Zeckler & Anor v Kylun Ltd & Ors

A unilateral notice should be cancelled where the claim supporting it is unsustainable. A claim for money alone is not a pending land action and cannot justify protection by unilateral notice. Where the alleged contractual entitlement belongs to a company, its shareholder cannot claim personally merely because he owns the shares. An introduction fee conditional upon completion of a specified sale agreement is not payable where that agreement was varied, terminated or never completed, unless the fee agreement was also extended. Claims lacking any arguable legal basis may be struck out under the Civil Procedure Rules, including where proceedings attempt to circumvent the striking out of substantially identical earlier proceedings.

The claimants sought, among other relief, an introduction fee of £500,000 from the trustees of a pension plan owning the Vauxhall Cross Island site. They also sought a legal charge over the site and variation of an option registered against the title. The trustees applied under paragraph 2 of Schedule 4 to the Land Registration Act 2002 to cancel a unilateral notice and under CPR 3.4(2)(a) to strike out the claims against them.

The fee agreement had been made with Tempest Limited, the first claimant’s company, and related to a 2009 conditional sale agreement which was not completed. Substantially the same fee claim by Tempest had previously been struck out after security for costs was not provided. The central issues were whether the unilateral notice protected a proprietary interest and whether the claims against the trustees were legally sustainable.

1. Unilateral notice. The first application succeeded and the unilateral notice was cancelled. Applying the approach in Nugent v Nugent [2014] 3 WLR 59, the court distinguished between an unsustainable claim, where cancellation is justified, and a well-arguable claim, where the balance of interests is assessed as for an interim injunction.
2. The claim supporting the notice was a money claim for an introduction fee. It was not a proprietary claim and therefore was not a pending land action within section 17(1) of the Land Charges Act 1972 or section 87(1) of the Land Registration Act 2002. The conclusion was also supported by Albany Construction Company Ltd v Cunningham [2004] EWHC 3392 (Ch) and Haslemere Estates Ltd v Baker [1982] 1 WLR 1109.
3. Any contractual claim belonged to Tempest, not Mr Zeckler personally. Ownership of all the shares did not justify piercing the corporate veil, and no legal basis or authority for doing so was advanced.
4. The fee was conditional upon completion of the specified 2009 sale agreement. That agreement was not completed, the later 2010 agreement was unconditional but terminated when completion did not occur by 1 March 2011, and no variation of the fee agreement was alleged or established. The fee claim was therefore wholly unarguable. An alleged implied term not to frustrate the fee conditions did not assist because the trustees had not frustrated completion.
5. Strike out. The trustees’ application under CPR 3.4(2)(a) succeeded. The claims for a charge had no pleaded legal basis, and Mr Zeckler’s fee claim was also an abuse of process because it substantially replicated Tempest’s claim, which had been struck out.