MacLeod v Gold Harp Properties Ltd

JurisdictionEngland & Wales
JudgeLord Justice Underhill,Lord Justice Sullivan,Lord Justice Richards
Judgment Date29 July 2014
Neutral Citation[2014] EWCA Civ 1084
Docket NumberCase No: B2/2013/1629
CourtCourt of Appeal (Civil Division)
Date29 July 2014

[2014] EWCA Civ 1084

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM CENTRAL LONDON COUNTY COURT

HH JUDGE GERALD

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Richards

Lord Justice Sullivan

and

Lord Justice Underhill

Case No: B2/2013/1629

Between:
Gold Harp Properties Ltd
Appellant
and
MacLeod & Others
Respondents

Mr Philip Brown (instructed by Direct Access) for the Appellant

Ms Kerry Bretherton and Mr Robert Bowker (instructed by Coles Miller Solicitors LLP) for the Respondents

Hearing date: 13 May 2014

Lord Justice Underhill

INTRODUCTION AND OUTLINE FACTS

1

This is an appeal against a decision of HHJ Gerald, dated 24 May 2013, in the Central London County Court, requiring the alteration of Land Registry titles relating to a property in North Kensington known as 72–74 St. Quintin Avenue, London W10 ("the Property"). Mr Philip Brown appears for the Appellant, and Ms Kerry Bretherton and Mr Robert Bowker for the Respondents. In order to explain the order which the Judge made, and the issues raised by the appeal, I need first to give an outline of the facts.

2

The Property consists of a three-storey house. Freehold title is registered under number BGL70889. The top floor, which has been referred to in these proceedings as "the roofspace", has never been converted for occupation.

3

The Property was acquired in 1988 by a group of teachers – a Mr and Mrs Jessel and the First and Second Claimants, Mr Byrne and Mr Briars (to whom I will refer as "the Claimants", though in fact their attorneys are also formally parties), with a view to its redevelopment into four flats – one each on the ground and first floors and two in the roofspace – which would provide teaching and accommodation facilities for autistic children. Four 135-year leases were created accordingly, the two Claimants each becoming tenant of half of the roofspace, for which they each paid £29,950.

4

By a sequence of events into which I need not go, Mr and Mrs Jessel lost the title to the two lower floors, which were in 1999 acquired by a company owned and controlled by a Mr Grahame Ralph, the Fifth Defendant, who is a property developer. Those floors were converted into four flats. The Claimants retained title to their respective parts of the roofspace, which were designated as "flats 5 and 6". As part of that sequence of events fresh leases were entered into in 2000 in respect of those flats, with terms of 135 years running from 1988. The registered titles were numbers BGL36978 (flat 6) and BGL36979 (flat 5). Both leases were entered on the schedule of notices of leases relating to the freehold title (i.e. BGL 70889), to which I will refer as "the Leases Schedule".

5

The roofspace continued unoccupied and unconverted. The Claimants work, and live for most of the time, in Africa; but their interests were represented by agents in London. Mr Ralph coveted the opportunity to develop the top floor. On the Judge's findings – which indeed reflect his own candid admissions in evidence – he orchestrated a sequence of events which he hoped would enable him to acquire the roofspace without having to make any payment to the Claimants. The Judge found that Mr Ralph was aware that "the Claimants … and their agents were somewhat unworldly folk, not well attuned to defeating attempts to take their property".

6

Mr Ralph's plan developed as follows. On 13 February 2009 his son Matthew, the First Defendant, acquired the freehold of the Property. On the Judge's findings, Matthew Ralph, whether or not technically a nominee for his father, operated entirely at his behest. The next payment of ground rent in respect of the roofspace, £50 for each "flat", was payable on 25 March 2009. Payment was not made on the due date, and on 4 June Mr Ralph instructed a firm of bailiffs to effect a formal re-entry (though since the lease provided for re-entry only when the rent was more than three months in arrears any lawful re-entry could not be before 26 June). On the same date he made an application for planning permission in respect of the roofspace.

7

In ignorance of these developments the Claimants did, albeit belatedly, tender payment of the ground rent, by cheque payable to Mr Ralph junior, which was sent to him by post at his father's address (which was the only address of which they had notice) on 11 June. Mr Ralph senior was aware of the receipt of the cheque, but he took no steps to forward it to his son.

8

On 27 July 2009 Mr Ralph junior made a statutory declaration to the effect that the Claimants' leases had been determined by peaceable re-entry following non-payment of the rent: he exhibited a letter from the bailiffs claiming to have re-entered on that very day. To anticipate, the Judge found that no re-entry had in fact taken place; and that is accepted before us. On 30 July an application was made to the Land Registry for the closure of titles BGL36978 and BGL36979 on the basis of the forfeiture of the leases to which they related. The application was granted and the Register was amended accordingly on 5 August. At the same time, and most pertinently to this appeal the Registrar amended the Leases Schedule by removing reference to the leases.

9

In the meantime a long lease of the whole of the roofspace had been granted by Mr Ralph junior to a company called Insignia Property Ltd, the Third Defendant, apparently for a premium of £5,000: I will refer to this as "the new lease". The sole director of Insignia was a Mr Qayoumi, a business associate of Mr Ralph senior. Title in respect of that leasehold interest was registered with effect from 2 September 2009, with the number BGL72632. The new lease was entered on the Leases Schedule. On 28 February 2010 Insignia assigned the new lease to a company called Lavender Estates Ltd, the Fourth Defendant, for, apparently, £10,000. Lavender on the same day assigned it on to Gold Harp Properties Ltd, the Second Defendant and the Appellant before us, apparently for £150,000: Gold Harp was also the intermediary lessee of the Property. Both Lavender and Gold Harp are owned and controlled by Mr Ralph senior.

10

I have referred to the "apparent" premium/ price of each of the transactions in relation to the new lease because the Judge observed that no evidence had been produced that any money in fact changed hands. He said, at paragraph 28 of his judgment:

"In my judgment, when viewed in that light together with the evidence of Grahame Ralph and what in actual fact happened or did not happen on the 27 th July 2009, it is right to find and conclude that Grahame Ralph was the mastermind or orchestrator of not only the enfranchisement of the freehold, which strictly is not directly relevant to the issues I have to determine but forms part of the background, but also to closure of the leases and, there being no evidence that actual money changed hands from Insignia to Matthew Ralph and then from Lavender to Insignia and then from Gold Harp to Insignia and that it was Grahame Ralph who was the person instructing all parties' solicitor Christopher Evans, that in reality it is right to find that all transactions were orchestrated by and linked by the common thread of Grahame Ralph."

That passage does not contain an explicit finding that no money changed hands (as opposed to simply that there was no evidence that it had); but in the subsequent judgment to which I refer at para. 15 below the Judge made it clear that that was indeed his finding and the appeal proceeded before us on that basis.

THE PROCEEDINGS

11

The Claimants commenced proceedings in the County Court in August 20They sued by their attorneys, Messrs Gibbons and MacLeod (who are the Third and Fourth Claimants). Initially the only defendants were Mr Ralph junior and Gold Harp. The claim form and the Particulars of Claim as originally pleaded claimed relief from forfeiture and damages for trespass and wrongful forfeiture. It was decided that there should be a trial of a preliminary issue as to whether the Claimants' leases over the roofspace had indeed been properly forfeited.

12

That issue was tried before Judge Gerald on 18 and 19 March 2013. Mr Bowker and Mr Brown appeared for the Claimants and the Defendants respectively. By a reserved judgment dated 22 March the Judge held that the bailiffs had not effected a physical entry on 27 July 2009. He further found that even if there had been a physical entry on that date it would not have given rise to a forfeiture because the Claimants' tender of the rent on 11 June had been effective. The finding that there had been no forfeiture of the Claimants' leases was recorded in the recital to an order of the same date. The Claimants were given permission to amend to plead a claim for rectification of the Register and for damages for slander of title (though the latter claim has not been proceeded with). The Claimants were given permission to join Insignia and Lavender as further defendants. They also applied to join Mr Ralph senior for the purpose of applying for a costs order against him; that application was adjourned.

13

The trial of the rectification issue took place on 24 May 20Mr Bowker again appeared for the Claimants. Mr Brown appeared for both the original Defendants and Lavender. Mr Qayoumi appeared in person on behalf of Insignia. Judge Gerald in an ex tempore judgment decided that the Register should be rectified. His order dated 28 May 2013 reads (so far as relevant):

"1. HM Land Registry Title numbers BGL36979 and BGL36978 be reinstated and re-opened as if neither had ever been closed.

2. HM Land Registry Title number BGL70889 be altered or rectified so...

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5 cases
  • Simer Kaur Dhillon v Barclays Bank Plc
    • United Kingdom
    • Chancery Division
    • 12 Marzo 2019
    ...B as proprietor and thus should be treated as part and parcel of the same mistake; and Macleod v. Gold Harp Properties Limited [2014] EWCA Civ 1084 [2015] 1 WLR 1249 per Underhill LJ at para. 85 where, having conducted a comprehensive review of all the relevant authorities including a num......
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    ...applied to the subsequent entries of successor in title, the 2–4 Defendants as appropriate. He referred me in particular to MacLeod v Gold Harp Properties Ltd [2015] 1 WLR 1249 (CA), at [93] and [95] per Underhill LJ on the basis that he decided this was the position because the law under ......
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    • United Kingdom
    • Chancery Division
    • 2 Marzo 2018
    ...Building Society v Hammond (1985) 49 P&CR 148 (CA) — and the closure of a leasehold title on the basis of a void forfeiture — MacLeod v Gold Harp Properties Ltd [2015] 1 WLR 1249 (CA)). I was also referred to the very useful commentary in Ruoff & Roper: Registered Conveyancing at 46.024–46.......
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    • United Kingdom
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    • 15 Mayo 2020
    ...extent of the court's powers to order rectification under Schedule 4 is the decision of the Court of Appeal in MacLeod v Gold Harp [2015] 1 WLR 1249 (CA) (“ Gold Harp”). In Gold Harp, the claimants held leases of two top floor flats, the titles to which were closed at the Land Registry on ......
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1 books & journal articles
  • Rectification of the Register – Prospective or Retrospective?
    • United Kingdom
    • The Modern Law Review No. 78-2, March 2015
    • 1 Marzo 2015
    ...in Property and Environmental Law, Department of Land Economy, University ofCambridge.1Gold Harp Properties vMcLeod & Others [2014] EWCA Civ 1084.2ibid at [97].3ibid at [94].4ibid at [94].bs_bs_bannerEmma Lees© 2015 The Author. The Modern Law Review © 2015 The Modern Law Review Limited. 361......

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