Land Charges Act 1972 — ‘Pending land action’ — Whether proceedings seeking leave under Leasehold Property (Repairs) Act 1938 to commence an action for breach of repairing covenants in lease were within definition of ‘pending land action’ — Notices by landlords under section 146 of Law of Property Act 1925 alleging breaches of covenants to repair followed by counternotices by tenants invoking the Act of 1938 — Landlords then applied to county court for leave to commence an action for breach of the repairing covenants — Whether the application to the county court was a ‘pending land action’ — Authorities reviewed and analysed — County court proceedings a preliminary stage in forfeiture proceedings — Proceedings for forfeiture would constitute a pending land action — Held that the present proceedings, for leave to commence an action which might include a claim for forfeiture, sufficiently related to the land under the lease to qualify as a ‘pending land action’ — Motion by tenants for order vacating cautions registered by the landlords accordingly dismissed
This was a
motion by the plaintiffs, Selim Ltd, tenants of two houses at 58 and 74
Taybridge Road, Battersea, London SW11, for an order vacating cautions
registered against each of the houses on the application of the landlords, the
defendants, Bickenhall Engineering Ltd. The cautions related to proceedings by
the landlords in Wandsworth County Court in which they sought leave to commence
actions against the tenants for breaches of repairing covenants. Leave was
required under the Leasehold Property (Repairs) Act 1938 because more than
three years of each lease was unexpired.
M M Pascoe
(instructed by L B Markson & Co) appeared on behalf of the plaintiffs; W
Elland (instructed by Slowes) represented the defendants.
Giving
judgment, SIR ROBERT MEGARRY V-C said: This motion raises a single question of
law. That question is whether certain proceedings fall within the definition of
a ‘pending land action’ in the Land Charges Act 1972 and so are registrable as
a ‘pending action’ under section 5 of the Act. By section 17(1), unless the
context otherwise requires, the expression ‘pending land action’ means ‘any
action or proceeding pending in court relating to land or any interest in or
charge on land’. The question is whether this definition includes proceedings
in a county court under the Leasehold Property (Repairs) Act 1938 which seek
leave to commence an action against an assignee of a lease for breach of the
repairing covenants.
The matter
arises in this way. The two houses in question, 58 and 74 Taybridge Road,
Battersea, were demised by separate leases for 99 years from June 24 1890, each
at a rent of £7 a year. On October 17 1980 each lease was assigned to the
plaintiff company. Some five months earlier the defendant company, the
landlords, had served on the assignors notices under the Law of Property Act
1925, section 146, in respect of the disrepair of the premises, accompanied by
schedules of dilapidations. As over three years of each lease was unexpired,
the assignors were entitled to serve on the defendant company a counternotice
under the Act of 1938, and this they did on June 10 1980 in respect of each
house. By section 1(3) of the Act of 1938, the effect of this was to prohibit
the defendant company from taking any proceedings, by action or otherwise, for
the enforcement of any right of re-entry or forfeiture for breach of the
repairing covenants, or for damages for such breach, without the leave of the
court. On December 9 1980, after the assignment to the plaintiff company, the
defendant company issued originating applications in the Wandsworth County
Court in respect of each house, seeking, inter alia, ‘leave to commence
an action’ against the plaintiff company ‘for breach of the repairing
covenants’ in the leases.
The title to
each leasehold is registered at the Land Registry with good leasehold title. By
virtue of the Land Registration Act 1925 section 59(1), (5), a pending action
which for unregistered land is required to be protected under the Land Charges
Act 1972 is, for registered land, required to be protected by the entry of a
caution against dealings with the land instead. The plaintiff company wished to
sell the leasehold interest in both houses, and gave instructions for them to
be sold at auction on April 27 1981. However, on April 2 1981 the defendant
company’s solicitors wrote to the plaintiff company’s solicitors to say that
they had registered cautions against each of the houses. Despite the protests
of the plaintiff company’s solicitors, the defendant company refused to remove
the cautions. At the auction on April 27 an announcement was made about the
service of the schedules of dilapidations and the commencement of proceedings
to enforce them; and it was stated that the purchasers would have to deal with
all problems relating to these. Despite this, both houses were sold at the
auction (one with part vacant possession), and the plaintiff company expects
that the purchasers will require the cautions to be vacated before they will
complete. The plaintiff company accordingly issued a writ and notice of motion
on May 5 1981 seeking in respect of each house, either under section 82 of the
Land Registration Act 1925 or the inherent jurisdiction, an order that the
cautions be vacated. The writ also claims damages.
On behalf of
the plaintiff company and the defendant company respectively, Mr Pascoe and Mr
Elland were in agreement on every point save the one in dispute. For the
purposes of the motion only, Mr Pascoe accepted that there were breaches of the
repairing covenants and that leave under the Act of 1938 will be granted by the
county court. No question was raised on the power of the court to grant on
motion the relief sought by the plaintiff company, or on the jurisdiction
(whether inherent or under section 82 of the Land Registration Act 1925) to
make the order sought, or on the form of the order, whether personal or
impersonal. On both hands it was accepted that the only question was whether
the application to the Wandsworth County Court was or was not a ‘pending land
action’, and so a ‘pending action’, within the Land Charges Act 1972, sections
5, 17(1). Mr Pascoe, of course, says that it is not, whereas Mr Elland says
that it is.
The meaning of
‘pending land action’ has been discussed in five recent cases to which I should
refer. In Heywood v BDC Properties Ltd (No 2) [1964] 1 WLR 267,
the defendants alleged that the plaintiffs had agreed to sell certain land to
them, and registered estate contracts as land charges in respect of the alleged
contracts. The plaintiffs then issued a writ seeking vacation of the land
charges on the ground that there were no contracts in existence; and on motion
they obtained the order that they sought. The defendants then registered the
plaintiffs’ action as a pending action, and the plaintiffs applied for the
vacation of this registration. Plowman J held that the action was not a pending
action because neither party was making any claim to land against the other.
The plaintiffs were doing no more than seeking a declaration that that was no
contract relating to the land between the parties, and there was old authority
which showed that a pending action was an action asserting a claim to land or
an interest in land. The Court of Appeal reversed this decision on a procedural
point (see [1964] 1 WLR 971), but the decision on the pending action point was
not affected. In Taylor v Taylor [1968] 1 WLR 378, a wife took
out a summons under the Married Women’s Property Act 1882, section 17, in which
she sought an order for the sale of the matrimonial home and a declaration that
she was entitled to half the proceeds of sale. Both in the Land Charges Act
1925, section 20(6), and in the Land Charges Act 1972, section 17(1), ‘land’ is
defined as excluding an undivided share in land. The Court of Appeal held that
the wife’s summons was not a pending action. Then in Calgary and Edmonton
Land Co Ltd v Dobinson [1974] Ch 102, I followed the Heywood case
and held that a summons in the Companies Court to restrain the liquidator from
disposing of certain land belonging to a company was not a pending land action,
for it claimed no proprietary right in land and sought merely to restrain a
disposition of land.
The other two
decisions were on the other side of the line. In Whittingham v Whittingham
[1979] Fam 9, on a divorce the wife applied for an order transferring her
husband’s house to her; and the Court of Appeal, affirming Balcombe J, held
that this application was a ‘pending land action’ and so was registrable as a
pending action. It mattered not that the wife had no existing proprietary right
in the house; it sufficed that she was seeking an order that would give her
such a right. Finally, there was Greenhi Builders Ltd v Allen
[1979] 1 WLR 156. There, a number of houseowners brought separate actions
against some builders, claiming, inter alia, that they had easements of
support for their houses which were being interfered with by the builders. They
sought an injunction to restrain future interferences, with a mandatory order
to make good past interferences, and damages. Browne-Wilkinson J held that an
action claiming an easement was a ‘pending land action’, especially when it
included a claim to the mandatory order sought. I should mention that this case
and Taylor v Taylor were not cited in argument before me.
If one returns
to the definition of ‘pending land action’, it seems plain that in this case
the opening words are satisfied, namely ‘any action or proceeding pending in
court’; and no contention to the contrary has been put forward. Nor is there
much difficulty about the concluding words, ‘land or any interest in or charge
on land’. ‘Land’, I may say, is given a wide definition in section 17(1) of the
Act of 1972. The difficulty lies in the two words ‘relating to’. As was
mentioned in a passage in the Calgary case at p 105 which was cited in
the Whittingham case at p 22, there must be some restriction on the
literal width of these words, for otherwise an action to restrain a nuisance
alleged to emanate from X’s land would be registrable. The question is what
that restriction is.
In the Calgary
case I did not seek to lay down any exhaustive definition, and I do not seek to
do so now. (In view of what Stamp LJ said on p 23 of the Whittingham
case, I may also say that I certainly did not intend to suggest that only a
claim to an existing interest in land would suffice, so that a claim to have a
new right granted would not: I would respectfully adopt what Eveleigh LJ said
about this on p 24.) What are in
question in this case are not proceedings which merely seek to restrain any
disposition of the land or to obtain a declaration that no contract to sell it
exists. On the other hand, the proceedings do not seek to obtain a transfer of
the land or to assert an easement over it. The proceedings are a first step
towards launching further proceedings which may merely claim damages or may
seek forfeiture of the lease or may do both.
I propose to
take the matter by stages. First, if the proceedings were direct proceedings
for forfeiture, would they be registrable as a pending action? Plainly they would not be proceedings which
claim some proprietary right in the land, in any ordinary sense of the words.
What they would seek would be to destroy an estate in the land. Yet I think
that one must consider the effect of such a distinction. If the immediate
reversioner on a lease purchases that lease, the normal result will be that the
lease will perish by surrender, and the reversion will become an interest in
possession; and if the reversioner seeks to enforce the agreement, that plainly
would fall within the authorities as being a pending land action. If instead
the reversioner sues for forfeiture, the result, if he succeeds, will be much
the same: the lease will disappear and the reversion will become an interest in
possession. Thus although the forfeiture is in one sense an act of destruction,
from another aspect it may be regarded as an act of acquisition; for it
augments the reversioner’s interest in the land.
Even if I am
wrong in this view, I have to remember that what I am primarily concerned with
is the phrase ‘relating to land’: and on any ordinary meaning of those words,
proceedings for the forfeiture of a lease of land seem to me to fall within
that expression. I do not think that there is anything in the authorities which
precludes me from giving effect to this view. The cases which speak in
terms of a claim to specific property, or the recovery or assertion of title to
specific property, or a claim to some proprietary right in land (see Calgary
case at p 107) do not seem to me to connote that proceedings to destroy an
interest in land cannot be a pending land action. After all, the statutory
words ‘relate to’ are very general in their meaning, and although there must be
some limit to this meaning, I would have thought that proceedings for the
destruction of an interest in land ‘relate to’ the land as much as proceedings
for the acquisition of an interest in the land. In each case the proceedings
directly affect an estate or interest in the land; and without aspiring to any
definition, exhaustive or otherwise, I would regard such an approach as
providing a helpful guide to proceedings which fall within the statutory
definition.
There is a
further consideration. In the Whittingham case at p 23, and in the Greenhi
case at p 159, there is some discussion of it being material to take into
account whether, if the action is not registered, a third party, acquiring the
land before judgment in the action and without notice, will take free from the
plaintiff’s claim. In the case of leaseholds, it seems to me to be important
that a purchaser should, by searching, be able to discover pending proceedings
for forfeiture, for otherwise he might be purchasing something which, on
service of the proceedings for forfeiture, had ceased to exist. Nearly a year
ago I had such a case (Pips (Leisure Productions) Ltd v Walton,
May 23 1980, unreported); and it was a striking warning to purchasers of
leaseholds. It seems to me that this consideration supports the view that
proceedings which, if successful, will destroy an interest in land ought on any
fair reading of the words to be regarded as proceedings which ‘relate to’ that
land.
That, however,
is not the end of the matter. The present proceedings in the county court are
not proceedings for forfeiture of the lease, but at any rate on one view are at
best at one remove from such proceedings. Each originating application merely
seeks ‘leave to commence an action’ against the plaintiff company ‘for breach
of the repairing covenant’ in the lease. Under section 1(3) of the Act of 1938
such leave is needed both for proceedings for forfeiture and for proceedings
claiming damages. There is nothing in the originating application to show that,
if leave is given, it is proceedings for forfeiture that will be commenced,
with or without a claim for damages. The probability, however, is that
forfeiture would be sought, and in any case the affidavit of a solicitor filed
on behalf of the defendant company states in terms that the defendant company
is seeking leave ‘to take forfeiture proceedings’. The next paragraph, indeed,
refers to the prospects ‘of obtaining forfeiture itself of both leases’. In
those circumstances, it seems to me that the proceedings in the county court
may fairly be regarded as a preliminary stage in the forfeiture proceedings
which the defendant company wishes to take. I doubt whether an action for
damages for breach of covenant is, by itself, a ‘pending land action’, but I
think that proceedings for leave to commence an action which may include a
claim for forfeiture of a lease, and is intended to do so, sufficiently relate
to the land under lease for them to be a ‘pending land action’. I so hold. It
follows that the claim in the motion for an order vacating the registrations
fails, and so the motion will be dismissed.
