Pending action for forfeiture of long lease of flat – Landlord obtaining charging order as security for costs – Landlord agreeing under terms of consent order to procure removal of charging order – Landlord complying but then registering caution against dealing – County court ordering removal of caution – Landlord’s appeal allowed
In December 1987 the claimant landlord granted to the defendant tenant a 99-year full-repairing lease of a flat located above garage premises in Eton Avenue, Hampstead, London NW3. In March 1998 the landlord, complaining of persistent breaches by the tenant of his repairing covenant, instituted forfeiture proceedings, which resulted in a consent order directing that the lease would be forfeited unless the tenant executed an extensive programme of works detailed in a schedule to the order. In December 1998 the landlord, contending that the tenant had failed to comply with the order, brought enforcement proceedings seeking leave to enforce the forfeiture. While those proceedings (as yet unheard) were pending, the landlord obtained an order entitling him to charge the flat as security for costs incurred to date, amounting to £31,500. The tenant applied for the removal of the charge and paid £30,000 into court. Pursuant to a consent order made on 17 May 1999, the tenant paid a further £1,825 into court and the landlord procured the removal of the charge. However, on 10 June 1999 the landlord caused to be entered against the tenant’s title a caution against dealing with the property pending the outcome of the enforcement proceedings. The tenant applied for an order that the caution be removed because its presence disabled him from obtaining a loan, which he needed to complete the repairs and to refinance an onerous loan on another property that was about to be repossessed. The county court judge granted the order on the ground that the landlord had acted contrary to the spirit of the order of May 1999. The landlord appealed.
Held: The appeal was allowed.
1. The landlord had a right to enter the caution, not so much as a security for costs, but rather to inform a prospective lender that the proposed security was subject to a very severe forensic onslaught. A lender who was not so alerted could, for example, find himself driven to apply for relief under section 146(4) of the Law of Property Act 1925 with little certainty as to the outcome. The order of May 1999 did not authorise or envisage a new borrowing on the security of the lease, nor had it caused the tenant to move to his detriment, as he had simply paid money into court. Strong reasons were required for vacating an entry that the landlord was entitled to have placed on the register. No such reasons had been advanced.
2. The appeal having been decided on the merits, it was unnecessary to question whether the county court possessed the jurisdiction to make the order appealed against: a question left open in Watts vWaller [1973] 1 QB 153.
Peter Leighton (instructed by Rosenbergs) appeared for the claimant appellant; the defendant appeared in person.
Alan Cooklin, barrister
