Wilton Student Developments (Egerton) Ltd v Kin Fan IP

Hearing date: 7 October 2025

Approved Judgment

I. The Appeal

By Appellant's Notice dated 24 September 2024 the Appellant, Wilton Student Developments (Egerton) Ltd applied for permission to appeal against the judgment of His Honour Judge Baddeley (the “ Judge”) dated 4 September 2024 in the Sheffield County Court (the “ Judgment”) in which he held that certain deeds of surrender were ineffective to extinguish the Respondent's equity of redemption in the leases of two flats. After handing down the Judgment, the Judge heard submissions on costs and delivered an ex tempore judgment.

By Order dated 25 September 2024 (the “ Order”) the Judge gave directions for the continuation of an injunction which His Honour Judge Robinson had granted on 14 March 2024 (the “ Injunction”) and for the determination of the outstanding issue, namely, the assessment of the value of the Respondent's equity of redemption. He ordered the Appellant to pay two thirds of the Respondent's costs which he assessed at £11,923.33. He also refused permission to appeal against both of the substantive orders which he had made and the costs order.

On 21 October 2024 the Judge vacated the trial which had been listed for 9 January 2025 and on 28 October 2024 His Honour Judge Gargan stayed enforcement of the costs order and the further directions for assessment. On 11 November 2024 Bright J granted permission to appeal on Ground 1 of the Grounds of Appeal (below) but refused permission in relation to Ground 2 which related to the judgment and order for costs which the Judge had made.

Given the nature of the issue, the Appeal was transferred to the Chancery Division and I heard it on 7 October 2025. Ms Rachel Coyle, instructed by Glenville Walker & Partners Ltd (“ Glenville Walker”), appeared on behalf of the Appellant (as she had done so below). Dr John Brown appeared on behalf of the Respondent. He did not appear at the trial below where the Respondent represented himself although I was also told that other counsel settled the Particulars of Claim and appeared at a number of earlier hearings.

II. Background

A. The Facts

The Judge set out a factual chronology of the background to the issues which he had to decide in the Judgment, at [1] to [24]. It is difficult to improve on this and Ms Coyle accepted that it was accurate. I gratefully adopt it together with the defined terms and abbreviations which the Judge used in those paragraphs:

“1. The Claimant in this case is Kin Fan Ip, a resident of Hong Kong.

2. The Defendant is Wilton Student Development (Egerton) Limited, a property development company.

3. The case concerns Units 705 and 709 Nebula Apartments, Egerton Street, Sheffield (“the Apartments”). Nebula Apartments is a development of student flats.

Chronology

4. In 2014, the Claimant paid 80% deposits on the Apartments to the then developer, Pinnacle Student Developments Ltd. The flats were about £55,000 each (the Land Registry entries say £55,995), so the Claimant paid approximately £88,000 – £90,000 at that time.

5. Pinnacle Student Developments Ltd had financial difficulties and were unable to complete the development of the apartments.

6. A company called Spectrum Buyers Limited was set up to protect the investors. It was granted a charge over the freehold. The Claimant was one of the directors of this company.

7. In November 2017, the Claimant paid the £22,000 balance of the purchase price (£11,000 per apartment) and was granted long leaseholds of the two flats, albeit without physical possession, as the development had not been completed. The Land Registry documents show that on 3rd November 2017, the Claimant became the owner of 999 year leases of the Apartments from 31st January 2015.

8. Spectrum Buyers Limited then took possession of the freehold of the block as mortgagees in possession.

9. On 25th October 2019, following negotiations with potential new developers, the Defendant purchased the freehold from Spectrum Buyers Limited for £1. It was a condition of the Defendant taking over the development that the leaseholders either sold their leases to the Defendant for £22,000 or invested a further £16,000 per apartment towards the cost of completing the development.

10. On 27th January 2020, the Claimant entered into: i) a loan agreement (“the Loan”) with Simon Roue, Naseema Roue, Adrian Todd, Tak Chai and Anthony Byrne (“the Lenders”) whereby he borrowed £33,087.80 over 5 years to be repaid 25% after 2 years from the drawdown date and 75% after 5 years from the drawdown date; and ii) a mortgage (“the Mortgage”) with Simon Roue, Naseema Roue and Adrian Todd (“the Mortgagees”) to secure the Loan. By this document, the Claimant granted a charge over the Apartments “by way of a legal mortgage” (Clause 3.1.1).

11. The Defendant's case is that the loan was drawn down on the same day (27th January 2020) by payment of the amount loaned into an escrow account held with Harborough London. Mr Roue's evidence was that Harborough London were managing the properties.

12. On 27th January 2022, on the Defendant's case, the first instalment was due on the loan. The Claimant didn't pay.

13. On 4th March 2022, the Lenders/Mortgagees assigned the loan and mortgage to Cirrus Property Group Limited (“Cirrus”). They had given notice to the Claimant of this assignment by email sent on 3rd March 2022.

14. On 14th March 2022, Cirrus' solicitors Birmans wrote to the Claimant advising that, as he had defaulted on the Loan, the full amount of the loan, together with interest and other charges, totalling £43,281.81 was payable. The letter advised that if this sum was not paid by 5pm on 18th March 2022, Cirrus would take possession of the Apartments as mortgagees in possession.

15. On 18th March 2022, Cirrus took possession of the Apartments and changed the locks.

16. On 7th July 2022: i) Two Deeds of Surrender were purportedly entered into in respect of the lease relating to apartment 709: a) One signed by the Defendant as both the landlord and tenant; and b) One signed by Cirrus as the tenant and the Defendant as the landlord. Mr Monks signed both documents as a director of the Defendant and the latter document as a director of Cirrus. ii) The Defendant granted a long lease of apartment 709 to Kestutis Mazutavicius for £60,000.

17. On 11th July 2022: i) Two Deeds of Surrender were purportedly entered into in respect of the lease relating to apartment 705: a) One signed by the Defendant as both the landlord and tenant; and One signed by Cirrus as the tenant and the Defendant as the landlord. Again, Mr Monks signed both documents as a director of the Defendant and the latter document as a director of Cirrus. ii)

18. On 21st July 2022, the Defendant granted a long lease of apartment 705 to Gabriel Ijomor for £60,000.

19. On 30th August 2022, Unit 705 was rented to a Kudzai Chuma on an assured shorthold tenancy.

20. On 6th September 2022, Unit 709 was rented to Sophie Lowe on an assured shorthold tenancy.

The Claim

21. When the Defendant applied to HM Land Registry to change the register to show that the leases had been surrendered and to withdraw the restriction in favour of the Claimant, the Claimant was given notice by HMLR. This prompted the Claimant to commence proceedings.

22. On 6th December 2022, the Claimant sought an injunction to prohibit any alteration to the Register in respect of the Apartments.

23. On 14th March 2023, HHJ Robinson granted this injunction against the Defendant and gave directions for the issue of a Part 7 claim.

24. The Claimant issued this claim on 25th April 2023 seeking (amongst other things): i) A declaration that the basis in which the Defendant sought to register the change of title was misconceived. ii) A declaration that the surrenders were invalid. iii) A declaration that the Defendant had no right in law to take possession in the manner it did. iv) A declaration that the Defendant has breached the Claimant's property rights in seizing control of his properties. v) Damages for breach of those property rights and of his quiet enjoyment. vi) An account of rents. Vii) Possession of the Apartments.”

I will refer to the two deeds of surrender dated 7 July 2022 in relation to apartment 709 as “ Surrender 1” and “ Surrender 2” and to the two deeds of surrender dated 11 July 2022 in relation to apartment 705 as “ Surrender 3” and “ Surrender 4”. I will also refer to the four deeds of surrender collectively (as the Judge did) as the “ Deeds of Surrender”. Finally, I will refer to each apartment as a “ Property” and both together as the “ Properties”).

B. The Mortgage

The Mortgage is dated 27 January 2020 and is expressed to be made by deed and between the Respondent (1) and the Lenders as “ Security Trustees” (2). Clause 1 contained the definitions and clause 1.1 defined the “ Act” as the Law of Property Act 1925. It also contained the following definitions which I adopt:

“ Charged Assets all properties, assets and rights of the Borrower charged by this deed;”

“ Disposal includes any charge, sale (whether subject to this deed or otherwise), lease, sub-lease, assignment or transfer, or any agreement to enter into any of the foregoing, the grant of an option or similar right, the creation of a trust or other equitable interest in favour of a third party and a sharing or parting with possession or occupation whether by way of licence or otherwise and Dispose and Disposition shall be construed...