Strand Securities Ltd v Caswell

An application for first registration of a lease derived from registered land is complete without the superior proprietor’s land certificate. The Registrar cannot insist on production of a document which the applicant has no right to obtain.

Registration of the new leasehold title, and the corresponding notice on the superior title, take effect from the date when the application was delivered. A later registered transfer therefore remains subject to the earlier lease.

For the purposes of section 70(1)(g) of the Land Registration Act 1925, occupation by a gratuitous licensee on that licensee’s own behalf is not actual occupation by the licensor. Occupation by a representative, such as a caretaker acting for the rights-holder, may have that effect.

A registered head leaseholder granted her husband a sub-lease exceeding 21 years. He did not apply to register it until the head lease was being transferred to the plaintiffs. The Land Registry received his application first but treated it as incomplete because it lacked the superior title’s land certificate. The plaintiffs subsequently lodged that certificate with their transfer application and were registered without notice of the sub-lease.

Cross J decided in the plaintiffs’ favour: [1964] 3 WLR 623. The defendants appealed. The principal issues were whether the sub-lessee’s application had been complete when delivered, whether registration and notice related back to that date, and whether he alternatively held an overriding interest through the occupation of his stepdaughter, who lived in the flat rent-free.

1. Appeal allowed unanimously. Lord Denning MR, Harman LJ and Russell LJ agreed that the Registrar had wrongly refused to treat the sub-lessee’s application as complete on 5 April 1962. On the proper construction of section 64 of the Land Registration Act 1925, an application for first registration of a new leasehold title did not require production of the superior proprietor’s land certificate. Section 64(1)(a) concerned entries on the title to which the certificate related, while section 64(1)(c) expressly excepted the relevant notice of a lease.

2. The application should have been entered immediately in the publicly inspectable book of pending applications. A purchaser searching the superior title could thereby discover the pending application and appreciate that any resulting registration would relate back to its delivery date. Administrative delay in making the physical entries could not determine priority.

3. Per Lord Denning MR and Russell LJ, sections 22(2) and 48, read with rules 46 and 83, required both registration of the new sub-leasehold title and notice on the superior title to take effect from the application date. The notice was the compulsory consequence of first registration and was to be entered in the same manner as a notice under section 48. The sub-lease therefore obtained priority over the plaintiffs’ transfer, whose application was not delivered until 24 April 1962.

4. The court rejected the alternative reliance on section 70(1)(g). The stepdaughter was in actual occupation, but she occupied the flat on her own behalf as a gratuitous licensee. Her occupation was not attributable to the sub-lessee merely because he owned furniture, retained access and occasionally used the flat. Occupation by a caretaker or other representative acting on his behalf could have been attributed to him. Receipt of even a token rent would also have brought him within the statutory protection for a person receiving rents and profits.

5. The court declared that the sub-lessee was entitled to registration of his sub-leasehold title and to notice of it on the superior title, in each case as of 5 April 1962. Rectification was ordered accordingly, with costs in both courts. Leave to appeal to the House of Lords was refused.

1. Court of Appeal: The defendants’ appeal was allowed unanimously. The court declared that the sub-lessee was entitled to registration and notice as of 5 April 1962, and ordered rectification.

2. High Court: Cross J decided the registration and possession dispute in the plaintiffs’ favour: [1964] 3 WLR 623.