Lizzium Ltd v The Crown Estate Commissioners

Under section 181 of the Law of Property Act 1925, the court may vest land in a person who would have been entitled to it had the estate remained subsisting. The jurisdiction is discretionary, even where the statutory conditions are met. The expression refers to a legal entitlement subsisting at the date of escheat, although further steps may be required to make that entitlement enforceable. It does not extend to a person who merely might, or probably would, have received a voluntary transfer from the former owner after escheat.

Clairvale Limited, a Gibraltar company, owned freehold land in England. It was dissolved in Gibraltar, causing the freehold to escheat to the Crown. Clairvale was later restored to the Gibraltar register. The claimants sought a vesting order under section 181 of the Law of Property Act 1925, principally in favour of Lizzium Limited, on the basis that the property had been intended to transfer to Lizzium during an earlier restructuring but had been omitted by mistake. The central issue was whether Lizzium was a person who would have been entitled to the estate had it remained subsisting.

1. The court’s jurisdiction under section 181 of the Law of Property Act 1925 was engaged because Clairvale’s dissolution caused the freehold estate to determine. Exercise of the jurisdiction remained discretionary.

2. The discretion may be exercised in favour of a person other than the dissolved company. The statutory expression referring to the person who would have been entitled includes a person with a legal right subsisting at the date of escheat, even where further contractual or procedural steps remain necessary. UBS Global Asset Management (UK) Limited v Crown Estate Commissioners [2011] EWHC 3368 (Ch) and Quadracolour Limited v Crown Estate Commissioners [2013] EWHC 4842 (Ch) were understood on that basis.

3. Lizzium had no subsisting legal right against Clairvale at the date of dissolution. Evidence of an intention to transfer the property, or of a likely voluntary transfer after dissolution, was insufficient. The court therefore refused to vest the property in Lizzium.

4. The restoration of Clairvale and the absence of opposition from the Crown supported vesting the property in Clairvale. Sections 332(15) of the Companies Act 1930 and 415(7) of the Companies Act 2014 in Gibraltar did not themselves revest English land. Section 1032 of the Companies Act 2006 was capable of applying to English land but not to a foreign company.

First-instance decision. No appellate history was stated in the judgment.