Did You Miss? Prescott Place Freeholder Ltd V Batin [2023] EWHC 1445 (Ch)

• Published date: 05 July 2023
• Subject Matter: Finance and Banking, Real Estate and Construction, Charges, Mortgages, Indemnities, Landlord & Tenant - Leases
• Law Firm: Gatehouse Chambers
• Author: Ms Lina Mattsson

Following trial, Mr Justice Richards had to determine various consequential matters. The key question was whether an order made pursuant to s 19 of the Landlord and Tenant Act 1987 was in interest in land or created purely personal rights and obligations.

C2-8 were long residential leaseholders. C1 was a company nominated by them to acquire the freehold of their building. SD became registered proprietor of the property in 2004. SD held the property on trust for D2. D2's interest was unregistered. In May 2014, SD transferred the property to D1 for '125,000. The 2014 Transfer resulted in D1 taking free of D2's beneficial interest. The 2014 Transfer was a "relevant disposal" for the purposes of s4 of the 1987 Act. That triggered C1's right under the 1987 Act to seek to acquire the freehold interest in the property from D1.

On 25 February 2019, Cs commenced proceedings in the County Court seeking an order under s19 of the 1987 Act requiring D1 to convey the freehold interest in the property to C1. On 25 October 2019, HHJ Lethem made the Section 19 Order that required D1 to convey the freehold interest in the Property to C1 "on the same terms as [D1] acquired the freehold of the Property, or alternatively on terms as may be determined by the [FTT]". C1 entered a unilateral notice in respect of the Section 19 Order in the Charges Register of the freehold title at HM Land Registry on 11 November 2019.

After the Section 19 Order was made, and before 14 January 2021, D1 and D2 executed the Equitable Leases granting long leases over various flats to D2 for no premium and a nominal rent. The Equitable Leases were backdated to make it appear as though they had been executed in 2014. Their purpose was to devalue the freehold interest that C1 was entitled to acquire pursuant to the Section 19 Order.

Cs obtained an injunction restraining D2 from registering any interest arising out of the Equitable Leases at HM Land Registry.

On 12 April 2021 the FTT determined that the consideration that C1 should pay to acquire the property in accordance with the Section 19 Order was '125,000.

Jamal Demachkie acted for D1 and D2's mortgagee, who was joined as an Interested Party following the trial.

Interest in land

The judge held that a s.19 Order is an interest in land from the moment it is made. First, the order had been made against D1, who was the registered proprietor of the freehold interest in the property. Therefore, D1 had a sufficient proprietary interest in the property...