Strand Securities Ltd v Caswell [1965] Ch 958; [1965] 2 WLR 958; [1965] 1 All ER 820
Court of Appeal — 2 February 1965
Facts
Mrs Caswell held a registered lease of a London house. In 1952 she granted her husband, Eric Caswell, a sublease of one flat for just over 39 years. He did not initially register it. The headlease subsequently passed to Crittall Manufacturing, which recognised his sublease and accepted rent from him.
From September 1961, Mr Caswell allowed his stepdaughter, Mrs Reinold, and her children to live in the flat rent free after her husband left her. Mr Caswell and his wife lived in the country. Some of his furniture remained in the flat, and family members occasionally used it as a meeting place or to change clothes before going out.
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In March 1962, Crittall transferred the headlease to Strand Securities. The company knew about Mr Caswell’s sublease. On 5 April, he applied to register it, but the Land Registry treated the application as incomplete because he had not supplied the headlease’s land certificate.
Strand Securities lodged its own application, with that certificate, on 24 April. The Registry eventually registered the company’s title with effect from that date, without noting Mr Caswell’s sublease. The company then claimed that it took free of the sublease under section 23 of the Land Registration Act 1925 and sought possession.
Issues
There were two distinct questions. First, should Mr Caswell’s registration application have taken effect from 5 April, giving his sublease priority? Secondly, did he have an overriding interest under section 70(1)(g) through actual occupation of the flat, including occupation through his stepdaughter?
Decision
The Court of Appeal unanimously allowed the appeal. The register was to be rectified so that Mr Caswell was registered as proprietor of the sublease, and notice of it entered against the headlease, with effect from 5 April 1962. Strand Securities therefore took subject to it. His alternative argument based on actual occupation failed.
Why registration protected the sublease
The Registrar had wrongly required production of the superior owner’s land certificate. On the proper interpretation of section 64, it was unnecessary for the first registration of this sublease. A lessee would not ordinarily be entitled to demand the lessor’s title documents.
Mr Caswell’s application was therefore complete when delivered on 5 April. Registration of the new title and the corresponding notice against the superior title should both have taken effect from that date. Administrative delay in entering the details did not give the later application priority.
The judges rejected the suggestion that this would leave purchasers unable to discover competing applications. Pending applications were available for inspection. Strand Securities had also failed to apply within the protected period following its earlier official search.
Why actual occupation did not protect Mr Caswell
Mrs Reinold was in actual occupation. Her occupation was nevertheless on her own behalf, under a rent-free licence, rather than on behalf of Mr Caswell. Lord Denning distinguished her position from that of a servant or caretaker occupying as his representative. Russell LJ likewise rejected the argument that every licensee’s presence necessarily amounted to occupation by the person who permitted it.
Mr Caswell’s furniture, occasional use of the flat and even the assumed possession of a key did not together establish his actual occupation. Nor was he receiving rent from his stepdaughter. His lease therefore lacked protection under section 70(1)(g) on these facts.
Lord Denning described Mrs Reinold’s own permission to remain as a licence which could be ended, allowing a reasonable time to leave. Her physical occupation did not itself give her an indefinite right to stay or turn her into Mr Caswell’s representative.
The distinction is between occupying land and the rights that occupation protects. The court did not deny that Mrs Reinold lived there. It rejected Mr Caswell’s attempt to rely on her occupation, while upholding his sublease through the separate rules governing registration.
