Rother District Investments Ltd v Corke and Others
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Lightman,Mr Justice Lightman |
| Judgment Date | 20 January 2004 |
| Neutral Citation | [2004] EWHC 14 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: BN200319 |
| Date | 20 January 2004 |
[2004] EWHC 14 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
ON APPEAL FROM THE BRIGHTON COUNTY COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Lightman
Case No: BN200319
Mr Christopher Wilson (instructed by Dean Wilson Laing, 96 Church Street, Brighton, Sussex BN1 1UJ) for the Claimant
Mr Corke appeared in person
The second and third defendants did not appear and were not represented
Hearing dates : 3 rd December 2003
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
INTRODUCTION
I have before me an appeal by the Claimant Rother District Investment Limited ("Rother") from the judgment of HH Judge Michael Kennedy QC dated the 10 th May 2003 on a preliminary issue of law. That preliminary issue raises the question of the legal effect of a purported peaceable re-entry and forfeiture of a lease by a purchaser of the reversion prior to registration of the purchaser as proprietor at HM Land Registry.
FACTS
The facts can be stated quite shortly. On the 3 rd August 1985 Mountfield Developments Limited ("Mountfield"), the registered proprietor of the freehold title to the property known as Hanover House, Marine Court, St Leonard's on Sea, East Sussex ("the Property"), granted a head lease ("the Head Lease") of the Property to Albany Life Assurance Company Limited ("Albany"). The title to the Head Lease was registered at HM Land Registry and Albany were duly registered as proprietor. Albany subsequently transferred the Head Lease to Cradle Port Limited ("Cradle") and Cradle was duly registered as proprietor. On the 22 nd August 1989 Cradle granted a sublease ("the Sublease") of part of the Property ("the Demised Premises") back to Mountfield. The title to the Sublease was not registered. On the 22 nd December 1992 Cradle transferred the Head Lease to Tambarella Limited ("Tambarella") and Tambarella was duly registered as proprietor.
Early in 1994 Mountfield sold and transferred the freehold title to the Property to Rother and Rother was registered as proprietor. On the 2 nd August 1994 Mountfield transferred the Sublease to the First and Second Defendants who thereafter carried on a partnership business at the Demised Premises. The Third Defendant was subsequently admitted as a partner and later took over the business as principal. For the purpose of this judgment it is unnecessary to distinguish between the three Defendants and I shall refer to them as "the Defendants".
On the 15 th March 1999 Tambarella executed a transfer on sale of the Head Lease to Rother, but Rother was not registered as proprietor at HM Land Registry. In consequence the legal title did not pass, but Rother was not aware of this.
At some date prior to the 18 th July 2000 the Defendants ceased to occupy the Demised Premises each of them assuming that one or more other of them was alone responsible for the performance of any obligations under the Sublease. Sums (and in particular rent) became payable by the Defendants (or one or more of them) under the covenants of the Sublease to Tambarella and were unpaid. By reason of these breaches of covenant the Sublease became liable to forfeiture and on the 18 th July 2000 Rother purported peaceably to re-enter and forfeit the Sublease and take steps to re-let the Demised Premises. On the 20 th November 2000 Rother granted a new sublease of the Demised Premises to a new tenant who has remained in possession ever since. The Defendants were not aware of these actions.
In 2000 Rother commenced proceedings against the Defendants for sums due under the Sublease. The Defendants put Rother to proof of its title. In consequence on the 19 th December 2001 Rother discovered that its title to the Head Lease was not registered. It accordingly applied for registration and was duly registered on the 31 st December 2001. Rother discontinued its existing proceedings and commenced fresh proceedings (being the present proceedings) on the 15 th January 2002. On the 15 th March 2002, an order was made that all steps in the earlier proceedings should stand as steps in the present proceedings and for service of a defence. The First Defendant filed his defence on the 6 th April 2002. On the 22 nd May 2002 directions were given for the trial of the preliminary issue.
THE ISSUE
At issue in these proceedings is the entitlement of Rother to recover from the Defendants as tenants under the Sublease sums due in respect of the period prior to the date that Rother took possession. Rother concedes that the Defendants must have a defence to any claim in respect of the period after it took possession. At the very least the Defendants must be entitled to claim against Rother or set-off as damages for trespass a sum equal to the rent reserved by the Sublease. Rother however claims payment in respect of the prior period when the Sublease on any basis must have continued to subsist and the Defendants were tenants and in possession (if not in occupation).
The transfer of the Sublease to Rother included no express assignment of the right to accrued arrears of rent or other sums due under the Sublease and accordingly the right to such sums remained vested in Tamborella unless they passed to Rother under section 141 of the Law of Property Act 1925. The right passed, and only passed, to Rother under that section if the Sublease continued in force when the legal title to the leasehold reversion (i.e. the Head Lease) vested in Rother. The legal title only vested on the registration of the Head Lease in Rother on the 31 st December 2001. The preliminary issue of law raised for determination on this application is whether the acts of Rother in taking possession, purporting to forfeit the Sublease and granting the new Lease brought the...
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...parties constitutes a tenancy that gives rise to an estoppel and not the other way round. 52 In Rother District Investments v. Corke [2004] E.W.H.C. 14 (Ch.) , it was held that a forfeiture by a new landlord before it had registered its title was valid. As that case concerned a preliminary ......
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