Kling v Keston Properties Ltd

Kling v Keston Properties Ltd (1985) 49 P & CR 212

Rights of pre-emption and actual occupation.

Facts:

The plaintiff, Kling, occupied a garage in Chelsea owned by the defendants under a licence. He obtained from them a right of first refusal to purchase the lease of the garage. However, the defendants subsequently sold a 99-year lease of the garage to Mrs Aschon. At the time of this grant, the plaintiff’s car was in the garage and was blocked in by Mrs Aschon’s car. The plaintiff’s sought specific performance of the option to buy the lease.

Issues:

The plaintiff claimed an overriding interest under s.70(1)(g) Land Registration Act 1925 as they had an interest and were in actual occupation. The defendants argued that the plaintiff was not in fact in actual occupation of the garage as only his car was parked there. Finally, it was argued that s.59 of the 1925 Act prevented the interest becoming overriding. This provision stated that any interests which were required to be registered under the old Land Charges Act 1972 had to be registered on the register of title to bind a purchaser.

Held:

The plaintiff was entitled to specific performance and was given an underlease of the garage on the same terms as the lease held by Mrs Aschon. The option created an equitable interest in the garage. The plaintiff was still in actual occupation as long as there was some physical evidence of his residence coupled with an intention to return to the property. The presence of his car in the garage was enough. The court rejected the idea that s.59 precluded s.70(1)(g) of the 1925 Act. Accordingly, the plaintiff had an overriding interest which bound Mrs Aschon.