The Thames Tradesmen’s Rowing Club was an unincorporated association. It took a lease of Chiswick Boathouse from the London Borough of Hounslow in 1987, for a term of 30 years, at an initial rent of £3,300 per annum.
A few years later, the council encouraged the club to enter into a joint venture agreement with Hounslow Hockey Club Ltd, and it was agreed that the lease would be assigned into their joint names. The council granted them a licence to assign and, following the assignment, all three parties entered into a deed of variation of the lease extending the term so that it expired in 2033, increasing the annual rent, and making other small changes.
The company was subsequently dissolved, but the club continued to occupy the boathouse and to pay the rent. However, when the Treasury Solicitor disclaimed the Crown’s title to the lease, the council wrote to the club denying that it had an interest in the boathouse – on the ground that an unincorporated association cannot hold a legal estate in land. Hence the litigation in Panton v Brophy [2019] EWHC 1534 (Ch).
The club applied to the court under sections 41 and 44 of the Trustee Act 1925 asking it to vest the lease in three of its members, as trustees for the club, in place of the company. It argued that the assignment, or deed of variation, took effect as a surrender of whatever interest was created by the lease, and as a re-grant to the company, which then held the lease on trust for itself and the members of the club. On the dissolution of the company, its interest had passed to the Crown as bona vacantia, but the club’s beneficial interest would not have been affected.
The judge accepted the council’s argument that the assignment did not assist the club because there had not been any leasehold interest to assign. Furthermore, the council was not a party to the assignment – so it could not grant anything. However, the council was a party to the licence to assign and deed of variation, and had agreed that the club and the company would become its tenants on the terms agreed between them. Therefore, it had granted a lease on those terms.
The parties had intended that the grant should be to the club and the company. Any joint tenancy is held on a trust of land and, although an unincorporated association cannot hold a legal interest in leasehold land, it can have a beneficial interest in it, in the sense that the legal title is held on trust for the members of the association from time to time, subject to their contractual rights and liabilities to each other as members of the association. So the council’s intention that the club should be a tenant was realised by a grant to a trustee to hold the leasehold estate on trust for the club’s members.
If that was wrong, the club had been in occupation pursuant to documents that constituted an agreement to grant a lease. Alternatively, the occupation of the boathouse, together with the payment of rent, created a periodic business tenancy, which the company had held on trust for itself and the club beneficially. Consequently, the judge made an order vesting the lease in the trustees of the club.
Allyson Colby is a property law consultant
