Rother District Investments Ltd. v Corke & Ors

A purchaser of a leasehold reversion may be unable to rely on the purchaser’s failure to register title to argue that a prior peaceable re-entry and forfeiture was ineffective. The court may presume that the registered proprietor authorised the purchaser’s acts. The purchaser may also be precluded from taking advantage of its own wrong, or estopped from denying the validity of the forfeiture. Registration may retrospectively validate the forfeiture between the parties, but it does not retrospectively advance the date on which legal title was acquired for the purposes of Law of Property Act 1925, section 141.

Rother purchased the reversion to a head lease but was not registered as proprietor until 31 December 2001. Before registration, it purported to re-enter and forfeit a sublease for rent arrears and later granted a new sublease. The defendants claimed that the sublease continued until registration, so that the right to accrued rent remained with the former proprietor.

The Brighton County Court determined the preliminary issue against Rother. On appeal, the High Court considered whether the pre-registration acts ended the sublease or could be treated as effective between the parties, and whether section 141 of the Law of Property Act 1925 transferred the accrued rent claim to Rother.

1. Appeal dismissed. Rother was not entitled to recover the sums claimed as rent or other sums due under the sublease for the relevant period.
2. The court was entitled to presume that Tambarella, the registered proprietor of the reversion, had authorised Rother to exercise the power of peaceable re-entry and forfeiture. The presumption of regularity may operate between private persons, and entry should be construed as rightful where that construction is available.
3. Rother could not rely on its absence of registered title, after acting on the basis that it possessed the necessary title and authority, to obtain the benefit of its own alleged wrong. The principle preventing a party from taking advantage of its own wrong could operate as a substantive rule of law or as a principle of construction, as explained in Kensland Realty Ltd v Whale View Investment Ltd.
4. Rother was also estopped from denying that the sublease had been forfeited. Although the defendants were initially unaware of the acts, once they learned of them they could elect to accept the forfeiture or seek possession. Their election to accept the forfeiture entitled them to treat the sublease as forfeited from the date of peaceable re-entry.
5. Registration retrospectively validated the forfeiture as between Rother and the defendants. It did not, however, ante-date Rother’s acquisition of legal title for section 141. Rother acquired title only on 31 December 2001, but by then the sublease was treated as forfeited for the purposes of the parties’ rights.

• High Court (Chancery Division): appeal from the Brighton County Court dismissed.