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Raggatt v McCleery- H01CL299

On 12 October 2022, HHJ Johns K.C., sitting in the County Court at Central London, handed down his reserved oral judgment in Raggatt v McCleery (claim number H01CL299) by MS Teams, having heard the Part 8 claim on 6 September 2022. The Judge described the case as involving “one of the dustier borders of the law of property”.

The Claimants have been the registered leasehold proprietors of a flat since 17 June 2014. The Defendants are the current freehold owners of the building in which the flat is situated.

By a lease dated 29 September 1976, the flat was demised for a term of 99 years from 29 September 1975.

By a further lease dated 31 July 1998, the Defendants’ predecessor in title purported to grant a further term to the Claimants’ predecessor in title for a term of 50 years from 29 September 2074.

Both leases were registered by HM Land Registry.

It was common ground that the 1998 lease was void by virtue of s.149(3) of the Law of Property Act 1925, since the term it purported to create would take effect in possession more than 21 years from the date of the grant.

The Claimants argued that s.58(1) of the Land Registration Act 2002 had the effect (by virtue of what has been called the “statutory magic”) of vesting the registered leasehold estate in the Claimants notwithstanding that the leasehold term purportedly granted by the 1998 lease was void absent such registration.

The Defendants argued that the registered estate could not exist as a legal estate at all because it was not a “term of years absolute” falling within the definition in ss. 1 and 205 of the Law of Property Act 1925 (which definition of “legal estate” is applicable to the Land Registration Act 2002 by virtue of s.132(1) of that Act). It was said that registration could no more vest the future 50-year term in the Claimants as a legal estate than it could vest a registered pack of sausages in them as a legal estate.

HHJ Johns K.C. accepted the Claimants’ argument, concluding that it was registration rather than the quality of the prior disposition which creates and constitutes the registered proprietor’s title to the registered estate. This gave effect to the principle that the register should be conclusive and was consistent with cases concerning registered charges or other interests which would otherwise have been void taking effect at law by virtue of registration.

The Defendants’ argument was rejected on the basis that s.149(3) makes void a term limited to take effect more than 21 years after the instrument purporting to create it, but while the 1998 lease was an instrument for these purposes, so that it created no valid term at common law, s.58 of the 2002 Act was not, by virtue of s.205(1)(viii) of the Law of Property Act 1925. It was the statutory magic under s.58(1) that purported to vest the registered estate in the Claimants. Thus, s.149(3) did not require the registered estate to take effect in possession within 21 years of the registration because there was no instrument purporting to create the registered estate. The registered leasehold estate was capable of existing as a legal estate, being a term of years taking effect in reversion which was not required by s.149(3) to take effect within 21 years of its creation.

Declarations were made that (subject to any application the Defendants may wish to make under Schedule 4 of the Land Registration Act 2002):

The Claimants have a leasehold estate in the flat, which will take effect in possession from 29 September 2074 and will expire on 29 September 2124;

The Claimants’ leasehold interest in the flat will not determine only by virtue of the determination of the contractual term of the 1976 lease by effluxion of time on 29 September 2074; and

The Defendants will not be entitled to possession of the flat by virtue only of the expiration of the contractual term of the 1976 lease by effluxion of time on 29 September 2074.

Toby Boncey acted for the successful Claimants, instructed by Loxley. Daniel Bromilow appeared for the Defendants.

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