Landlord and tenant — Novel relief sought — Landlord’s covenants to keep in repair, and even to insure, not performed during the past two or three years and rents and service charges not collected — Properties, consisting of two blocks of flats, seriously deteriorating — Plaintiffs in present action tenants of flats, defendants a company which sold the reversionary interest in 1979 to a purchaser who had neither registered his title nor exercised any rights attached to his reversion — Plaintiffs brought the action against defendants seeking a mandatory injunction to compel compliance with covenants and also damages — Present motion was for the appointment, pending the trial, of an independent surveyor to receive the rents of the flats and other moneys payable and to manage the blocks in accordance with the landlord’s obligations — Although knowing of no precedent for this form of relief in these circumstances, Goulding J appointed a receiver in accordance with section 37 of the Supreme Court Act 1981
These were
separate motions in two actions relating to two blocks of flats in Battersea in
which the same situation had arisen requiring some immediate action.
Alastair
Norris (instructed by Parlett Kent & Co) represented the plaintiffs; Roger
A Cooke (instructed by Bernstein & Co) represented the defendant company.
Giving
judgment, GOULDING J said: These are motions in two actions relating to blocks
of flats in Battersea. A situation has arisen, which I believe is not, by any
means, unprecedented in the suburbs of London but which does not seem before to
have been, so far as reported cases go, the subject-matter of a similar
application to that I have today.
The several
flats in each block are let under separate long leases — not expiring until far
into the next century — made by a freeholder who was the predecessor in title
of the defendant company. For two or three years past, the reversioner has
neither attempted to collect the rent and the contributions to maintenance and
services provided for by the leases nor performed the covenants by the landlord
contained in the leases to keep the property in repair, or even to effect
insurance. The evidence adduced by the plaintiffs shows that the properties are
now in a condition where serious deterioration is taking place and where, in
more than one of the flats, reasonably comfortable occupation is threatened by
the incursion of damp and the propagation of moulds and rots.
The defendant
company says by counsel, as it has already alleged in correspondence, that in
1979 it sold the freehold reversion and completed the sale by transfer, but the
purchaser has neither registered his title nor sought, as I have said, to
exercise any of the rights attached to the reversion. It is, indeed, suggested
on the defendant’s behalf that the purchaser may have sold on to yet a further
party.
The action is
brought to obtain a mandatory injunction against the defendant company to
comply with the landlord’s covenants and also for damages, and counsel for the
defendant company tells me that third party proceedings are likely. But what I
am asked to do today by the plaintiffs in each of the two actions dealing with
adjoining blocks of flats is to appoint a named surveyor to receive the rents
and profits of each property and all other moneys payable under the lease or
any part thereof and to manage the property in accordance with the rights and
obligations of the reversioner until trial or further order. I am asked to say
that the person so appointed may give a good receipt for certain sums of money
which one of the plaintiffs in each case has received as representing (or
apparently representing) what remains of a reserve fund, intended under the
leases to be built up by tenants’ contributions, and that he (the receiver) may
have to resort to those funds in course of management.
Now, I know of
no precedent for such relief, but I also know of no authority that forbids it
under the provisions of the Judicature Acts now represented by the Supreme
Court Act 1981, section 37:
The High Court
may by order (whether interlocutory or final) . . . appoint a receiver in all
cases in which it appears to the court to be just and convenient to do so . . .
It clearly
appears to me to be just to appoint a receiver in this case because it is done
to support the enforcement by the court of covenants affecting property:
compare Riches v Owen (1868) 3 Ch App 820. It is also convenient
because, as I said, the properties are in a condition that demands urgent
action.
I propose,
therefore, in each action to appoint the nominated surveyor, in respect of whom
an affidavit of fitness has been provided. I am assuming, of course, that his
formal consent to act will be forthcoming. I will appoint him to receive the
rents and profits and other moneys payable under the leases in the form of the
notice of motion and to manage, in accordance with the rights and obligations
of the reversioner, again as stated in the notice of motion, until trial or
further order. I think the court has a wide jurisdiction to invest a receiver
with such powers as the court, in its discretion, thinks necessary for the
preservation of the property, the income of which he is to receive.
I see no
reason to dispense with security. I think the order should be that he be
appointed upon giving security, and subject to such security I will include a
direction that he may give a good receipt to one of the plaintiffs, Mr Murr,
for the two sums that are in his hands.
As regards the
position of the defendant, whose legal advisers appear not yet to be fully
instructed in the matter, I think I can safeguard that and also assist
generally if I direct that the parties be at liberty to apply as they may be
advised in the most general terms. The costs of the motion are reserved to
trial.