Shiloh Spinners Ltd v Harding
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE RUSSELL,LORD JUSTICE SACHS,LORD JUSTICE BUCKLEY |
| Judgment Date | 10 February 1971 |
| Judgment citation (vLex) | [1971] EWCA Civ J0210-1 |
| Date | 10 February 1971 |
| Court | Court of Appeal (Civil Division) |
[1971] EWCA Civ J0210-1
Lord Justice Russell
Lord Justice Sachs and
Lord Justice Buckley
In The Supreme Court of Judicature
Court of Appeal
Appeal of defendant from order of The Vice-Chancellor dated 9th February, 1970
Mr. A.J. BALCOMBE, Q.C., Mr. A.B. KEENAN and Miss MEGARRY (instructed by Messrs. Frederick Howarth Son & Maitland) appeared on behalf of the Appellant Defendant.
Mr. R.A. MORRITT (instructed by Messrs. John Taylor & Co.) appeared on behalf of the Respondent Plaintiffs.
The predecessors in title of the plaintiffs were granted two long leases of adjoining properties. On the two properties were built (inter alia) a mill known as Shiloh No. 2 mill. In 1961 the plaintiffs, for a consideration of £25,000, assigned their leasehold interest in part of the two properties, comprising Shiloh No. 2 mill to Thornber Bros. Ltd. The leasehold interest assigned was created partly by one of the two leases and partly by the other. The plaintiffs retained the leasehold interest in the rest of the land comprised in the two leases. The East wall of Shiloh No. 2 mill abutted on a covered roadway: this way was retained by the plaintiffs in 1961, together with buildings on the other side of and over the way. At one point over the way was a tower known as the Lavatory Tower which afforded on its top three floors lavatory accommodation for No. 2 mill, having doorways into those floors from the corresponding floors of No. 2 mill. The assignment of 1961 included those floors of the Lavatory Tower. On the ground floor in the East wall of No. 2 mill were two doorways giving access to the retained roadway. From the roadway there were two sets of stairs leading to the plaintiffs' retained buildings above and to the east of the roadway: one indeed lead up past one of the two doorways just mentioned.
The 1961 assignment contained covenants by Thornbers which, so far as presently relevant related to (i) fencing boundaries common to the retained and assigned land; (ii) keeping the top three floors of the Lavatory Tower in repair so as to afford support and protection to retained buildings; (iii) bricking up the two doorways into the covered roadway; and (iv) not diminishing the supportand protection then afforded by any part of the assigned premises to the retained premises. There was also reserved a right to the plaintiffs, on a failure to observe the assignees' stipulations, to re-enter and retake the assigned property as though the assignment had never been made.
In 1965 Thornbers sold their interest under the assignment to the defendant for £8,000. Certain things were not done which were required to be done under the stipulations I have mentioned: certain things were done which were required not to be done there under.
There is, of course, neither privity of estate nor privity of contract between plaintiff and defendant. So far as the stipulations are positive this means that they do not bind the defendant. So far as the stipulations are negative they were not registered under the Land Charges Act 1925 as class (ii) land charges, and for that reason do not bind the defendant. Moreover the assignment of 1961 exonerates Thornbers from liability under any of the stipulations once Thornbers had parted (as they did in 1965) with all interest to the Defendant. Accordingly neither Thornbers nor the defendant can be sued by the plaintiffs for breach of an; of the stipulations contained in the 1961 assignment.
In those circumstances the following questions arise for decision.
(1) Is the right of re-entry unenforceable because it was not registered as a land charge class C (iv) or D(iii) under the Land Charges Act 1925? This depends upon whether it was so registrable.
(2) If it was not so registrable, is a right of re-entry such as this in any event enforceable when no one is liable to be directlysued on the covenants for a failure to perform or observe the stipulations contained in the 1961 assignment?
(3) If the answer to the first question is "No", and to the second question is in principle "Yes", is the right of re-entry in this case, on the true construction of the 1961 assignment, enforceable?
(4) If the answer to the first question is "No" and to the second and third questions is "Yes" - can there and if so should there be an order relieving the defendant from the forfeiture of his assigned leasehold interest involved in the provision for re-entry?
The Vice-Chancellor of the County Palatine of Lancaster from whose decision the defendant appeals, answered those questions thus: -
(1) No: the right of re-entry was not registrable as a class (iii) land charge; it was not argued before him that it might be registrable as a class C (iv) land charge; in this Court the suggestion that it might be so registrable emanated from the Court, and, perhaps in those circumstances not surprisingly, leave to take the new point was given with provisional reservations on the impact on costs should that be the one point upon which the defendant should prove successful.
(2) Yes.
(3) Yes.
(4) Relief from forfeiture ought not to be granted.
It is from those conclusions that the defendant appeals.
It is appropriate at this stage to set out the details of the 1961 assignment in so far as it involved the covenants by the assignee (Thornbers) and the rights of re-entry.
Page 21, clause 5: "FOR the benefit and protection of thepremises comprised in the First Lease and the Second Lease (other than the premises hereby assigned) and so as to bind so far as may be the premises hereby assigned into whosoever hands the same may come the purchaser hereby coven ants with the vendor that the purchaser and the persons deriving title under it will at all times hereafter observe and perform the stipulations set out in the first part of the Third Schedule hereto but so that the purchaser shall not be liable for a breach of this coven ant occurring on or in respect of the premises hereby assigned after it shall have parted with all interests therein".
At page 22, clause 7(a): "If at any time during the lifetime of the last survivor of the descendants now living of His Late Majesty King George V and twenty-one years after the death of such last survivor or during such further period (if any) as shall not infringe the law against perpetuities there shall be any failure to perform or observe any of the covennants herein contained implied or referred to on the part of the purchaser then and in every such case and notwithstanding the waiver of any previous default it shall be lawful for the vendor or the owner or owners for the time being of the premises comprised in the First Lease and the Second Lease not hereby assigned at any time or times during the periods aforesaid into and upon the premises hereby assigned or any part thereon in the name of the whole to re-enter and to hold the same for their own absolute use and benefit as if this deed had not been made but without prejudice to any right of action or remedy in respect of any antecedent breach of any of the covenants by the purchasers herein contained implied or referred to".
At page 29-30 (a), (c), (e), (f). Stipulations contained in the Third. Schedule presently relevant were as follows:
"(a) To fence off with a substantial post and chain link fence the premises hereby assigned from the property retained by the vendor except where already fenced and except along the joint right of way coloured brown on the said plan annexed hereto and thereafter to keep all boundary fences in good and substantial repair and condition and when necessary replace the same with others of a like nature".
"(c) To keep in good and substantial repair and condition the said second third and fourth storys of the Lavatory Block and the said Ashes Hopper both coloured blue on the said plan annexed hereto so as to protect and support the vendor's adjoining property Provided that nothing in this clause contained shall prevent the removal of the said Ashes Hopper in such a way as not to take away the protection and support of the adjoining property of the vendor."
"(e) To brick up to the satisfaction of the vendor the openings leading from the premises hereby assigned to the retained premises".
"(f) Not to lessen or diminish the support or protection now given or afforded by all parts of the premises hereby assigned to the retained premises".
I take first the question whether the right of re-entry was registrable as a class (iii) land charge and consequently not enforceable for want of such registration. Section 10(1) of the Land Charges Act 1925 provides that the following classes of "charges on or obligations affecting land" may be registered: class is headed "A Charge or obligation affecting land of anyof the following kinds, namely,……(iii) Any easement right or privilege over or affecting land created or arising after the commencement of this Act, and being merely an equitable interest (in this Act referred to as an "equitable easement")." For the appellant it is contended that the right of re-entry, which is an equitable interest in the land assigned, is a "right over or affecting land". The Vice-Chancellor in rejecting this contention referred to substantially the same phrase used in the Law of Property Act 1925, section 1(2), where the only interests which under the new dispensation could exist at law in or over land are "(a) An easement, right, or privilege in or over land for an interest equivalent to an estate in fee simple absolute in possession or term of years absolute………(e) Rights of re-entry exercisable over or in respect of a legal term of years absolute, or annexed for any purpose to a legal rent charge". The phrase in (a) plainly did not embrace such...
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