Land Charges Act 1925–Option to renew an underlease–Option entered in the charges register under Land Registration Act 1925 against the freehold title–Not registered as a land charge under Land Charges Act 1925–Option not valid against purchasers of head lease
This was an
appeal by the first defendants, MEPC Ltd, from a decision of Whitford J, who
decided on the trial of a preliminary issue that an option to extend the term
of an underlease held by the plaintiff, Alan Kitney, of Furzefield Road,
Beaconsfield, Bucks, was effective and binding on MEPC, the registered
proprietors of the freehold title.
John Vinelott
QC and Peter Horsfield (instructed by Clifford-Turner & Co) appeared for
the appellants; Michael Browne QC and Ian Romer (instructed by Dale &
Newbery) for the respondent (plaintiff).
Giving the
first judgment, GOFF LJ said that the plaintiff was seeking to establish that
he had effectively exercised a provision for renewal of his lease of certain
premises in Harrow, Middlesex. In 1933 the second defendants, who were not
concerned in the issue at present before the court, granted a 42-year
underlease of the premises which was later assigned to the plaintiff. A
memorial of the underlease was recorded in the Middlesex Deeds Register, but a
provision for renewal, registrable as an estate contract, was not registered in
the register of land charges. The head lease was assigned on sale to Monument
Property Trust Ltd in 1934 and to the first defendants, MEPC, in 1947, after
which the leasehold title was registered, Middlesex having become a compulsory
registration area in 1937.
In 1969 the
first defendants acquired the freehold and, the acquisition being of a part
only of the registered freehold, a new title absolute was registered against which
the underlease appeared in the charges register. When the plaintiffzef
sought to exercise the option to renew, the first defendants challenged its
validity. Under section 13(2) of the Land Charges Act 1925 the option would be
void as against Monument Property Trust Ltd and the first defendants as their
successors in title, unless at the time of the assignment to Monument it was
registered in the appropriate register. While the merger of the head lease and
the freehold in 1969 could not have destroyed the underlease or operated to
invalidate the option under section 13(2), it could not give the plaintiff any
new right or validate the already void option.
Mr Browne
argued that the Land Registration Act had established a code and that one could
not go behind it; that a registration of the underlease made the land subject
to it and therefore subject to the option in it; and that the first
registration in 1969 was a new start. On general principle it seemed that
registration, which was designed to establish the proprietor’s title, could not
create rights and interests against him which did not exist and could not
enable anyone to enforce a right which such person had lost. In his (his
Lordship’s) judgment, the option was invalidated as against the purchasers of
the head lease and their successors in title for want of registration under the
Land Charges Act 1925 and was not revived either by the merger of the head
lease in the freehold or by the entry of the underlease in the charges register
under the Land Registration Act 1925 in relation to the freehold title.
SHAW and
BUCKLEY LJJ agreed and the appeal was allowed.
