Leases of magistrates’ court premises — Claimant having power to compel transfers of such premises by public authorities — Whether grant of leases falling within statutory power — Whether claimant having power to compel transfer of entire building where part only used as magistrates’ court — Claim dismissed
The claimant demised to the first secretary of state various properties owned by public bodies for terms of 999 years at peppercorn rents. The demises were made pursuant to the Transfer of Property (Abolition of Magistrates’ Courts Committees) Scheme 2005 in order to provide accommodation for magistrates’ courts. One of the properties, owned by the interested party, consisted of the ground floor of a larger building, the rest of which was used for residential accommodation and which the interested party wished to redevelop.
The defendant expressed concern that parliament had not conferred upon the claimant any power to effect the demises, and declined to register the leases until that power had been confirmed. The claimant accordingly applied to the court for a declaration on the matter. The case turned on the provisions of the Courts Act 2003. Section 6(3) of, and Part 1 of Schedule 2 to, the Act conferred upon the claimant the power to effect the provision of courthouses by the creation of a scheme for the “transfer” of any property, rights or liabilities appertaining to the appropriate public bodies.
The defendant submitted that a “transfer” required a pre-existing property or right, belonging to the public authorities, that could be transferred to the first secretary of state, whereas, on ordinary principles of land law, the grant of a lease involved no transfer, but, rather, the creation of a new legal estate. The claimant argued that the phrase “transfer… of any property” was sufficiently wide to apply to the grant of a lease because it transferred the right to occupy the property or the right to exclusive possession. The claimant submitted, in the alternative that if he had no right to create new leasehold interests, it was in his power to effect a transfer of property “in connection with or otherwise attributable to magistrates courts”. This was sufficiently wide to permit a transfer of the entire freehold of a building, even if part only was being used for the purposes of a magistrates’ court, thereby avoiding the creation of complicated “flying freehold” arrangements.
Held: The claim was dismissed.
1. Schedule 2 to the 2003 Act did not confer upon the claimant the power to effect the grant by public authorities of new leases of magistrates’ courts. There was a clear difference between the transfer of property and the creation of a lease or property interest. The grant of a lease transferred no rights or obligations but created new ones. The lessor would retain its right of possession, while an inconsistent right to exclusive possession would be created in the lessee; at the end of the lease, the lessor’s right would again become exercisable. Moreover, the interests of public authorities might well differ from those of the claimant, and leases could impose terms that would be onerous for them or that would interfere with or damage their property rights. Had parliament intended the claimant to have such a far-reaching power, it would have had to grant it in express terms.
2. Schedule 2 did not confer a power to compel a public authority to transfer an entire building where part only was being used as a magistrates’ court. There was a strong presumption that parliament did not intend to take property without compensation. It was understandable that no compensation would be granted to public authorities for transferring magistrates’ courts because this would relieve them from the obligation to provide court premises. However, a power to compel them to transfer other parts of buildings not used as courts could result in them losing valuable residential or office properties. The 2003 Act did not envisage that the interests of transferors would be adversely affected by the scheme, and the interests of local authorities were not to be equated with those of the claimant. It was true that such an interpretation of the 2003 Act could cause practical difficulties for the claimant, but this resulted from a lack of careful drafting.
Timothy Mould (instructed by the Treasury Solicitor) appeared for the claimant; Philip Jones (instructed by the legal department of the Land Registry) appeared for the defendant; Leigh-Ann Mulcahy (instructed by Barlow Lyde & Gilbert) appeared for the interested party, Barking and Dagenham London Borough Council.
Sally Dobson, barrister
