Long lease — Agreement to surrender — Surrender and grant of new long lease — Power of county court under section 23(3) of the Leasehold Reform Act 1967 — Whether power applies to a surrender — Whether agreement remains executory — Appeal by tenant dismissed
By an assignment dated April 27 1976 the plaintiff acquired a lease of 26 and 26A Yeomans Row, London SW3, subject to a subtenancy of 26A, for 99 years from March 19 1898. By reason of a division of the building, 26 alone was not within the Leasehold Reform Act 1967. By an agreement made on September 10 1985 the plaintiff surrendered his lease and, for a consideration of £200,000, was granted a lease of only no 26 on September 14 1985 for a term of 60 years. On November 9 1989 the plaintiff served notices under the 1967 Act claiming, inter alia, the right to acquire the freehold of both 26 and 26A. His contention that the county court should exercise its powers under section 23(3) of the 1967 Act to set aside, vary or give other relief in relation to the 1985 agreement was rejected by His Honour Judge Phelan in the West London County Court (July 21 1989). The plaintiff appealed.
Held The appeal was dismissed.
The applicant seeking relief under section 23(3) must be a person who is entitled to enfranchisement and to acquire a freehold or a long lease. Where he enters into an agreement without the prior approval of the court, section 23(3) is invoked. However, there is a distinction between an agreement to surrender and a surrender. Decisions on the comparable provisions in the Landlord and Tenant Act 1954 preserve that distinction. The 1985 agreement was not executory for the purposes of section 23(3) once the new lease had been granted. Accordingly, the plaintiff could not rely on section 23(3); it did not apply to the surrender.
Duke of Westminster v Oddy (1984) 270 EG 945; Joseph v Joseph [1967] Ch 78; and Allnatt London Properties Ltd v Newton [1984] 1 All ER 423 considered.
Martin Griffiths (instructed by Winckworth & Pemberton) appeared for the appellant; and Paul Morgan (instructed by Denton Hall Burgin & Warrens) appeared for the respondent.
