:
"A writ, order, deed of arrangement, pending action, or other interest which in the case of unregistered land may be protected by registration under the Land Charges Act 1925 shall, where the land affected or the charge securing the debt affected is registered, be protected only by lodging a creditor's notice, a bankruptcy inhibition or a caution against dealings with the land or the charge."
Subsection (5) reads:
"The foregoing provisions of this section shall apply only to writs and orders, deeds of arrangement, pending actions and land charges which if the land were unregistered would for purposes of protection be required to be registered or re-registered after the commencement of this Act under the Land Charges Act 1925; and for the purposes of this section a land charge does not include a puisne mortgage."
Section 6 of the Land Charges Act 1925 concerns registration in the register of writs and orders. Subsection (1) reads:
"There may be registered in the register of writs and orders—
(a) any writ or order affecting land issued or made by any court for the purpose of enforcing a judgment, statute or recognizance, whether obtained on behalf of the Crown or otherwise, or for the purpose of enforcing any inquisition finding a debt due to the Crown, or any obligation or specialty made to the Crown;
(b) any order appointing a receiver or sequestrator of land;
(c) any receiving order in bankruptcy made after the commencement of this Act, whether or not it is known to affect land."
Subsection (2) reads:
"Every entry made pursuant to this section shall be made in the name of the estate owner or other person whose land, if any, is affected by the writ or order registered."
And section 7 (1):
"Every such writ and order as is mentioned in the last preceding section, and every delivery in execution or other proceeding taken pursuant to any such writ or order, or in obedience thereto, shall be void as against a purchaser of the land unless the writ or order is for the time being registered pursuant to this Part of this Act:
Provided that as respects a receiving order in bankruptcy, this subsection only applies in favour of a purchaser of a legal estate in good faith, for money or money's worth, without notice of an available act of bankruptcy."
The thrust of the case in favour of lodging the caution accepted by Mr. Justice Goulding can be stated shortly. Section 59 of the Land Registration Act manifests a clear intention that every writ and order, which in the case of unregistered land may be registered in the register of writs and orders affecting land, may in the case of registered land be protected by a caution against dealings. One such order, under...
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