THE MASTER OF THE ROLLS: We are here concerned with a house known as 51 Wellington Road, St. Marylebone in the County of London. In 1949 the freeholders (the British Transport Commission) granted a lease of the whole of the house to Mrs Beatrice Caswell for 42 years from 24th June, 1949, at £200 a year. Mrs Beatrice Caswell duly registered this leasehold in the Land Registry. She was the first proprietor and this was the first registration of this leasehold interest. The register, much abbreviated, was then as follows:-
Title Number LN 72776
A. Property Register
51 Wellington Road, First Registration: 1 July, 1949. Lease dated 9 June 1949 from the British Transport Commission to Beatrice Caswell for 42 years from 24 June 1949, rent £200.
B. Proprietorship Register Title Number LN 72776 Title: Good Leasehold:
Proprietor: Beatrice Caswell registered 1 July 1949.
C. Charges Register
(No entry at the beginning).
The Land Registry issued a Land Certificate to Mrs Caswell which was an exact copy of the register.
Soon after she took the lease Mrs Beatrice Caswell divided the house into four flats. On 29th May, 1952 she granted to her husband, Mr Eric Caswell, a sub-lease of one of the flats (Flat C) for 39¼ years from 29th March, 1952, at a rent of £100 a year. This term was to run until 2lst June, 1991 (three days less than the head lease). Seeing that the term was for more" than 21 years, Mr Eric Caswell could have registered this sublease straight away in the Land Registry. He could have applied for a first registration of this new leasehold interest, and get a new title number for it, and a new register for it. But unfortunately he did not do so.
Early in June 1952 Mrs Beatrice Caswell transferred the head lease of the whole house of 42 years to the Crittall Manufacturing Co. Ltd. This transfer was duly entered on the register for this leasehold under Title No. LN 72776 which I have abbreviated above. It was done by striking out the entry in the Proprietorship Register which said: "Proprietor: Beatrice Caswell registered 1 July, 1949" and making a new entry: "Proprietors The Crittall Manufacturing Co. Ltd., registered on 5 June, 1952". Crittalls knew all about the sub-lease of the one flat to Mr Eric Caswell. They acknowledged him as their tenant and accepted rent from him.
Nearly 10 years later, on 2lst March, 1962, Crittalls transferred the head lease of the whole house to Strand Securities, Ltd. (the plaintiffs in this action) for £4,500. The plaintiffs knew all about the sub-lease of the one flat to Mr Eric Caswell, and the price was agreed on the basis that it was a valid and subsisting sub-lease.
When Mr Eric Caswell heard that Crittalls were selling the house over his head, he then for the first time applied to the Land Registry to register his sub-lease of the flat. He applied for it as a first registration of this estate in land. His solicitors filled in Form 3B but, according to that form, he ought to send with it his lessor's land certificate. He could not do this because he had not got it. His application was received in the Registry on 5th April, 1962, but they did not accept it. They said it was incomplete. He ought, they said, to produce the land certificate of the superior head lease under which he held, namely, Title No. LN 72776. Of course, he could not produce it. He had no right to that land certificate. A lessee has no right to the production of his lessor's title. So his application stood in abeyance awaiting the lessor's land certificate.
Then the plaintiffs applied to register the transfer of the whole house to them. Their application was received in the Registry on 24th April, 1962. It was accompanied by the land certificate for the head lease, namely, Title No. LN 72776. The Registry treated this application as complete on 24th April, 1962, But at the same time they treated the application by Mr Eric Caswell (to register his sub-lease) as complete: because they thought that, having now got the land certificate of the superior lease in their hands, his application was complete. So in their view the two applications were completed at the same times and they gave them the same application number.
The Registry were embarrassed by these two simultaneous applications (as they regarded them). It was obviously impossible to accede to both the lease and the sub-lease being registered free of the other. The Registry would be committing the cardinal sin of having two conflicting interests on the Register at the same time. There is a good deal of intervening history which is set out in the Judgment of the learned Judge (1964, 3 Weekly Law Reports, p.623). I will pass straight to the next important date in law.
Eventually, on 28th November, 1962, the Registry acceded to the application of the plaintiffs and registered the transfer to them of the whole house as if free of the sub-lease. The Registry entered the transfer to the plaintiffs on Title No. IN 72776. It was done by striking out the entry in the proprietorship register in favour of the Crittall Company and making a new entry: "Proprietors Strand Securities, Ltd. registered on 24th April, 1962". It should be noticed that the entry gives the date of registration as 24th April, 1962. This is because the registration, when made, dates back to the day on which the application was delivered to the Registry, see Rule 83(2). The Registrar did not make any entry in that register (Title No. LN 72776) of the sub-lease to Mr Caswell. If he had considered it proper to make a note of it, he would have entered it in the charges section and have made a note saying that a sub-lease for 39¼ years had been granted to Mr Eric Caswell. But he made no entry. On the face of the register, therefore, under Title No. LN 72776 there was a clear title to the leasehold interest for 42 years in favour of Strand Securities Ltd., and no incumbrance or other entry registered against it at all.
This put the plaintiffs, Strand Securities, Ltd. in a strong position. Section 23 of the Land Registration Act, 1925, says that a transferee, when registered, takes subject to the incumbrances and other entries, if any, appearing on the register, but free from all other estates and interests whatsoever. The plaintiffs, Strand Securities, Ltd., rely on this section to oust Mr Caswell. They say that, having got on the register, with no note on it of Mr Caswell's sub-lease, they take free from his sub-lease. They claim possession.
(I ought, in parenthesis, to add this: If Strand Securities, Ltd., had been more expeditious in applying to register their transfer, they would have been in an even stronger position. On 19th March, 1962, they got an official certificate of search. It disclosed a clear title to the lease in Crittalls with no incumbrance or other entry against it. On 21st March, 1962, Crittalls executed the transfer to Strand Securities, Ltd. If Strand Securities Ltd. had applied to register this transfer within fourteen days of the official certificate, i.e. before 5th April, 1962, they would have taken the transfer free from any entry made after the date of the official certificate. This is clear from Rule 1 of the Land Register Rules, 1930, as amended by Rule 1 of the Land Register Rules, 1936. But Strand Securities did not apply to register the transfer within the 14 days. They did not apply until seven weeks after the official certificate. So they cannot rely on the 14 day rule). They have to rely on Section 23 of the Act.. But, even so, this is strong for them, seeing that they are now on the register as entitled to the lease and there is no note on it of Mr Caswell's sub-lease.
Mr Eric Caswell claims that the Land Registry did wrong to refuse his application of 5th April, 1962, to register his sub-lease. It should have been accepted and registered as a first registration as of that date; and it should have been noted on the title of the head lease (LN 72776) as of that date, 5th April, 1962. If that had been done, it would have been an entry already on the register at the time that the plaintiffs' transfer was registered as of 24th April, 1962, and the plaintiffs would have taken subject to it. He asks that the Register be rectified so as to give effect to his sub-lease. Alternatively he says that, if his application was not complete until 24th April, 1962, so that the two applications were received the same day, his sub-lease should be given priority over the plaintiffs' transfer.
In the further alternative Mr Eric Caswell says that in any case he was, at the date of the transfer to the plaintiffs, in "actual occupation" of the flats and that his rights under the sub-lease were an "overriding interest" under Section 70(1)(g) and accordingly he is protected without registration. This point is separate and self contained and I will consider it after I have dealt with the other points.
The case raises the questions What is the proper course for the Land Registrar to take when he is asked to register a leasehold interest (for more than 21 years) which has never been registered before? The present case concerns a sub-lease derived out of a superior lease, but the question is the same in the case of a lease derived out of the freehold. Sections 4, 19 and 20 (which relate to freeholds) are in all material respects the same as Sections 8, 22 and 23 (which relate to leaseholds). It is, however, much more simple to state the position when a freeholder grants a lease: and I will, therefore, take that case. These are the steps which, in my opinion, should be taken on first registration of a lease:-
1. The lessee must apply to be registered as the first proprietor of his leasehold interest. His application must be accompanied by his own lease, but it need not be accompanied by the freeholder's land certificate. We are told that the Registrar insists that the lessee shall produce the freeholder's land certificate showing the freeholder's title to his freehold. If it is not produced, the Registrar treats the application by the lessee as insufficient and incomplete. In my opinion that practice is wrong. In the absence of express agreement, a lessee has no right to call for his lessor's title. Likewise he has no right to call for his lessor's land certificate. The Registrar should not insist on the lessee producing a document to which he has no right. The application is complete without it.
The Registrar seeks to justify the practice by reference to Section 64(1)(a) (see his letter of 5th April, 1962). He reads the word "register" in that sub-section as if it means the entire collection of papers in the Land Registry, which comprise over a million separate registers: and he thinks that Section 64(1)(a) requires a first registration to be entered in that "register". But I think it plain that Section 64(l)(a) does not apply to a first registration at all. It only applies to an entry to be made in a register which is already in being, ready to receive the entry. Suppose a freehold is being transferred. The word "register" there means only the freeholder's register of one or two pages in respect of which a land certificate has already been issued to the freeholder. When an entry of a transfer is to be made in that register, the land certificate must of course be produced. But it need not be produced when a lease is to be noted. The exemption at the end of Section 64(1)(c) makes that quite clear.
The Judge was much influenced by the practice of the Land Registry. He thought he ought to give weight to it, just as to the practice of conveyancers. I do not agree with this. We cannot allow the Registrar by his practice to make bad law: and it is bad law to insist on the lessee producing his landlord's land certificate - to which he has no right.
2. As soon as the application to register the leasehold interest is received, the Registrar must enter it in the list of pending applications , which is open to the public, see Rules 10 and 12. Thereafter anyone who makes a search of the freeholder's register is told that there is a pending application affecting it, and the nature of the application; namely, to register a lease, see Curtis & Ruoff, pages 406- 7, 705.
3. It is desirable, however, that before the lease is registered, some enquiry should be made of the freeholder, so as to see that the lease is genuine. If it is genuine, it is desirable that an entry should be made in the freeholder's register. Else a purchaser might buy the freehold without knowledge of the lease. The Act and Rules make provision for this. As soon as the Registrar receives the application from the lessee to register the lease, he must give notice to the freeholder. This appears from Rule 46 where "is registered" clearly means "is being registered". The freeholder has seven days in which to object. In the ordinary way he will not object, because it will be he who has granted the lease. In that case, there being no objection, the Registrar should proceed to enter the lease as a first registration. He should give it a new title number, and enter the lessee as the proprietor of this new leasehold interest. But he should also, at the same time, enter a notice in the freeholder's register (in the charges section of it, see Rule 7(b)) saying that the lease has been granted out of the freehold. The lease then is an incumbrance on the freehold; and the freeholder, and all persons deriving title under him, are affected by notice of it, see Rule 46(2) and Section 48.
4. The important thing to notice is that, when the registration is eventually effected of the lease, it takes effect as of the date on which the application was delivered at the Land Registry, see Rule 83. And the note on the freeholder's register also takes effect as a notice effected on that day.
The reason is because Section 19(2) for freeholds (the corresponding section for leaseholds is Section 22(2)) treats the registration and the noting as contemporaneous: and Rule 46(2) equates the noting under that rule with a notice under Section 48 which takes effect as of the date of application, see Rule 83.
5. Thus far we have got the note about the lease on the freeholder's register which is kept in the Land Registry. But it is desirable that this note about the lease should also be entered on the freeholder's land certificate. The freeholder holds this himself: and the Registrar has no right to call for this. Section 64(1)(c) makes it clear that it need not be produced. There is no reason, however, why the Registrar should not ask the freeholder to produce it voluntarily: and if it is forthcoming (as it usually will be) he can enter the notice on it. If it is not forthcoming, all that the Registrar can do is to wait until the freeholder's land certificate comes into the Registry on some other matter and then enter the notice on it.
6. Here I will go back a little to paragraph 3 above. If the freeholder, within the seven days, objects to the lease being entered on the freeholder's register, then the Registrar should hear and determine the objection, subject to an appeal to the Court, see Rule 298. If the objection is disallowed, the registration and noting will proceed and will take effect as of the date of application. If the objection is upheld, then the lease should not be registered and no note be made on the freeholder's register.
7. It is obvious that some time may elapse between the date of the application to register the lease and the eventual registration, and the noting on the freeholder's register. Suppose in the interval the freeholder agrees to transfer his freehold (or grant a lease) to someone else. The transferee or lessee, before completing, will of course search at the registry. Upon this search, he will be told of any pending application which affects the land. In particular he will be told that there is an application to register a lease as a first registration: and he will know that, if this application is granted, it will date back to the date of the original application. So it will take priority over the transfer or lease which is then in contemplation. So it does appear that under the steps I have stated there is good protection against fraud.
Applying the law as I have stated it, it is apparent that the application made by Mr Eric Caswell to register his sublease was complete on 5th April, 1962. There was no need for him to produce his lessor's land certificate. It should have been registered as of that date, 5th April, 1962, and thus have gained priority Over the transfer to the plaintiffs which was not registered until later, namely, as of 24th April, 1962. The register should be rectified so as to make a first registration of Mr Caswell's sub-lease, as of 5th April, 1962: and a note should be made on the register of the plaintiffs' title (Title No. IN 72776) showing that the sub-lease, registered as of 5th April, 1962, was an incumbrance on the land binding on the plaintiffs. The plaintiffs cannot ignore the sub-lease. They take subject to it.
That is sufficient to decide the case: but there is another point which was argued before us. Even if Mr Eric Caswell did not apply in time to register his sub-lease, he is not necessarily defeated. He may have an "overriding interest" within Section 70(1)(g). This sub-section expressly preserves "the rights of every person in actual occupation of the land, or in receipt of the rents and profits thereof".
The facts in this regard are these. Prom 1952 until September 1961 Mr Caswell sublet Plat C to various tenants. But in September 1961, when the then sub-tenant left, he let his stepdaughter, Mrs Reinold, live there with her two children. She had been deserted by her husband. So Mr Caswell allowed her to go into the flat and live there rent free. He felt he had to do it to help her. She took some of her furniture into the flat, but there was a good deal there which belonged to Mr Caswell, in particular, carpets and fittings, a bed, a desk, a refrigerator, a cooker and some chairs. Mr Caswell and his wife lived in the country, but they used the flat when they wanted to change there when going out in the evening. At first the rating authority sent the rate demand to Mrs Reinold and she sent it to Mr Caswell and he paid it. Afterwards Mr Caswell asked them to send the demands to him. They did so, and he paid them. The telephone of Flat C was in the name of Mrs Caswell.
In February or March 1962, before the plaintiffs took the transfer of the superior lease, they sent two representatives to Flat C. They saw Mrs Reinold's daughter and said to her, "Have you a lease in this flat?", to which she replied, "Yes, an extremely long one" ,. meaning, of course, that Mr Caswell had one.
Section 70(1)(g) is an important provision. Fundamentally its object is to protect a person in actual occupation of land from having his rights lost in the welter of registration. He can stay there and do nothing. Yet he will be protected. No one can buy the land over his head and thereby take away or diminish his rights. It is up to every purchaser before he buys to make inquiry on the premises. If he fails to do so, it is at his own risk. He must take subject to whatever rights the occupier may have. Such is the doctrine of Hunt v. Luck, 1901, 1 Chancery Division, p.45, for unregistered land. Section 70(1)(g) carries the same doctrine forward into registered land. But with this difference. Not only is the actual occupier protected, but also the person from whom he holds. It is up to the purchaser to inquire of the occupier, not only about the occupier's own rights, but also about the rights of his immediate superior. The purchaser must ask the occupier; "To whom do you pay your rent?" And the purchaser must inquire what the rights of that person are. If he fails to do so, it is at his own risk for he takes subject to "the rights of every person in actual occupation or in receipt of the rents and profits thereof".
In this case it is clear that Mrs Reinold was in actual occupation of the flat. The plaintiffs therefore took subject to her rights, whatever they were, see National Provincial Bank v. Hastings Car Mart, 1964 Chancery, p.665. She was not a tenant but only a licensee, see Foster v. Robinson, 1951, 1 King's Bench, p.149, Cobb v. Lane, 1952, 1 Times Law Reports, p.1037. She had no contractual right to stay there. Her licence could be determined at any time and she would have to go in a reasonable time thereafter, see Minister of Health v. Bellotti, 1944 King's Bench, p.298. So the plaintiffs could get her out, provided always that they could get rid of Mr Caswell's sub-lease.
But although Mrs Reinold was in actual occupation, it is said that Mr Caswell was also in actual occupation. We have had several cases lately in which we have held that "possession in law is, of course, single and exclusive; but occupation may be shared with others or had on behalf of others", see Hills (Patents) Ltd. v. University College Hospital, 1956, 1 Queen's Bench, pp.90, 99, and Willis v. Association of British Universities, 1964, 2 Weekly Law Reports, p.947. In this case it is said that Mr Caswell did share the actual occupation of the flat with Mrs Reinold.
I would like to hold that Mr Caswell was sharing the occupation of the flat with Mrs Reinold. But I cannot bring myself to this conclusion. The truth is that he allowed her to be in actual occupation, and that is all there is to it. She was a licensee rent free. And I fear that it does not give him protection. It seems to be a very rare case - a case which the legislature did not think of. For it is quite clear that if Mrs Reinold had paid a token sum as rent, or for use and occupation, to Mr Caswell, he would be "in receipt of the rents and profits" and his rights would be protected under Section 70(1)(g). Again if Mr Caswell put his servant or caretaker into the flat, rent free, he would be protected because his agent would have actual occupation on his behalf. It is odd if Mr Caswell is not protected simply because he let his stepdaughter in, rent free. Odd as it is, however, I fear the words of the statute do not cover this case. Mr Caswell does not succeed on this point. But he does on the other. And on that ground I would allow this appeal. LORD JUSTICE BARMAN (read by LORD JUSTICE RUSSELL): I have had the advantage of reading the Judgments of the Master of the Rolls and Lord Justice Russell and I propose only to say a very few words of my own.
In the first place, I agree with both Judgments that as a matter of construction of Section 64, the Land Registrar was wrong and that he had no right to insist on the production of a land certificate covering the head leasehold interest before entertaining the registration of the sub-lease. If this be right, the first defendant's application should have been recorded on the 5th April, 1962, in the book kept for the purpose of recording pending applications - see Rule 83(l). Upon this footing I reject Mr Albery's contention that because an entry on the register would not or might not have appeared as a result of the first defendant's application before the date of the plaintiffs' application on the 24th April, the Registrar's mistake made no difference. The book was open to inspection on the 24th April and the plaintiffs must take notice of its contents. The only way in which the defendant could have been defeated, as I see it, would have been if the plaintiffs, having applied for an official search before the 5th April, had applied within the 14 days allowed by the 1930 Rules after that application to register their interest. This they did not do, so lost the opportunity.
The conclusions reached so far are enough to decide the case in the appellant's favour, but other questions were argued and I think I should allude to them shortly.
First logically is the question whether, if the Registrar was right on the question of the construction of Section 64, he was also right in treating the receipt of the land certificate on the 24th April as a receipt not only for completing the plaintiffs' application but of completing the defendant's application. This, I must say, is an extraordinary result, for the last thing the plaintiffs intended to do by applying to register their own title was to perfect the application of a competitor. Nevertheless both Mr Justice Gross and my brother Russell feel no doubt that this was the effect. I certainly entertain a doubt on this point.
Rule 269(1) provides that a certificate may be deposited in the Registry with written directions that it is to be held for a specified purpose only. Section 269(2) provides that where such directions are given, the deposited certificate may not be used for any other purpose here relevant.
The certificate here was lodged by the plaintiffs on the 24th April, the object of that lodgment being the registration of a transfer of the lease from Crittalls to the plaintiffs and it was argued that application for one purpose implies that the certificate is not to be used for any other and that this was a written direction within the rule and it was to be held for that purpose only. I feel some sympathy for this view which avoids what is to me a surprising result, but I do not think it necessary to decide this question as it makes no difference to the result of the appeal.
If Mr Justice Cross and my brother Russell are right on this point, I cannot see why of the two simultaneous applications, the defendant's should be treated as subsequent to the plaintiffs'. I, like my brother Russell, think it ought to be on that footing treated as obtaining priority.
Lastly is the question of whether the second defendant had an overriding interest and so had no need to register. On this question I see the force of the arguments on both sides and I do not think I need restate them. I too on the whole think that the second defendant had no overriding interest.
I concur in allowing the appeal.
LORD JUSTICE RUSSELL: The plaintiffs originally sued the first defendant by writ issued on the 10th August, 1962, claiming a declaration that the sub-lease of Flat 0 is void as against the plaintiffs by reason of failure to register the same in accordance with the provisions of the Land Registration Act, 1925, and claiming possession. This action was discontinued without further pleading on the 27th December, 1962. In the meantime the transfer of the leasehold interest to the plaintiffs had been registered on title LN 72776 as of 24th April, 1962, without Mr Caswell's sub-lease having been noted on that title.
By further writ against both defendants on the 1st March, 1963, the declaration claimed was the same, with the added ground of avoidance, of failure to have notice of the sub-lease noted on the leasehold title LN 72776 to the property whereof the plaintiffs became registered proprietors as of the 24th April, 1962. The statement of claim relied solely upon the failure to register the sub-lease or to have notice thereof noted on title LN 72776 as rendering the sub-lease not binding on the plaintiffs and void as against the plaintiffs by reason of Section 23 of the Act. It was not suggested that the sub-lease was ever void as against, and not binding on, Crittall. Crittall acquired the superior leasehold (Title LN 72776) from. Mrs Caswell by transfer dated 30th May, 1952, the sub-lease to Mr Caswell having been granted by her on the 29th May, 1952. Crittall was registered as proprietor on 5th June, 1952. The sub-lease was not registered, nor was it noticed on the head lease title. Crittall never challenged the sub-lease. Evidence of the situation at 5th June, 1952,, was sketchy, which is not surprising since it was not suggested by the plaintiffs in the pleadings that the sub-lease had never been binding, even upon Crittall, or that consequently even actual occupation by Mr Caswell on 24th April, 1962, would be irrelevant under Section 70(l)(g) because he had no rights: such as it was, the evidence leaves it uncertain whether on 5th June, 1952," the flat was vacant, or furnished, or in the course of being decorated, or already the subject of a furnished letting. For my part I think on the pleadings it is proper to proceed on the assumption, which the plaintiffs were apparently prepared to make, that notwithstanding lack of registration the sub-lease was in any event enforceable against Crittall, and that Crittall could not have resisted such registration.
Mr Caswell claims to have had at 24th April, 1962, an overriding interest in the land as being then a person in actual occupation thereof within the scope of that phrase in Section 70(l)(g). If this be correct, lack of registration cannot harm him on the facts, for admittedly the plaintiffs had full knowledge of his rights as sub-lessee at all times. On that basis the plaintiffs' action would necessarily fails whether technically an order for rectification should be made on the counterclaim is another matter, since overriding interests are not ordinarily entered on the register. I should think the matter in that event should be left to the Registrar, with a strong intimation of opinion that this is eminently a case in which the overriding interest should be expressly recognised by registering the sublease as a separate title and noting it on title LN 72776,
Firstly then, does Mr Caswell succeed in establishing an overriding interest subject to which the registration of the plaintiffs as at 24th April, 1962, must have taken effect? At that date and for some time past he had allowed the second defendant, his stepdaughter and her children to live there rent and rate free, her husband having left her, as a matter of compassion and family obligation. Some of the furniture and fittings were his property. He and other members of his family used the flat as a London rendezvous and for changing dress and so forth. He did not reside there himself. She was his mere licensee, as also was her son. Another flat in the same building had been similarly used at an earlier date while the flat now under consideration had been let to a tenant. The telephone was listed in his wife's name, as it would have "been (as he in effect explained) had he and his wife been residing there. It is to be remarked that if instead of making his application on 5th April, 1962, for registration he had moved up to London and occupied the son's bedroom until after 24th April, or received from or demanded of his stepdaughter during the same period a penny a week for the privilege of remaining there, he would have had an unanswerable claim to his sub-lease as an overriding interest under Section 70(l)(g) as being in the one case a person in actual occupation and in the other in receipt of the rents and profits. Of course he did neither of these things. Their possibility, however, serves to show how rare it must be that an actual sub-lessee entitled to possession is not a person either in actual occupation or in receipt of the rents and profits. It is, however, to be observed that paragraph (k) of Section 70(l) can only operate independently of paragraph (g) in just such rare circumstances: though may be paragragh (k), which is an express reflection of the fact that under Section 22 a lease such as is mentioned in paragraph (k) cannot be registered and need not be noted on the superior title and nonetheless takes effect as a registered disposition, was primarily inserted to avoid the need in such cases for any enquiry into the facts.
On the facts was Mr Caswell at 20th April, 1962, a person in actual occupation, though he was not in any ordinary sense residing there or treating it as his home, and his stepdaughter and her family were allowed by him to reside there? As a matter of the ordinary use of language I would not consider Mr Caswell to be such. For him it was argued that the phrase "in actual occupation" derives from cases in which "actual occupation" and "actual possession" are used indifferently to describe a condition of enjoyment of the land itself, and that the phrase "actual occupation" here involves that form of the legal concept of possession as distinct from the other or notional forms of that concept consisting of the receipt of money payments derived from land, or of the right to possession though the land be vacant. And it was argued that "actual possession" was avoided by the draftsman as a phrase because of the difficulty which would flow from the definition of "possession" in Section 3 (xviii). Reference was made to a number of authorities, including cases in the fields of rating, poor law, and landlord and tenant, with a view to showing that possession, and therefore occupation, may be had through the medium of another. Suppose, it was said, that Mr Caswell employed a resident caretaker to look after the flat in question, would Mr Caswell not be a person in actual occupation? I think that is correct. Then, it was argued, that is because the caretaker would be his licensee, bound to go at the will of Mr Caswell: and that was the position of his stepdaughter. But I think that here is the distinction between occupation by the caretaker as a matter of duty on behalf of Mr Caswell, and the occupation of the stepdaughter on her own behalf: both are licensees, but the former by her occupation for which she is employed is the representative of Mr Caswell, and her occupation may therefore be regarded as his. The proposition that in each case Mr Caswell is in actual occupation because ne±her caretaker nor stepdaughter has a right to occupy independently of him seems to me too broadly stated and to ignore that distinction. I do not say that a contract of employment or agency with the person residing there is essential to actual occupation by the other person. I think that it might well be that if a house was used as a residence by a wife, separated from the tenant , her husband (whether or not in desertion), he could also be regarded as in actual occupation-through her: the question whether the husband was also a person in actual occupation did not, of course, arise in the Hastings Car Mart case. But this conception, even if valid, could not extend to the relationship in the present case.
Nor, it seems to me, can the presence on the premises of some of Mr Caswell's furniture, nor the previously mentioned use by him and others of the family of the flat, nor the fact, which I am prepared to assume (though it was not proved), that he had a key, nor a combination of those matters, constitute actual occupation by Mr Caswell.
Assuming that there was no overriding interest, we step on very technical ground. The plaintiffs state their case shortly: We are registered proprietors of the superior interest with effect from 24th April, 1962: on that date there was no mention on the superior title of notice of the sub-lease: by force of Section 23 we thereupon became entitled to the superior interest free from the sub-lease. At least on the surface, that contention seems unanswerable. But below the surface lie facts relevant to the conclusion whether there should be rectification of the register.
The transfer by Crittall to the plaintiffs was executed on 21st March, 1962. On 5th April, 1962, Mr Caswell by his solicitors made a written application to the Land Registrar on Form 3B for first registration of his sub-lease, stating specifically that the lessor's title was registered under title number IN 72776. The form provides for a statement that the land certificate of the lessor's title either accompanies the application or has already been deposited in the registry. This was altered to state that it had already been or was about to be deposited in the registry on the sale of the land comprised in title LN 72776 by Crittails. On 24th April, 1962, the plaintiffs lodged an application for registration on that title of the transfer to them, accompanied by the land certificate: they knew nothing of Mr Caswell's application: they had full knowledge of the sublease but were under the impression, erroneous in law, that it had been determined under a special clause in the sub-lease. (The decision on the construction of the statute cannot, of course, be affected by the fact that the plaintiffs knew all about the sub-lease). The Land Registry took the view that Mr Caswell's application was imperfect as at 5th April because it was not then accompanied by the land certificate of the superior title, and in so doing pursued the official view which had long been taken - which was indeed reflected in the standard Form 3B. One question in this case is whether that official view is justified. If it was not justified, the application should have been entered as at 5th April, 1962, in the book kept for that purpose, and the registration of the new title comprising the sub-lease would in the normal course have been completed as of 5th April: see Rule 83. Rule 83(1) provides that where applications are delivered at the Registry "accompanied, where necessary, by the land certificate" they shall be entered in a book in the order in which they are delivered. The rules have statutory force as if enacted in the Act. Section 64 deals with the production of land certificates for the purpose, at least primarily, of enabling the land certificate to be kept up to date by noting on it the latest entries in the register. I have no doubt, on considering the language of that section, that sub-section (l)(a) on its true construction is referring only to the occasion of entries to be made on the actual title to which the land certificate to be produced relates, here title LET 72776, and does not refer to an application to register a new title. It is, of course, true that under Section 22(2) Mr Caswell's application would in the ordinary course necessarily result in or be. accompanied by a noting of his sub-lease on title LET 72776: but in so far as his application is for that reason to be regarded as also an application for such noting, Section 64(1)(c) expressly excepts it from the requirement for production of the land certificate, his interest being a lease at a rent without fine.
The Registrar was therefore in my judgment in error in not accepting the application as complete on 5th April, 1962.
This conclusion, however, does no more than avoid the particular problems that would arise had the question depended on the arrival with the plaintiffs' application on 24th April of the land certificate: and to this problem I will recur, in case my opinion that the 5th April was the proper date of Mr Caswell's application should be wrong. It is still the contention of the plaintiffs that nonetheless (a) Section 23 conferred on them the superior title free of the sub-lease with effect from 24th April, since by that date no note of the sub-lease had been entered on title IN 72776: and (b) it is not established that, even if Mr Caswell's application had been received by the Registry as of 5th April, 1962, the notice of the sub-lease would in fact have been entered on title LN 72776 earlier than 25th April. The first of these contentions remains on the surface apparently sound: the second, having regard to the volume of work at the Registry and the mechanical problems of physical entry or noting up, I am prepared to accept.
But the real question remains in this form. Is it true to say that when, consequent upon the registration under a new title of the sub-lease, the sub-lease is to be noted against the title of the head lease, that nothing is to be considered as having effect on the date of the application to register the sub-lease under a new title?
For the plaintiffs it is contended that this cannot be so, and that it would stultify the whole system of registered title to land if it were so. The argument is that a purchaser of registered land searches (either personally or through an official search) the register of the title he is acquiring, and must be able to rely on that search, and (apart from matters such as overriding interests) must surely be entitled to rely upon a title free from all that does not actually appear on that title before completing. (To assist comprehension of the present case it should perhaps be pointed out that the plaintiffs, in completing the transfer and paying the purchase price, did not in fact rely upon a last moment search followed at once by application for registration: and they failed to take advantage of the 14 day standstill period provided by the 1930 Rules). But this argument breaks down, in my view, when it is appreciated that a would-be purchaser of registered land, about to commit himself, has available to him also on search the details of pending applications, such as Mr Caswell's, to enter an estate in land on the register: see Rule 10. To condescend to the present case: suppose either before or just after a contract by Crittall to sell the superior interest to the plaintiffs, they searched: and suppose before the search Mr Caswell had made his application: the search would or should have revealed a pending application in respect of the same land to register the sublease: accordingly, under the system the plaintiffs would not have been at risk of taking a transfer and paying their money without opportunity to know of the sub-lease. This major criticism of the validity of the defendant's contentions, therefore, breaks down. Nor am I in any way persuaded by the argument that the form of official search application under the 1930 rules does not seem to afford room for reference to the register or list of pending applications: it seems unreal to suggest that a request for, and a result of, an official search should lead to an omission of a relevant fact which is open to public inspection.
It was further argued for the plaintiffs that a person in Mr Caswell's position is not in any way prejudiced by the view that actual entry of notice of his sub-lease on title LN 72776 is required to save him, because he can always, simultaneously with his application for registration as proprietor of the sub-lease, lodge a caution on title LN 72776 which will prevent registration of the plaintiffs as transferees without reference to him and will in due course lead to a hearing before the Registrar. I am not quite sure what it is said should be the outcome of that hearing: should the Registrar postpone the undoubted right of the transferee of the superior title to registration of his transfer until the sub-lease is actually noted against the superior title? And what of the fact that the transferee's title when registered must be so as of the date of his application regardless of the caution?
The arguments for Mr Caswell appeal far more to me. On this side it is said that the whole scheme of the Act really depends upon providing for the inevitable mechanical delays of carrying out actual entries by relation back to the dates of applications, for which purpose the entry book is vital. It is additionally said that the caution system, leading as it does to a "hearing, is a heavy gun to be employed in what on a fair construction of the Act can be a simple situation.
In particular, attention was drawn to Section 48 and Rule 85. Section 48 enables a lessee (here the sub-lessee) of registered land to apply to the Registrar to register notice of the sub-lease (unless it be an overriding interest) against the registered title, and "when so registered" the sub-lease affects with notice thereof as an emcumbrance the proprietor of the registered lands the section requires for the registration the concurrence of the proprietor or an order of the Court, except where the lease is "binding on the proprietor of the land", an exception which I need not attempt to elucidate. Rule 83 includes provisions governing delivery of such an application, and provides that it shall be entered in the entry book in due order, and that "registration shall then be completed as of the day on which.....the applications were delivered"; completion of registration in this connection means the entry of notice of sublease in the registered title of the superior interest. Thus when all that is done is to apply under Section 48, it is clear that the entry pursuant to the application has effect when made from the application date.
Here no such application was made. The application was for a first registration of the sub-leasehold granted out of the registered leasehold title. Section 22(2) provides for such a disposition to be completed by registration "and notice thereof (i.e. of the sub-leasehold interest) shall also be noted on the register". This last phrase refers, of course, to entry of notice on the superior registered title - here LN 72776. The actual registration of the sub-leasehold as a new title has effect, of course, from the date of application therefor.
With this section marches Rule 46. This provides by sub-rule (l) that "where a lease" (here sub-lease) "affecting land already registered, is registered in pursuance of these rules, notice of the registration thereof shall be given to the proprietor.....of the superior leasehold....": and by sub-rule (2) that if there be no valid objection within seven days, or if the proprietor consents in writing to "the application", the sublease shall be noted against the title to the superior leasehold "in the same manner as notices of leases have to be entered under Section 48 of the Act and these rules". In my judgment that last quotation points exactly to that which would be expected, namely, that just as the Registrar must complete the registration pursuant to a Section 48 application as of the day on which the application was delivered, so must he enter the notice as of the day on which the application for registration of the new title was delivered, of which application this noting is the inevitable and compulsory outcome.
In the course of discussion it was suggested that the sequence of events under Section 22(2) and Rule 46 was, firstly, registration of the new sub-leasehold title, and, secondly, notice to the superior proprietor of that fact having been done, and, thirdly, either entry of the notice on the superior title or (if valid objection by the superior proprietor be established) • deletion of the new title. This would certainly be undesirable, and I do not think it is correct. "Where a lease....is registered" does not refer to a past event but to a process which has been set on foot. Rule 33 is another example of such drafting: it envisages the possibility of advertisement in connection with a first registration "where the original lessee is registered as first proprietor": but advertisement must, of course, precede registration. Nor (in Rule 46) is "notice of the registration thereof" to be read as referring to a completed event: it is to be observed that the superior proprietor's consent, if given, is "to the application" and not to the registration which the application has asked for.
It was argued that there was good ground for suggesting that entry of a notice pursuant to an application under Section 48 should be back-dated to the application date, but not entry of a notice pursuant to Section 22(2). Under Section 48, it was said, there must be before the application is made consent by the superior proprietor or an order of the Court: see also Rule 183: whereas the validity of the claim to be registered with the sub-leasehold title and to have the sub-lease noted under Section 22(2) remains to be determined after the application. I observe the difference, but I cannot accept its relevance to the question whether the material date is the date of application.
Accordingly in my judgment:
(1) the application of Mr Caswell was a valid application on 5th April, 1962, and the Registrar was in error in rejecting it as defective for lack of an accompanying land certificate,
(2) the registration of the new sub-leasehold title should have proceeded in due course and have been completed as of 5th April, 1962,
(3) the entry of the sub-leasehold interest on title LN 72776 should have also proceeded in due course and have been completed as of 5th April, 1962,
(4) the Register should be rectified by registering Mr Caswell in a new title in respect of his sub-lease, and by noting his interest on title LN 72776, both as of 5th April, 1962. In this connection it may be material to recall that the plaintiffs were fully aware of the sub-lease and its recognition by Crittall, and rested their claim on the technicalities of the statute and on the failure by Mr Caswell during the years to have complied with them. It is, however, fair to record that we were informed that failure to obtain possession of this property will hold up a considerable development scheme of the plaintiffs or their group, and that Mr Caswell has been offered market price (ignoring any special value due to the development scheme) plus ten per cent. This comment is, of course, in no way a criticism of Mr Caswell: it is only made to avoid the impression that the plaintiffs were seeking to expropriate what at the lowest were moral rights for no payment at all.
The further question was discussed, on the assumption that in law the land certificate was required to reach the registry to perfect Mr Caswell's application, what was the effect of the fact that it reached it as part of the plaintiffs' application to register the transfer to them of the superior leasehold interest on 24th April? I entirely agree with the learned Judge's view that there was nothing in the form of the plaintiffs' application or of the accompanying letter to prevent the receipt at the registry of the land certificate from perfecting Mr Caswell's application of 5th April. What then is the effect of simultaneous applications (a) to register the transfer of the leasehold, and (b) to register the sub-leasehold, on the footing that everything done pursuant to those applications will be as of the same moment? In my view the answer should be that the sub-leasehold interest takes effect. With the provisions of Section 23 in mind, it cannot be said that registration of the plaintiffs' title is completed at any moment of time when notice of the sub-lease is absent from title LN 72776. And if resort to general principle is required to solve the otherwise insoluble, I prefer a result which accords with the principles that between equities the first in time prevails, and that it is for the person who seeks to ignore an equitable interest to establish his right to do so.
THE MASTER OF THE ROLLS: Mr Lazarus, the result of this long and complicated discussion is that you succeed on the first ground, namely, the registration as of the 5th April of your sub-lease.
MR LAZARUS: I am obliged to your Lordship. Your Lordship's order should, I suggest, be in the form which I am taking from my counterclaim.
THE MASTER OF THE ROLLS: I was looking at your notice of appeal really but it does not matter which. It is the first paragraph of your counterclaim.
MR LAZARUS: Yes, in the first alternative; it would read in this way, if I may read it: "A declaration that the first defendant is entitled to be registered as proprietor of the land comprised in the sub-lease. .and to have notice of such sub-lease entered on the register of Title No. LN 72776 in each case as of the 5th April 1962".
THE MASTER OF THE ROLLS: You missed out the alternative.
MR LAZARUS: Yes. Then the order can go as in paragraph 3 of this prayer,"an order for the rectification of title LN 72776 by entering thereon notice of the said sub-lease in accordance with such declaration as aforesaid".
THE MASTER OF THE ROLLS: That would be right. We could do it simply like that. Taking your counterclaim, the first prayer down to the 5th April, 1962, and then go to your prayer 3, an order for rectification under (l).
MR LAZARUS: The declaration aforesaid.
THE MASTER OF THE ROLLS: Yes, that is all that needs to be done. You now ask for a declaration as you state, and that is right, I think. You ask for costs?
MR LAZARUS: Yes.
THE MASTER OF THE ROLLS: What do you say, Mr Albery?
MR ALBERY: I have no comment on the formal order but I should like to make a submission as to costs. I apprehend that there might be a slight technical difficulty owing to the absence of Lord Justice Harman but my learned friend and I are quite content that your Lordship and Lord Justice Russell should deal with this matter.
THE MASTER OF THE ROLLS: Unless we cannot agree.
MR ALBERY: As to the costs, there were two separate issues in this case, the issue of construction and the issue as to the overriding interest. On one I have lost which involves losing the final appeal. On the other I have won in both Courts, and it was to that that practically the whole of the evidence was directed below and it was a completely separate issue.
THE MASTER OF THE ROLLS: You wanted possession: that is what you came for. You wanted to turn Mr Caswell out or Mrs Reinold out.
MR ALBERY: Yes. I do not shrink from the fact that whatever order your Lordship makes as to costs must be more unfavourable to me than to my friend. But if he takes a bad point which he has not succeeded on and that increases the costs below and here, but less greatly before your Lordship's Court, in my submission my clients should not have to pay the costs on the point on which he has not succeeded.
LORD JUSTICE RUSSELL: It was not unreasonable to take that point. I should have thought it could be said that he conducted his defence perfectly reasonably. I found the point very difficult.
MR ALBERY: I did not suggest, my Lord, that this was something wholly unreasonable, but I would submit where there is a completely separate issue, it is only justice to the other side, or your Lordships may think it would in this case only be justice.' Without criticising the conduct of the case by the respondent, nevertheless it would be a hardship on my client to have to pay the costs on this separate issue on which he won. I would submit that justice would be done, particularly in accordance with the new costs rules, that your Lordship should make an order that I should not pay the whole of the costs in both Courts. Your Lordship may think two thirds of the costs in both Courts. That would reflect that a good deal of time was spent on that issue on which I won.
THE MASTER OF THE ROLLS: Do you wish to say anything about this, Mr Lazarus?
MR LAZARUS: My submission is this. There were two issues in the sense that there were two points of law to be argued but there was really only one issue in the action, possession or not possession, and a litigant should not have reflected in the order for costs when he has won, the fact that one of his arguments has not succeeded. We were entitled incur submission to defend with all the arguments available to us. That we have done and we have won.
THE MASTER OF THE ROLLS: The appeal will be allowed, the order made in the form I have said, with costs here and below.
MR ALBERY: Would your Lordship grant my clients leave to appeal to the House of Lords? This is a matter in which your Lordships are differing from the decision of the learned Judge below. This is a matter of great importance on the statute and it is in my submission one which would be appropriate to be heard further by their Lordships' House.
LORD JUSTICE RUSSELL: What worries me is that here is Mr Caswell. True, if you like, he has been lazy in the past in not originally registering the sub-lease which was granted to him by his wife, but I do not much like the idea of an individual being, so to speak, run up to the House of Lords in this case.
MR ALBERY: I see that, my Lord.
LORD JUSTICE RUSSELL: That is on a broad approach.
MR ALBERY: Possibly if my clients were to undertake not to seek to disturb any order your Lordship made as to costs hitherto, that might meet that point.
LORD JUSTICE RUSSELL: Are you offering that?
MR ALBERY: Yes, my Lord.
THE MASTER OF THE ROLLS: What do you say, Mr Lazarus?
MR LAZARUS: First of all, I would ask my Lord, Lord Justice Russell, to substitute the word "ill-advised" for the word "lazy".
THE MASTER OF THE ROLLS: Having looked at these Acts, it seems to me anyone might forget to do that.
LORD JUSTICE RUSSELL: Perhaps I should have said he was not advised by competent people!.
MR LAZARUS: I invited that riposte, my Lord!
This is a case where the parties do not stand on equal terms financially and the case going to the House of Lords would, of course, impose an unusually heavy burden on ray clients. Your Lordships have decided the case unanimously and I would submit it should be left there.
LORD JUSTICE RUSSELL: So far as the financial burden is concerned, an undertaking has been given not to disturb the present order as to costs, or an offer to do that, so he would be at risk (a) of being rightfully turned out if he was wrong in law, and (b) having to pay one set of costs.
MR LAZARUS: I see that and that does help the position. I would suggest it should be imposed as a condition if leave is granted. But basically I would suggest to your Lordship that the decision of the Court has been unanimous, it has decided a point of construction with certainty and authority, if I may say so, and this is not a case which needs to go further.
THE MASTER OF THE ROLLS: We do not give leave to appeal to the House of Lords.
