Pennistone Holdings Ltd v Rock Ferry Waterfront Trust
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice Coulson,Lord Justice Dingemans |
| Judgment Date | 09 July 2021 |
| Neutral Citation | [2021] EWCA Civ 1029 |
| Docket Number | Case No: A3/2020/1841 |
| Court | Court of Appeal (Civil Division) |
[2021] EWCA Civ 1029
Lord Justice Lewison
Lord Justice Coulson
and
Lord Justice Dingemans
Case No: A3/2020/1841
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN LIVERPOOL
PROPERTY TRUSTS AND PROBATE LIST (ChD)
HIS HONOUR JUDGE HODGE QC (sitting as a Judge of the High Court)
F04B1050
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr John de Waal QC (instructed by MSB Solicitors) for the Appellant
Mr Richard Oughton (instructed by Johnson and Boon Limited) for the Respondent
Hearing date: 1 st July 2021
Approved Judgment
Introduction
The issue on this appeal is whether Rock Ferry Waterfront Trust (“Rock Ferry”) is entitled to possession of the former Vestor Oil Site at Bedford Road East, Birkenhead. Pennistone Holdings Ltd (“Pennistone”), which claimed to be in actual occupation of the land, counterclaimed for a declaration that it was entitled to be registered as sole proprietor of the land; and an order directing the Land Registry to alter the register so as to give effect to this on the footing that the register required to be updated.
HH Judge Hodge QC, sitting as a judge of the High Court, held that the claim to possession succeeded and the counterclaim failed, because Pennistone was not in actual occupation of the land. With the permission of Nugee LJ, Pennistone appealed on limited grounds. Rock Ferry raised certain points that failed before the judge by way of Respondent's Notice.
At the conclusion of the argument on the points raised in the appeal, we announced that the appeal would be dismissed, with reasons to follow. These are my reasons for joining in that decision.
The facts
I can take the facts from the judge's judgment.
Between 2002 and 2012 the registered proprietor of the land was a Seychelles company, Metropolitan Investments Ltd, of which Mr Denis Murphy was the ultimate beneficial owner and controller. By a transfer dated 15 June 2012, and registered on 18 June 2012, Metropolitan Investments transferred the land to a company incorporated in the Isle of Man, called Toluca Ltd. The consideration expressed in the transfer was a nominal sum of £1. Mr Murphy was not a director or a direct shareholder of Toluca Ltd but he was indirectly the ultimate beneficial owner and controller of that company.
On 17 November 2015 a transfer was executed whereby Toluca Ltd transferred its registered title to Pennistone. The consideration expressed in the transfer was £2,750. The judge found that the transfer was “properly executed and genuine”. At the trial, it was common ground that the stated consideration was paid. Pennistone deliberately failed to register the transfer. The reason for the non-registration was because Mr Murphy did not want the land to appear to be owned by any company in this country which was owned and/or controlled by him. That was because of the potential environmental and contamination issues and liabilities affecting the land by virtue of its status as a former oil site. Nevertheless, the judge held that the transfer took effect in equity, with the result that Pennistone became entitled to the equitable interest in the freehold.
On or about 4 September 2016, Toluca Ltd was dissolved in accordance with the laws of the Isle of Man. As a result, the title to the land passed by escheat to the Crown.
By a transfer dated 25 April 2019, the Crown transferred the land to Rock Ferry for £5,000. The transfer contained the following recitals:
“(1) Immediately before its dissolution, as mentioned below, Toluca Ltd (‘the Company’) was the registered proprietor with freehold title absolute of the premises comprised in the registered title and the former title registered under the former title number and shortly known as Land and Buildings Pier Extension and Pier Head at the site of the slipway at Rockferry
(2)(a) The Company was incorporated as a company under the laws of the Isle of Man
(2)(b) On 4 September 2016 notice was given by the General Registry of the Isle of Man Government that the Company had been struck off the Register of Companies and was dissolved
(3) It is apprehended that the said premises thereupon became subject to escheat to Her Majesty
(4) The Commissioners have agreed with the Purchaser for the sale to the Purchaser in manner hereinafter appearing of such fee simple estate in respect of the said premises subject to escheat as Her Majesty may now be able to grant the property for the sum mentioned below
(5) The Commissioners have at no time prior to the date of this transfer taken possession or control of the said premises or entered into occupation thereof or effected any actual or presumed acts of ownership or management in regard thereto.”
Clause (1) provided that, in consideration of £5,000, the Commissioners, to the extent that they were able to do so, transferred the property to Rock Ferry with no title guarantee. Clause (2) provided that this was:
“Subject to so far as affecting the Property or any part thereof and so far as now subsisting and capable of being enforced and whether legal or equitable and whether or not subsisting at the date of the said dissolution above referred to or arising thereafter All if any: (a) estates and interests… (p) interests rights obligations encumbrances outgoings burdens or encumbrances of whatsoever nature not mentioned above and whether or not similar to anything mentioned above.”
That Crown transfer was duly registered at the Land Registry under a new title number which was said to have been created on 24 May 2019. Pennistone claimed to have been in actual occupation of the land on that date. That was the main issue for the judge to decide.
Mr Robertson, an old friend of Mr Murphy's father, had been asked by Mr Murphy to look after the yard. He was an unpaid caretaker, keeping an eye on the land. Although he had a car, he never drove it on to the land. In the daytime he parked right outside the gate to the yard, and at night-time he parked in the bushes along the public roadway. The only repairs he carried out to the site had been to stop people getting in to the yard. He was just there to look after the yard and check that no one was smashing the fence. The judge found that Mr Robertson had exaggerated the extent of his activities in relation to the land. In his summary of findings of fact at [36] he said:
“I cannot accept that Mr Robertson visited the site as frequently as he claimed because it is inconsistent with the fact that (as I find) the digital combination padlock which was fitted by Mr Renshaw on 6 December 2018 was still in place three weeks later, on 29 December 2018. I find that when Mr Robertson visited the site at night, he merely observed it from bushes in the neighbouring road. He did not park on the site. I find that he must have visited less often than he told the Court.”
Mr Murphy claimed that Pennistone had spent considerable amount of money on carrying out works to the land. But the judge rejected that evidence; and found that Pennistone had carried out no work on the land in 2018 or 2019.
Rock Ferry's chairman, Mr Renshaw, was in contact with Mr Murphy with a view to buying the land. Their discussions came to nothing; but Mr Renshaw eventually discovered that the land had been transferred to Toluca and that Toluca had been dissolved. It was that that prompted him to approach the Crown.
Mr Renshaw visited the site in November 2018. The site was enclosed by a security fence, which the judge found had been in place for nearly 20 years, although some alterations and repairs to it had been carried out to it at some time before 2016. Mr Renshaw discovered that there was an old Toluca padlock on the gate. On 6 December 2018, accompanied by a locksmith, he removed that padlock and replaced it with one of his own. The padlock remained in place until at least 28 December. On completion of the Crown transfer in April 2019 Mr Renshaw visited the site again. He discovered that his padlock had been removed and replaced by a new padlock. But the new padlock did not work, which left the gate unlocked. On 27 April 2019 Mr Renshaw placed a new padlock on the gate. On 24 May 2019 the Crown transfer was registered at the Land Registry.
Following the registration Mr Renshaw's padlock was once again removed.
At the time of the registration the only physical presence on the land was an abandoned and immovable digger; and two shipping containers which also appeared to have been abandoned. There was no indication on the digger or the containers that they belonged to Pennistone. The containers were being used by Mr Robertson to store some tools and other equipment; but they were his own tools rather than Pennistone's. Pennistone had no use for the land, and it simply allowed Mr Robertson to do whatever he chose on the land in return for keeping an eye on the place and deterring intruders.
The judge found that that did not amount to “actual occupation” of the land by Pennistone.
Escheat
Escheat is one of the last relics of feudal law. It is based on two propositions: (a) that all land in England is held of the Crown and (b) that no land can be without an owner. The first of these reflects the basic principle of tenure; namely that all land in England is owned by the Crown and that at some point in the past the Crown granted that land to a feudal tenant in chief. If the granted interest comes to an end, the land reverts to...
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