Shiloh Spinners Ltd v Harding (A.P.).
| Jurisdiction | UK Non-devolved |
| Judge | Lord Wilberforce,Viscount Dilhorne,Lord Pearson,Lord Simon of Glaisdale,Lord Kilbrandon |
| Judgment Date | 21 March 1973 |
| Judgment citation (vLex) | [1973] UKHL J0321-1 |
| Court | House of Lords |
[1973] UKHL J0321-1
Lord Wilberforce
Viscount Dilhorne
Lord Pearson
Lord Simon of Glaisdale
Lord Kilbrandon
House of Lords
Upon Report from the Appellate Committee, to whom was referred the Cause Shiloh Spinners Limited against Harding (A.P.), That the Committee had heard Counsel as well on Wednesday the 11th, as on Thursday the 12th, Monday the 16th, Tuesday the 17th, Wednesday the 18th, Thursday the 19th, Monday the 23d and Tuesday the 24th, days of October last, upon the Petition and Appeal of Shiloh Spinners Limited, the Registered Office of which is situate at Shiloh Mills, Royton in the County of Lancaster, praying. That the matter of the Order set forth in the Schedule thereto, namely an Order of Her Majesty's Court of Appeal of the 10th of February 1971, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of Joseph James Harding (Assisted Person), lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 10th day of February 1971, complained of in the said Appeal, be, and the same is hereby, Reversed, and that the Judgment of His Honour Judge Sir Thomas Burgess, Vice Chancellor of the County Palatine of Lancaster of the 9th day of February 1970, thereby Discharged, be, and the same is hereby, Restored: And it is further Ordered, That the Cause be, and the same is hereby, remitted back to the Chancery of the County Palatine of Lancaster, to do therein as shall be just and consistent with this Judgment: And it is also further Ordered, That the further Consideration of the Cause be, and the same is hereby adjourned sine die.
After hearing Counsel for the Parties and for the Law Society on a Question of Costs out of the Legal Aid Fund:
It is Ordered, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the further consideration of the Cause be, and the same is hereby, adjourned sine die.
It is Ordered, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the Costs incurred by the Appellants in the Court of Appeal, and also the Costs incurred by them in respect of the Appeal to this House be paid out of the Legal Aid Fund pursuant to the Legal Aid Act 1964: And it is further Ordered, That the Costs of the Respondent in this House, and in the Court of Appeal be taxed in accordance with the provisions of the Third Schedule to the Legal Aid and Advice Act 1949, as amended by the Legal Aid Act 1960.
My Lords,
The present dispute, one of a commonplace character between neighbours, was tried in the County Palatine Court of Lancaster by Burgess V.-C. who, after a full hearing and in a careful judgment, allowed the Plaintiff's claim. It has attracted in its subsequent progress a number of points of law, more or less substantial, which may have wider influence. I can state the facts briefly. The Appellants were the assignees of two long leases of adjoining properties on which there stood, inter alia, a mill called Shiloh No. 2 Mill. On 31st October 1961 the Appellants assigned their interest in a part of the properties, including Shiloh No. 2 Mill, to Thornber Brothers Ltd. retaining the rest. There were contained in the assignment to Thornber Brothers Ltd. a number of covenants, positive and negative, relating ( inter alia) to (a) fencing of boundaries ( b) keeping in repair a tower (the "lavatory tower") so as to provide support and protection to retained buildings ( c) bricking up openings into a retained roadway ( d) not diminishing support and protection given to the retained premises. There was reserved in the assignment a right to re-enter or retake the assigned property in the following terms:
"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 covenants 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 thereof 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."
There was a proviso by which Thornber Brothers Ltd. were exonerated from liability under any of the stipulations after they had parted with their interest in the assigned premises.
On 5th March 1965 Thornber Brothers Ltd. for consideration assigned their interest to the Respondent, a demolition contractor: he had actual knowledge of the terms of the 1961 assignment. He has demolished the greater part of the buildings on his premises and in doing so, and generally, has committed breaches of the covenants above referred to. The present action was brought by the Appellants claiming possession of the premises comprised in the assignment of 1961: the Respondent disputed the Appellants' right of re-entry and alternatively sought relief against forfeiture. He failed before Burgess V.-C. but succeeded in the Court of Appeal.
The questions which arise may be logically arranged in the following order:
1. Whether a right of entry can be validly reserved on an assignment of leasehold property when the assignor retains no reversion.
2. Whether a right of entry can subsist in law in respect of non-compliance with covenants if those covenants, as such, are not enforceable.
3. As a matter of construction of the assignment whether the right of entry is exercisable in the circumstances of the case.
4. Whether the right of entry is exercisable against the Respondent, a purchaser for value, not having been registered under the Land Charges Act 1925.
5. Whether this is a case where a court of equity may grant relief against exercise of the right of entry.
6. Whether relief should be granted to the Respondent in the circumstances.
My Lords, I can deal briefly with the first three questions. The question of law raised by the first was answered in the affirmative in 1818 by the King's Bench, following older authorities, in Doe d. Freeman v. Bateman 2 B. & Ald. 168. In 1877 this case was approved by the Court of Appeal in Hyde v. Warden L.R.3 Ex. D. 72, 84 and it has never been criticised. No intelligible objection in point of principle was formulated against the proposition so stated, which would merely apply to leaseholds a similar rule as, indisputably, applies to freeholds. In my opinion this House should leave it undisturbed.
As regards the second question, there is again, no convincing reason for giving other than a positive answer. The purpose of the right of entry was to provide a remedy to the lessor in the event—clearly foreseeable since some of the covenants are positive in character—that the covenants themselves could not be enforced against assignees. The only support in law for a negative answer was sought to be drawn from two cases between landlord and tenant— Stevens v. Copp 1868 L.R.4 Ex. 20, Horsey Estate, Ltd. v. Steiger [1899] 2 Q.B. 79. Neither of these cases gives me satisfaction but it is not necessary to disagree with them since they do not apply directly. Moreover the principle accepted in Doe d. Freeman v. Bateman that the validity of the right of entry does not depend upon annexation to a reversion, removes any reason for their application here by analogy. I can see no reason for applying technical rules which since the 16th century have confused the law of landlord and tenant to a different relationship, namely, one which is, or at least closely resembles, that of restrictive covenants.
On the third question, the Respondent sought to invoke the words "failure to perform and observe" and "default" appearing in the re-entry clause in order to found an argument that this clause became inoperative when the covenants themselves became unenforceable. The argument, though forcefully put, failed to persuade me that the construction it sought to place on the clause was otherwise than strained. Since this is an issue which does not extend beyond the present litigation I am content to express my entire satisfaction with the disposal of it by Russell L.J., any addition to whose words would be repetitive.
The next question is of a substantial character. The right of entry, it is said, is unenforceable against the Respondent, although he took with actual notice of it, because it was not registered as a charge under the Land Charges Act 1925. There is no doubt that if it was capable of registration under that Act, it is unenforceable if not registered: the Appellants deny that it was so capable either (i) because it was a legal right not an equitable right or (ii) because, if equitable, it does not fall within any of the classes of descriptions of charges registration of which is required.
I consider first whether the...
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