Tiffany Investments Ltd and another v Bircham & Company Nominees Ltd and Others (No 2)
| Jurisdiction | England & Wales |
| Judge | The Vice-Chancellor,the Vice-Chancellor |
| Judgment Date | 04 December 2003 |
| Neutral Citation | [2003] EWCA Civ 1759 |
| Docket Number | Case No: A3/2003/0357 |
| Court | Court of Appeal (Civil Division) |
| Date | 04 December 2003 |
[2003] EWCA Civ 1759
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
MR. JUSTICE LINDSAY
The Vice-chancellor
Lord Justice Waller And
Lord Justice Sedley
Case No: A3/2003/0357
Mr. Paul Morgan QC and Mr. Timothy Dutton (instructed by Messrs Howard Kennedy) for the Appellants
Mr. John McGhee QC (instructed by Messrs Bircham Dyson Bell) for the Respondents
Introduction
By a lease dated 22nd August 1979 ("the Lease") the predecessors in title of first and second defendants ("the Lessors") demised No. 1 Thurloe Close, South Kensington, London, SW7 ("the Property") to J.G. Hemingway for a term of 47 years, 4 months and 3 days from the date thereof at a rent of £40 per annum. That was a long lease at a low rent for the purposes of Part I of the Landlord and Tenant Act 1954 so that if and as long as the tenant was an individual and in occupation of the Property he would enjoy the protection afforded by the Rent Act. Clause 2(9) contained a covenant against assignment. Clause 5 conferred a right of pre-emption on the lessor if at any time during the term the Lessee should wish to dispose of the Lease.
On 20th October 1983 the term was assigned by Mr Hemingway to the third and fourth defendants, Mr and Mrs Bailie ("the Bailies"), who were registered as proprietors thereof on 7th November 1983. The Bailies moved into the Property on about 6th January 1984. By an agreement dated 8th August 1986 ("the 1986 Agreement") the Bailies agreed, in the circumstances therein stated, to sell the Lease to the first claimant Tiffany Investments Ltd ("Tiffany") for £250,000. The Bailies did not then first offer to sell the same to the lessor whether pursuant to clause 5 of the Lease or otherwise but the 1986 Agreement was never completed by the registration of an assignment of the Lease to Tiffany. The Bailies moved out of the Property in December 1986 or January 1987 with the consequence that the protection afforded by Landlord and Tenant Act 1954 Part I then ceased.
On 16th March 1999 by a series of agreements, to which I shall refer collectively as "the 1999 Agreement" Tiffany agreed to sell the Lease, described as held by the Bailies in trust for Tiffany, to the second appellant Ms Coral Chantry ("Ms Chantry") for £475,000. On the same day solicitors for the Bailies sought the consent of the Lessors to an assignment of the Lease to Ms Chantry and gave notice under clause 5 of the Lease of their wish to dispose of the Property for £475,000. By a letter dated 31st March 1999 from their agents the Lessors declined to exercise their right of pre-emption but failed to respond to the request for consent to an assignment to Ms Chantry.
On 19th December 2001 the Lessors instituted proceedings against the Bailies for specific performance of the right of pre-emption claimed to have arisen in consequence of the sale of the Lease to Tiffany under the 1986 Agreement. Those proceedings were compromised by an agreement ("the 2002 Agreement") made on 8th February 2002 between the Lessors and the Bailies whereby the Bailies were to give notice under clause 5 of the Lease offering to sell the same to the Lessors for £250,000. Such offer was made and accepted by the Lessors. In addition there was an order in Tomlin form which required the Bailies forthwith to assign the Lease to the Lessors. The consideration for that assignment of £250,000 was to be put into an account with the Lessors' solicitors pending the resolution of any claims made by Tiffany or Ms Chantry.
These proceedings were commenced by Tiffany and Ms Chantry on 13th March 2002. They claimed that the Bailies held the Lease in trust for Tiffany, that Tiffany had agreed to sell the same to Ms Chantry for £475,000 and that the Lessors were unreasonably withholding their consent to an assignment of the Lease by the Bailies to Ms Chantry. By their defence and counterclaim against both claimants and the Bailies the Lessors contended that the events of 1986 gave rise to an option pursuant to clause 5 of the Lease entitling the Lessors to buy the Lease for £250,000 in priority to any rights of Tiffany or Ms Chantry under either the 1986 Agreement or the 1999 Agreement. In those circumstances they claimed that Tiffany was not entitled to assign the Lease to Ms Chantry so that the question whether the Lessors have unreasonably withheld their consent does not arise. They do not dispute that if the question does arise then their consent has been unreasonably withheld. The Lessors claimed declarations that they were entitled to be registered as proprietors of the Lease and that Tiffany and Ms Chantry had no interest in it. By their reply and defence to counterclaim Tiffany and Ms Chantry contended that clause 5 of the Lease did not in the events which had happened operate to confer any option on the Lessors to acquire the Lease both because of the terms of clause 5 and the provisions of s.17 Landlord and Tenant Act 1954 to the effect that the provisions of Part I of that Act are to have effect notwithstanding any agreement to the contrary.
The claim and counterclaim came before Lindsay J. He concluded that (i) clause 5 imposed an obligation on the Bailies to offer to sell the Lease to the Lessors immediately before the conclusion of the contract to sell it made by the Bailies with Tiffany on 8th August 1986, (ii) that obligation was not affected by s.17 Landlord and Tenant Act 1954, so that (iii) on 8th August 1986 an equitable interest in the Lease became vested in the Lessors by reason of the failure of the Bailies to perform that obligation and (iv) that interest has priority over any interest of Tiffany or Ms Chantry. Accordingly he made the declarations sought by the Lessors.
This is the appeal of Tiffany and Ms Chantry brought with the permission of Lindsay J. A respondent's notice has been served by the Lessors raising for the consideration of this court the same issues relating to s.17 Landlord and Tenant Act 1954 as were before Lindsay J. Accordingly the broad issues we have to determine may be summarised as follows:
a) in the events which occurred in 1986 did clause 5 confer on the Lessors any and if so what rights?
b) were those rights affected by s.17 Landlord and Tenant Act 1954 and if so how?
c) which of the Lessors and Tiffany/Ms Chantry now has the better right to the Lease?
The Bailies indicated that they have no interest in the outcome of any of those issues and took no part in the hearing of the appeal.
In the events which occurred in 1986 did clause 5 confer on the Lessors any and if so what rights?
The relevant provisions of the Lease are contained in clauses 2(9)(iii) and 5. So far as material they provide:
[2(9)(iii)] "Subject as aforesaid and subject also to due compliance by the lessee with the terms of clause 5 hereof:-
(a) not to assign part with or share the possession of the whole of the demised premises without the prior written consent of the lessors such consent however not to be unreasonably withheld in the case of a respectable and responsible person who shall enter into a direct covenant with the lessors to observe and perform all the covenants on the part of the lessee and the conditions herein contained"
…….
[5] "If at any time during the term hereby created the Lessee shall wish to dispose of the term hereby created in the demised premises he shall first offer the same in writing to the Lessors stating the price at which he is prepared to sell the same and the encumbrances (if any) subject to which the said term shall be assigned. If the Lessors shall not within twenty-one days of the receipt of such notice accept the offer therein contained the Lessee may within six months thereafter (subject to getting the Lessors' consent thereto as hereinbefore provided) assign the said term to an approved assignee at a price equivalent to or greater than that at which it was offered to the Lessors but shall not assign the same for any lesser sum than that at which it was last offered to the Lessors without again offering the same in writing to the Lessors at such lower figure. Any such renewed offer shall specify the encumbrances (if any) subject to which the said term shall be assigned. If any such renewed offer shall not be accepted within a period of fourteen days thereof the Lessee shall be free to assign the said term to an assignee (subject to getting the Lessors' consent thereto as hereinbefore provided) subject however to the obligation as aforesaid to offer the same to the Lessors again in the terms of this clause if such assignment shall be proposed for any lesser sum than that at which it was last offered to the Lessors."
In addition we were referred to a number of other provisions in the Lease such as clauses 2(10) and 6 to demonstrate that references to an assignment comprehended only transfers of the legal estate in the Lease.
The 1986 Agreement was not a straightforward contract for the sale of a lease. The Bailies were defined as the vendors and Tiffany as the purchaser. It was recited that the Vendors "have in mind to agree with the Purchaser for the sale" of the Lease in the form of the contract for sale annexed thereto "which the Vendors and the Purchaser have signed for the purposes of identification". It was further recited that Tiffany had requested the Bailies to seek to secure the enfranchisement of the Lease pursuant to the Leasehold Reform Act 1967 which the Bailies had agreed to do "subject to the terms...
To continue reading
Request your trial
-
Ong Chay Tong & Sons (Pte) Ltd v Ong Hoo Eng
...subsequent and does not constitute a restraint on alienation. 43 In Tiffany Investments Ltd v Bircham & Co Nominees (No 2) Ltd [2004] 2 P & CR 10 (“Tiffany Investments”), the English Court of Appeal, applying Pritchard v Briggs [1980] Ch 338 (see [47]–[51] below), held that the sale of a le......
-
Mark Law and Annabel Law v Elizabeth Haider
...argument depended on his analysis of the decision of the Court of Appeal in Tiffany Investments Ltd v Bircham & Co Nominees (No. 2) Ltd [2004] 2 P&CR 10 (“Tiffany”). Before considering that case, it is useful to step back to the law as it was before section 115 of the Land Registration Act ......
-
Ong Chay Tong & Sons (Pte) Ltd v Ong Hoo Eng
...subsequent and does not constitute a restraint on alienation. 43 In Tiffany Investments Ltd v Bircham & Co Nominees (No 2) Ltd [2004] 2 P & CR 10 (“Tiffany Investments”), the English Court of Appeal, applying Pritchard v Briggs [1980] Ch 338 (see [47]–[51] below), held that the sale of a le......
-
Pacific Centre Limited v. Creative Energy Vancouver Platforms Inc., 2020 BCSC 676
...a wish to dispose of such property (citing Tiffany Investments Ltd and Another v. Bircham & Co Nominees (No 2) Limited and Others, [2003] EWCA Civ 1759). [84] CEV submits that such certainty is lacking here in that there is as yet no legal descr......