[HOUSE OF LORDS]

AND

Land Charge - Charges registrable - Equitable easement - Assignment of leasehold - Right to re-enter on breach of covenant in - Whether registrable - Land Charges Act 1925 (15 & 16 Geo. 5, c. 22), s. 10 (1), Class D (iii)

Land Charge - Charges registrable - Estate contract - Assignment of leasehold - Right to re-enter on breach of covenant and "to hold as if assignment had not been made" - Whether "any other like right" - Whether registrable - Land Charges Act 1925, s. 10 (1), Class C (iv)

Landlord and Tenant - Forfeiture of leasehold - Re-entry - Right to re-enter on breach of covenant - No one any longer directly liable for breach of covenant - Covenant not complied with - Whether right to re-entry enforceable

Landlord and Tenant - Forfeiture of leasehold - Relief from forfeiture - Assignment of leasehold - Breach of covenant to repair and support - Whether capable of remedy

By section 10 (1) of the Land Charges Act 1925:

"The following classes of charges on, or obligations affecting, land may be registered as land charges in the register of land charges, namely:- ... Class C:- A mortgage charge or obligation affecting land of any of the following kinds, created either before or after the commencement of this Act, but if created before such commencement only if acquired under a conveyance made after such commencement, namely:- ... (iv) Any contract by an estate owner or by a person entitled at the date of the contract to have a legal estate conveyed to him to convey or create a legal estate, including a contract conferring either expressly or by statutory implication a valid option of purchase, a right

of pre-emption or any other like right (in this Act referred to as 'an estate contract'). Class D:- A charge or obligation affecting land of any of the following kinds, namely:- ... (iii) Any easement right or privilege over or affecting land created or arising after the commencement of this Act, and being merely an equitable interest (in this Act referred to as an 'equitable easement'). ..."

In 1961 the plaintiffs assigned their leasehold interest in mill premises to T Ltd. By the assignment, T Ltd. covenanted on their own behalf and that of their successors in title to observe and perform certain stipulations as to fencing and support of buildings retained by the plaintiffs. On failure to observe or perform any covenant the plaintiffs had a right to re-enter and to retake the premises. That right was not registered as a land charge. In 1965 T Ltd. sold their interest in the premises to the defendant and were thereby exonerated, under the terms of the 1961 assignment, from all further liability under the stipulations. In 1969 the plaintiffs, relying on their right to re-enter, sued the defendant for possession of the premises alleging a failure to perform and observe the stipulations. Burgess V.-C., giving judgment for the plaintiffs in the Lancaster County Palatine Court, held that the right to reenter was not registrable as a land charge and was enforceable against the defendant, to whom no relief from forfeiture ought to be granted. The Court of Appeal having reversed his decision, the plaintiffs alp pealed to the House of Lords:-

Held, (1) that a right of entry could be validly reserved on an assignment of leasehold property when the assignor retained no reversion.

(2) That a right of entry could subsist in law in respect of non-compliance with covenants if those covenants, as such, were not enforceable.

(3) That as a matter of construction of the assignment the right of entry was exercisable in the circumstances of the case.

(4) That the right of entry, which was not registered under the Land Charges Act 1925, was exercisable against the defendant, since the right of entry was equitable and did not fall either within Class C (iv) or Class D (iii) under section 10 of the Act.

(5) That this was a case where a court of equity might grant relief against the exercise of a right of entry; though there was no general power in courts of equity to relieve against a man's bargains, those courts in appropriate and limited cases might relieve against forfeiture for breach of such a covenant where the primary object of the bargain was to secure a stated result which could be effectively attained when the matter came before the court and where the forfeiture provision was added by way of security for the production of that result.

Hill v. Barclay (1811) 18 Ves.Jun. 56 explained.

(6) That wilful breaches should only in exceptional circumstances be relieved against and the present case, where there were substantial breaches and a continuing disregard of the plaintiffs' rights over a period of time, was not one for relief.

Decision of the Court of Appeal [1972] Ch. 326; [1971] 3 W.L.R. 34; [1971] 2 All E.R. 307 reversed.

The following cases are referred to in their Lordships' opinions:

Bargent v. Thomson (1864) 4 Giff. 473.

Barrow v. Isaacs & Son [1891] 1 Q.B. 417, C.A.

Blunt v. Blunt [1943] A.C. 517; [1943] 2 All E.R. 76, H.L.(E.).

Bracebridge v. Buckley (1816) 2 Price 200.

Doe d. Freeman v. Bateman (1818) 2 B. & Ald. 168.

Herrington v. British Railways Board [1972] A.C. 877; [1972] 2 W.L.R. 537; [1972] 1 All E.R. 749, H.L.(E.).

Hill v. Barclay (1811) 18 Ves.Jun. 56.

Horsey Estate Ltd. v. Steiger [1899] 2 Q.B. 79, C.A.

Hughes v. Metropolitan Railway Co. (1876) 1 C.P.D. 120, C.A.; (1877) 2 App.Cas. 439, H.L.(E.).

Hyde v. Warden (1877) 3 Ex.D. 72, C.A.

Ives (E. R.) Investment Ltd. v. High [1967] 2 Q.B. 379; [1967] 2 W.L.R. 789; [1967] 1 All E.R. 504, C.A.

Kara v. Kara and Holman [1948] P. 287; [1948] 2 All E.R. 16, C.A.

Nash v. Earl of Derby (1705) 2 Vern. 537.

National Provincial Bank Ltd. v. Hastings Car Mart Ltd. [1965] A.C. 1175; [1965] 3 W.L.R. 1; [1965] 2 All E.R. 472, H.L.(E.).

Peachy v. Duke of Somerset (1721) 1 Stra. 447.

Reynolds v. Pitt (1812) 19 Ves.Jun. 134.

Sanders v. Pope (1806) 12 Ves.Jun. 282.

Stevens v. Copp (1868) L.R. 4 Exch. 20.

Wadman v. Calcraft (1804) 10 Ves.Jun. 67.

Webber v. Smith (1689) 2 Vern. 103.

The following additional cases were cited in argument:

Anon. (1552) 1 Dyer 74b.

Banning v. Wright [1972] 1 W.L.R. 972; [1972] 2 All E.R. 987, H.L.(E.).

Barton Thompson and Co. Ltd. v. Stapling Machines Co. [1966] Ch. 499; [1966] 2 W.L.R. 1429; [1966] 2 All E.R. 222.

Beesly v. Hallwood Estates Ltd. [1960] 1 W.L.R. 549; [1960] 2 All E.R. 314.

Belgravia Insurance Co. Ltd. v. Meah [1964] 1 Q.B. 436; [1963] 3 W.L.R. 1033; [1963] 3 All E.R. 828, C.A.

Birmingham and District Land Co. v. London and North Western Railway Co. (1888) 40 Ch.D. 268, C.A.

Cox v. Higford (1710) 2 Vern. 664.

Demetriades v. Glasgow Corporation [1951] 1 T.L.R. 396; [1951] 1 All E.R. 457, H.L.(Sc.).

Eastern Telegraph Co. Ltd. v. Dent [1899] 1 Q.B. 835, C.A.

Grimston v. Lord Bruce (1707) 1 Salk. 156.

Hickman v. Kent or Romney Marsh Sheepbreeders' Association (1920) 37 T.L.R. 163, C.A.

Lewin v. American and Colonial Distributors Ltd. [1945] Ch. 225; [1945] 2 All E.R. 271n., C.A.

Lewisham Borough Council v. Maloney [1948] 1 K.B. 50; [1947] 2 All E.R. 36, C.A.

Manchester Ship Canal Co. v. Manchester Racecourse Co. [1901] 2 Ch. 37, C.A.

Morgan v. Liverpool Corporation [1927] 2 K.B. 131, C.A.

Newbolt v. Bingham (1895) 72 L.T. 852, C.A.

North (Lord) v. Butts (1556) 2 Dyer 139b.

Popham v. Bamfield (1682) 1 Vern. 79; (1683) 1 Vern. 167; (1685) 1 Vern. 344.

Poster v. Slough Estates Ltd. [1969] 1 Ch. 495; [1968] 1 W.L.R. 1515; [1968] 3 All E.R. 257.

Ralph, Ex parte (1845) De Gex (Bankruptcy) 219.

Rolfe v. Harris (1811) 2 Price 206n.

Samuel Properties (Developments) Ltd. v. Hayek [1972] 1 W.L.R. 1296; [1972] 3 All E.R. 473, C.A.

Thomas v. Marconi's Wireless Telegraph Co. Ltd. [1965] 1 W.L.R. 850; [1965] 2 All E.R. 598, C.A.

Thomson v. Eastwood (1877) 2 App.Cas. 215, H.L.(I.).

Torrens v. Walker [1906] 2 Ch. 166.

United Dominions Trust (Commercial) Ltd. v. Eagle Aircraft Services Ltd. [1968] 1 W.L.R. 74; [1968] 1 All E.R. 104, C.A.

Westminster Bank Ltd. v. Lee [1956] Ch. 7; [1955] 3 W.L.R. 376; [1955] 2 All E.R. 883.

Woodcock v. Woodcock (1600) Cro.Eliz. 795.

Wright d. Plowden v. Cartwright (1757) 1 Burr. 282.

APPEAL from the Court of Appeal (Russell, Sachs and Buckley L.JJ.)

This was an appeal from a judgment and order of the Court of Appeal made on February 10, 1971, reversing a judgment and order of Burgess V.-C. made on February 9, 1970, in an action commenced by the appellant company, Shiloh Spinners Ltd., by writ of summons issued on January 15, 1969, in the Chancery of the County Palatine of Lancaster. The general nature of the questions raised was whether or not the appellants were entitled to possession of the leasehold land specified in the writ of summons by virtue of a right of entry reserved by the appellants in an assignment of that leasehold land to the predecessor in title of the respondent, Joseph James Harding, dated October 31, 1961, in the circumstances that none of the covenants therein mentioned was enforceable against the respondent or anyone else and there existed between the appellants and the respondent no privity of contract or estate.

The facts, stated by Lord Wilberforce, were as follows: The appellants were the assignees of two long leases of adjoining properties on which there stood, inter alia, a mill called Shiloh No. 2 Mill. On October 31, 1961, the appellants assigned their interest in a part of the properties, including Shiloh No. 2 Mill, to Thornber Brothers Ltd. retaining the rest. There were contained in the assignment to Thornber Brothers Ltd. a number of covenants, positive and negative, relating (inter alia) to (a) fencing of boundaries (b) keeping in repair a tower (the "lavatory tower") so as to provide support and protection to retained buildings (c) bricking up openings into a retained roadway (d) not diminishing support and protection given to the retained premises. There was reserved in the assignment a right to re-enter or retake the assigned property in the following terms:

"7. (a) If at any time during the lifetime of the last survivor of the descendants now living of His Late Majesty King George V and twenty one years after the death of such last survivor or during such further period (if any) as shall not infringe the law against perpetuities there shall be any failure to perform or observe any of the covenants herein contained implied or referred to on the part of the purchaser then and in every such case and notwithstanding the waiver of any previous default it shall be lawful for the vendor or the owner or owners for the time being of the premises comprised in the first

lease and the second lease not hereby assigned at any time or times during the periods aforesaid into and upon the premises hereby assigned or any part thereof in the name of the whole to re-enter and to hold the same for their own absolute use and benefit as if this deed had not been made but without prejudice to any right of action or remedy in respect of any antecedent breach of any of the covenants by the purchasers herein contained implied or referred to."

There was a proviso by which Thornber Brothers Ltd. were exonerated from liability under any of the stipulations after they had parted with their interest in the assigned premises.

On March 5, 1965, Thornber Brothers Ltd. for consideration assigned their interest to the respondent, a demolition contractor: he had actual knowledge of the terms of the 1961 assignment. He has demolished the greater part of the buildings on his premises and in doing so, and generally, has committed breaches of the covenants above referred to. The present action was brought by the appellants claiming possession of the premises comprised in the assignment of 1961: the respondent disputed the appellants' right of re-entry and alternatively sought relief against forfeiture. He failed before Burgess V.-C. but succeeded in the Court of Appeal.

John Vinelott Q.C. and Andrew Morritt for the appellant company. The following questions arise: (1) Can a right of re-entry validly be reserved on an outright assignment of leasehold property (the assignor retaining no interest in the reversion to the assigned property) or on an assurance of free holds (the grantor retaining no rent charge or other proprietary interest)? This point was not open to the respondent in the Court of Appeal and was not argued but was reserved for consideration in the House of Lords and is raised in the appellants' printed case.

(2) Is a right of re-entry for breach of a stipulation in an assignment of a lease a legal or an equitable right, and, if equitable, is it registrable under the Land Charges Act 1925? The appellants' primary contention is that the right is equitable but not registrable. If that is correct the right is clearly binding on the respondent because it is common ground that the respondent had actual notice of the stipulation.

(3) Did the right of re-entry remain exercisable only while the original assignees were lessees, either (a) because as a matter of the construction of the document it so provides or (b) because as a general principle a right of re-entry for breach of covenant can only be enforced against a person against whom the covenant would be directly enforced?

(4) Has the court jurisdiction in such a case to relieve against forfeiture by re-entry?

(5) If there is jurisdiction, should it be exercised?

On (1) the point arises whether a right of re-entry could be validly reserved on an assignment of a lease before 1925, and, if so, what effect the property legislation of 1925 had on it. There is clear authority that on an assurance of free holds a right of re-entry could be reserved. It was not a legal interest but a bare possibility and as such it had three characteristics: (a) it could not be assigned; (b) it could not be devised; (c) it could only

be reserved by the grantor himself. By section 3 of the Wills Act 1837 it was made capable of being devised. By section 6 of the Real Property Act 1845 it was made capable of being assigned. By section 4 of the Law of Property Act 1925 it was made capable of being reserved in favour of a person other than the grantor. The question whether a right of re-entry could be validly reserved on an assignment of leasehold property when the assignor retains no reversion was answered in the affirmative in Doe d. Freeman v. Bateman (1818) 2 B. & Ald. 168. That case has never been doubted and it was followed in Hyde v. Warden (1877) 3 Ex.D. 72, 82-83. See also Ex parte Ralph (1845) De Gex (Bankruptcy) 219. For precedents see Sweet's Precedents in Conveyancing, 2nd ed. (1845), pp. 170-171. Similar precedents with a right of re-entry are found in Key and Elphinstone's Precedents in Conveyancing and Prideaux's Precedents in Conveyancing, which it is not necessary to cite. No notes in any of the books cast any doubt on the principle and the House of Lords should not upset this state of the law.

In the respondent's printed case it is contended that a right of re-entry "in gross" for breach of a stipulation in an assignment of leaseholds or an assurance of free holds is contrary to public policy as inconsistent with the free marketability of land and should now be held to be void. This argument is misconceived, first, because there is no detriment to the public interest in a device which enables positive covenants in an outright assignment of leaseholds to be indirectly enforced against successors of the assignee and, secondly, because there are other well established convincing devices which enable the same substantive result to be achieved.

(2) In considering the effect on rights of re-entry of the Law of Property Act 1925 it is important to distinguish a bare possibility coupled with an interest, taking effect, not by way of a condition at common law, but by the Statute of Uses: Challis's Real Property, 3rd ed. (1911), pp. 76-77 and the footnote as to the word "possibility"; and see section 4 (2) of the Act of 1925. Another distinction well settled under the old law was that between an estate subject to a condition and a determinable estate, a vital distinction under the old system: see Challis, pp. 260-261.

Section 1 of the Law of Property Act 1925 must be read subject to section 7 (1) amended by the Schedule to the Law of Property (Amendment) Act 1926 and section 7 of that Act: see also section 1 (1) (ii) (c) of the Settled Land Act 1925. As to legal estates, see section 1 (1) (b) of the Law of Property Act 1925 with the definition of "term of years absolute" in section 205 (1) (xxvii) and section 1 (2) (a), (b) and (c).

The right of entry in this case is a right (but not an equitable interest) possessed by A in certain defined events to retake the land of another person, B. So the effect of its exercise is to change the beneficial ownership of the land. Such a right is referred to in the property legislation of 1925 and in section 1 (2) (e) of the Law of Property Act 1925 is specifically mentioned, while an "easement, right or privilege" is specifically mentioned in section 1 (2) (a); the right of entry is not comprehended in that category. In the case of free holds the only legal right of entry is one annexed to a rent charge. If the right of re-entry in the instant case is legal all questions of registration go. The words of section 1 (2) (e) should not be read as applying only to a right of entry contained in a lease. But it

makes no difference whether it is legal or equitable, provided it is not registrable.

If this right is equitable it is not registrable under the Land Charges Act 1925. The relevant sections in the Law of Property Act 1925 are section 1 (3) and (4), section 3 (1) (2) and (3), section 4 (1) and (2), and section 199 (1); and in the Land Charges Act 1925 the relevant sections are section 10 (1), Class C (iv) and section 13 (2). Class C (iv) is dealing with a contract in the ordinary sense to create a legal estate. As regards Russell L.J.'s question "If this is not a like right, what would be?" [1972] Ch. 326, 345, one answer is that an option given to A giving him a right to exchange land owned by him for land owned by B is like an option to purchase but is not an option to purchase. A conveyance on sale does not include an exchange: see Beesly v. Hallwood Estates Ltd. [1960] 1 W.L.R. 549, 555.

The House is here only concerned with the second limb of the sub-clause. All the rights mentioned in the second limb have three features in common marking them off as a genus: (a) The right is unilateral, possessed by one person. (b) The contract will be a true synallagmatic contract supported by consideration. (c) The contract, when it comes into existence, will be completed by conveyance or assignment. As to synallagmatic contracts, see United Dominions Trust (Commercial) Ltd. v. Eagle Aircraft Services Ltd. [1968] 1 W.L.R. 74, 82 (Diplock L.J.).

The rights of re-entry and of enforcement of a contract are different. Here there is no question of specific performance. If a right of re-entry arises it is enforceable by an action for possession or by a vesting order.

Class D (iii) in section 10 (1) of the Land Charges Act 1925 must be read with section 2 (3) (iii) of the Law of Property Act 1925. The words "equitable interest" must be used in the same sense in both. Easements are rights over the land of another of a non-proprietary kind in the sense that they do not override a right of property in the thing itself. There are many examples in the property legislation which show that the words "easement, right or privilege" are used in this sense: see sections 38 (i), 49 (1) (a), 51 (1), 52 (1), 55 (1), 57 (2), 61 (2) (c), 68 (1) (a), 72 (1), 73 (1) (xii) and 74 of the Settled Land Act 1925. The phrase is used consistently throughout the Act. So too in section 1 (2) (a) of the Law of Property Act 1925, relating to an "easement, right or privilege in or over land," which are contrasted with it and do not include a right of entry (section 1 (2) (e)). See also section 62 (1) as to general words implied in conveyances, which include privileges, easements and rights, and section 187 (1).

The authorities on Class D (iii) in section 10 (1) of the Land Charges Act are Lewisham Borough Council v. Maloney [1948] 1 K.B. 50; E. R. Ives Investment Ltd. v. High [1967] 2 Q.B. 379, 395-396, 399, 405-406, and Poster v. Slough Estates Ltd. [1969] 1 Ch. 495, 506-507. The last is a strong case in regard to the right to go onto the land of another: see also Megarry and Wade on the Law of Real Property, 3rd ed. (1966), pp. 722-723.

Much of the present appellants' submissions was accepted by the Court of Appeal but they felt constrained by the overreaching provisions in section 2 of the Law of Property Act 1925 to decide against them. But Parliament never intended any strict dichotomy between interests capable of being overreached and those capable of protection by registration. It is obvious

that there are cases omitted from both categories, e.g., quasi-proprietary rights arising from equitable estoppel, rights to set aside a conveyance and cases of constructive trust. None of these rights fits easily into either category and it is wrong in principle to construe the legislation with the preconception that they must be capable of being overreached or that some slot must be found for them in the registration provisions.

One very important practical consideration is that the Land Charges Act 1925 contains a complete code dealing with all registrable interests, and a practical solicitor must be able to find within the Act itself clear words indicating whether an interest is registrable and, if so, in what category. Such an important practical issue cannot be made to turn on a doubtful and speculative interpretation of section 2 of the Law of Property Act 1925.

The right of pre-emption constitutes a possible doubtful area in Class C (iv) but it does not affect the appellants' argument. "Pre-emption" as defined in the Oxford English Dictionary is wider than a right of first refusal.

Under the Settled Land Act when land is held subject to a settlement under section 1, where there are limited interests in land, the whole legal estate is vested in the tenant for life and he has power to sell. The equitable rights can be overreached and the legal estate will pass. Section 2 of the Law of Property Act 1925 provides other cases where equitable interests in land are overreached subject to the safeguard that the proceeds must be paid to a person or persons of the kind described in section 2. In all cases that interest must be inherently capable of attaching to the proceeds of sale. That is the sense in which "capable of being overreached" is used in section 2 (1) of the Law of Property Act 1925. It is necessary (a) that the conveyance should be made under the statutory powers; (b) that the proceeds should be paid to the trustees, etc., and (c) that the interest must be one capable of attaching to the proceeds of sale.

Section 2 (2) provides special machinery for overriding existing equitable interests by what convincers call an ad hoc trust for sale, created specifically to overreach an inconvenient equitable interest. It was amended by the Schedule to the Law of Property (Amendment) Act 1926 but the effect of the amendment is the same in this regard.

As to the effect of section 2, see Wolstenholme and Cherry's Convincing Statutes, 13th ed. (1972), vol. 1, p. 51, the note to section 2 (1). "Capable of overreaching" means capable of having that effect. Section 2 (1) is in terms dealing with "equitable interests," an expression which is not strictly ambiguous but is a phrase of indeterminate meaning which takes its colour from its context. Section 1 (8) is most illuminatory. It is clear that a right of entry is not a power: see section 1 (7). In the context of section 2 (1) "interest" is used in the ordinary legal sense and, so construed does not include a right of entry. There is a precise analogy between a right of entry that is a "bare possibility" and a "mere" or "bare" equity which is something less than an equitable interest: see Snells Equity, 26th ed. (1966), p. 629. Section 2 (3) is intended to allay doubts as to an ad hoc trust for sale overriding prior equities. There was no reason for the draftsman to exempt a right of entry specifically because it is inherently incapable of being overreached and does not need to be excepted. At the

lowest it cannot be said that there is a clear intention that everything capable of being described as a legal "interest" must either be capable of being overreached or be registrable.

Although there was a concession in the Court of Appeal on the point as to the literal construction of "right of entry," in section 1 (2) (e) of the Law of Property Act 1925, it should be considered by the House of Lords along with the registration point. The appellants accepted the Vice-Chancellor's decision against them on this point when he held that the right of re-entry here was not a legal right. It is for the respondent to show that section 1 (2) (e) should not be literally construed. The appellants should be allowed to keep the point open. Their amended printed case should read:

"10. Alternatively the appellants submit that the right of entry is a legal right falling within section 1 (2) (e) of the Law of Property Act 1925 and therefore incapable of registration as a land charge.

"11. Alternatively the appellants submit that if the right of entry is not a legal charge but an equitable charge it is not registrable under any class of land charges in the Land Charges Act 1925. ..."

A. J. Balcombe Q.C. with Peter Keenan for the respondents. In the Court of Appeal Buckley L.J. dealt with this point [1972] Ch. 326, 353-354.

The House of Lords has a general discretion to allow such an amendment as this but it will only exercise it rarely: see Demetriades v. Glasgow Corporation [1951] 1 T.L.R. 396, 398-399, 402, which shows that there must be strong grounds for allowing a point which was taken at first instance and deliberately abandoned on appeal to be raised again in the House of Lords. It is different if it was accidentally abandoned. See also Hickman v. Kent or Romney Marsh Sheepbreeders' Association (1920) 37 T.L.R. 163, 164 and Thomas v. Marconi's Wireless Telegraph Co. Ltd. [1965] 1 W.L.R. 850, 852, 853. A party is free to argue or abandon a point, as he thinks fit; it would be strange if, when he has deliberately abandoned it, he should be allowed to revive it.

John Vinelott Q.C. There is a judicial discretion. This is a clear case, because the House of Lords must consider the interrelationship between sections 1, 2 and 3 of the Law of Property Act 1925. It would be undesirable for the House to consider the question of registration with blinkers on; it is intimately tied up with the question whether the right is an equitable right at all. The provisions of sections 1-7 must be construed as a whole so that the nature of the right of re-entry in this case can be determined before the question whether it is registrable is considered. This point cannot add very much to the volume of the argument.

[Lord Wilberforce intimated that their Lordships would allow the amendment and that the respondent was entitled to put in an answer if he wished.]

John Vinelott Q.C., continuing. The words "over or in respect of" in section 1 (2) (e) of the Law of Property Act 1925 are to be construed in their natural sense, so that in this case the right of entry will revisit the term in the assigns. If it had been intended to restrict rights of entry in cases of leaseholds to rights exercisable by the lessor, the draftsman would have

said so. Such was the language contained in section 140: see also sections 141 and 146. What matters is what the statute says.

Before 1925 a right of entry, legal or equitable, which operated in relation to freehold or leasehold land, not being reserved by a lease, was subject to the rule against perpetuities. The estate revisited is not destroyed.

It has been suggested that it is strange that a right of entry onto a freehold not annexed to a rent charge is equitable, but in the case of a legal term it is legal. The answer may be that the draftsman had forgotten the cases exemplified by Ex parte Ralph, De Gex (Bankruptcy) 219.

If section 1 (2) (e) of the Law of Property Act 1925 includes a right of entry in gross, it must be accepted that "interest" here is used in a sense which includes a bare possibility.

(3) It must have been known to the draftsman of the assignment of October 31, 1961, that the covenant would not bind third parties. The right of re-entry was designed to cover the situation of a breach by a person who could not be made directly liable on the covenant, which would not bind him, but only the purchaser. All the covenants are reciprocal. It would be odd if the respondent as assignee of the benefit of the covenants entered into by the appellant could enforce the right of re-entry but the appellant could neither enforce positive covenants entered into by Thornber nor exercise the right of re-entry for breach of those covenants. The relevant covenant is one dealing with things done or omitted, not only by the purchaser, but also by his successor: see section 79 of the Law of Property Act 1925. It is in substance a warranty by the purchaser that he and his successor will do certain things. On this point reliance is placed on the words of Russell L.J. in the Court of Appeal in the present case [1972] Ch. 326, 345D-346B. A further consideration is that as between the original parties the stipulations are enforceable and are unaffected by the rule against perpetuities, which only applies to the extent that an interest in land binding on third parties may be created. Thus the restriction to the perpetuity period shows that the parties contemplated that the covenant would be enforceable against a successor in title to the assignee.

Buckley L.J., taking a different view from Russell L.J., relied on the argument that, as between landlord and tenant, a right of re-entry can only be enforced against a successor in title if it arises on breach of a covenant binding on him, that is, if it "touches and concerns" the land. To this argument there are two answers. First, there is no analogy between the present case and a case between landlord and tenant. In the case of a lease the lessor and the lessee have both an interest in the land which is "touched and concerned" whereas this appellant has no legal interest in the land assigned. The covenant is taken for the protection of the other land of the appellant. If an analogy is to be found a closer analogy is with restrictive covenants. Here the covenant does "touch and concern" otherland of the covenantee.

The second answer is that the rule relied on by Buckley L.J. is of doubtful validity, even within the law of landlord and tenant. The two cases cited do not support it.

In Stevens v. Copp (1868) L.R. 4 Exch. 20, 24 the plaintiff was assignee of the reversion and it was clear that under the old law he could not take the benefit of the covenant (or of a right of re-entry for breach of it) unless

the covenant was one which touched and concerned the land. But the defendant was also assignee of the term and if there were a rule that the right of re-entry could not be enforced against him unless the covenant touched and concerned the land, it is hard to see why the decision was not based on that ground.

In Horsey Estate Ltd. v. Steiger [1899] 2 Q.B. 29 the plaintiff was again assignee of the reversion. Lord Russell of Killowen C.J. considered two questions, first, whether the right of re-entry was exercisable on the bankruptcy of the original lessee only or on the bankruptcy of a successor and, secondly, whether the right of re-entry ran with the reversioner, a question which turned on whether the covenant "touched and concerned" the land. Section 10 of the Conveyancing Act 1881 was not referred to.

Thus neither of these two authorities is conclusive of this question. On principle, there is no reason why, if there is a condition for re-entry in a lease, the original lessor should not enforce the condition against an assignee of the lessee and no reason why the right of re-entry should not be assigned: see Megarry and Wade on The Law of Real Property, 3rd ed., p. 744.

(4) The courts have no jurisdiction to relieve against forfeiture by re-entry. Relief falls into two main categories: (1) The case of a creditor in respect of a quantified sum of money, when relief may be given because the land is only a security; (2) The courts also relieve against forfeiture for non-payment of rent, regarding the land as a mere security. Under this head there is no general jurisdiction to relieve against forfeiture for breach of a covenant. Courts of equity have always had jurisdiction to relieve in the case of fraud, mistake, accident or surprise. But these categories were always very narrow and the courts have never relieved in cases of mere inadvertence or forgetfulness or, a fortiori, wilful breach. Historically there was a period in the lath century when the court would relieve against a breach of a condition by a lessee to keep fences in proper repair, even if the breach were inadvertent or forgetful. But in Hill v. Barclay (1811) 18 Ves.Jun. 56 these cases were overruled. That decision was followed in Bracebridge v. Buckley (1816) 2 Price 200 (see also Rolfe v. Harris (1811) 2 Price 206n.) and in Barrow v. Isaacs & Son [1891] 1 Q.B. 417 (which gives valuable guidance on the principles on which relief is granted) and Eastern Telegraph Co. Ltd. v. Dent [1899] 1 Q.B. 835. It was also indorsed in Hughes v. Metropolitan Railway Co. (1876) 1 C.P.D. 120, 134; (1877) 2 App.Cas. 439, 447. The Court of Appeal treated the case as for relief against forfeiture but in the House of Lords Lord Cairns L.C. held that because there had been no fraud there could be no relief. That case was very different from the present case. It was dealing with the equitable rule that a party who has misled another into thinking that he will not proceed for a certain time cannot do so until that time has elapsed. Contrast Birmingham and District Land Co. v. London and North Western Railway Co. (1888) 40 Ch.D. 268, 285-286. The principle applied in Hughes v. Metropolitan Railway Co., 2 App.Cas. 439 has nothing to do with relief against forfeiture and it should be noted that Lord Cairns L.C. denied that there was any general jurisdiction to relieve against forfeiture for breach of a covenant to repair although the facts of that case afforded the strongest ground for invoking such a jurisdiction if it existed.

Section 14 of the Conveyancing and Law of Property Act 1881 gives

the courts a general jurisdiction to relieve against forfeiture in the case of a lease, subject to statutory restrictions. This indicates that it was not intended that there should be a corresponding jurisdiction outside the case of leases. Equity cannot relieve against forfeiture in a case like the present unless there is fraud, accident, mistake or surprise - all narrow exemptions. If the House of Lords considers that the courts have since Hill v. Barclay, 18 Ves.Jun. 56 taken too restrictive a view of the power of the court in relation to relief against forfeiture the jurisdiction should be extended by enlarging the existing categories for relief and not by invoking some new general jurisdiction to interfere with contractual rights and obligations. On no conceivable extension of the existing categories could the respondent qualify for relief.

What is the ground on which the courts do not grant relief from forfeiture for breach of a covenant to repair? In the earlier cases it was suggested that the reason was the inability of the court to supervise building works. But that was not the only ground or the best ground. The courts were misled by the apparent analogy of cases where the courts would not order specific performance: see the Hughes case, 1 C.P.D. 120; 2 App.Cas. 439. The true ground is that given by Lord Eldon L.C. in Hill v. Barclay, 18 Ves.Jun. 56, where he said that the court cannot assume any general jurisdiction to vary other people's contracts, since there would be no end to it. The courts relieve only in cases where to insist on the strict enforcement of the literal terms of the contract would amount to equitable fraud or would deny the spirit of the contract. The court does not vary the contract but gives effect to it as it would be performed by fair-minded and just persons. There is no assumption of any jurisdiction to tear up the contract.

(5) Even if the submissions of the appellants are wholly wrong, the court has a discretion in this matter and an appellate tribunal will not interfere with the exercise of that discretion unless it has been exercised on a wholly wrong principle. The trial judge is in a position to get the feel of a case. Here he saw the parties and was able to estimate what sort of a person the defendant was.

A defendant in such a case when seeking relief must show that he is able and willing to make the premises good: see Barton Thompson and Co. Ltd. v. Stapling Machines Co. [1966] Ch. 499, 510. The applicant must be in a position to carry out the works. That wa,s not the case here. The defendant admitted that he would have to sell the property to someone else before he would have the money to carry out the work. It would be unjust that the plaintiffs should be faced with the continuance of a very unsatisfactory state of affairs while the defendant searched for a purchaser. The defendant did not reach the starting gate in showing himself able, ready and willing to do the work.

Further the court does not relieve against a deliberate breach of covenant: Bracebridge v. Buckley, 2 Price 200, 206-212. Here the defendant had a reasonable opportunity to carry out the repairs. He knew of the covenants throughout. They were constantly brought to his attention.

Andrew Morritt following. As to overreaching, see section 2 (3) of the Law of Property Act 1925, which was considered in the Court of Appeal [1972] Ch. 326, 329 (the present respondent's argument), 340-341

(Russell L.J.), 354-355 (Buckley L.J.). The Court of Appeal made the assumption that the right of entry was an interest and not just a right.

Section 3 (1) of the Law of Property Act 1925 enacts that: "All equitable interests and powers in or over land shall be enforceable against the estate owner of the legal estate affected in manner following. ..." Section 2 (3) refers to "equitable interests and powers": see also section 3 (1) (c) and (3). Subsection (1) is dealing with the enforcement of equitable interests and powers. Subsection (3) is dealing in terms with an equitable right of entry. It is remarkable that the equitable right of entry is treated by the draftsman as being different from equitable interests and powers, indicating that he did not regard an equitable right of entry as being an equitable interest.

Section 4 (2) of the Law of Property Act 1925 covers three different contingencies: (a) an equitable interest pure and simple; (b) a possibility coupled with an interest; and (c) rights of entry which are bare possibilities, the distinction which the draftsman must have had in mind. He used the term "equitable interest" in the sense in which it would have been understood by the convincers of the day. In Fearne on Contingent Remainders,10th ed. (1844), vol. 2, pp. 21-22 a right of entry was a quasi interest and not an equitable interest. There is an equivalent passage in Preston on Estates (1820), vol. 1, p. 441: see also Challis's Real Property,3rd ed., pp. 74-77. The position so stated must have been in the mind of the draftsman of the Act. Section 1 (1) of the Act treats of the estates which are capable of subsisting at law and section 1 (2) treats of the five categories of legal interests. Subsection (2) (e) includes only some rights of entry, as defined, interests capable of subsisting at law: see also section 205 (1) (x). There is no justification for thinking that an equitable right of entry is a right of entry affected by the overreaching provisions. The equitable right of entry would be in the root of title and so there would be notice although it could not be registered. It is not a matter of comment one way or the other that it should not be registrable. The Land Charges Act cannot be confined to equitable interests. Before 1925 a right of entry could exist either at law or in equity.

Class D (iii) of section 10 (1) of the Land Charges Act 1925 should be given its natural construction. The question of overreaching does not arise here at all. It would be wrong to give the words "easement, right or privilege" in Class D (iii) a forced construction so as to remove what is represented as a casus omissus.

A. J. Balcombe Q.C. and Peter Keenan for the respondent. The following questions arise: (1) Whether a right of re-entry over leaseholds is enforceable when (as here) it is not annexed to any reversion to support it; (2) Whether a right of re-entry is enforceable when the covenants which it supports are no longer enforceable (a) as a matter of general law or (b) on the particular construction of the documents in the case; (3) Whether the right of re-entry here is legal or equitable; (4) If this is an equitable right, whether it is registrable as a land charge under Class C (iv) or Class D (iii) of section 10 (1) of the Land Charges Act 1925; (5) If the right of re-entry is presently enforceable, whether there is jurisdiction to relieve from forfeiture; (6) If so, whether it should be exercised in the present case.

As to (1) a right of entry in gross cannot exist. The legislation of 1925

was directed to achieve the free marketability of land. The law has always resisted attempts to make land inalienable. Despite the Statute De Donis in 1285 which allowed the creation of estates which were virtually inalienable the courts devised ways of barring the entail to prevent it from lasting more than a generation. There is also the rule against perpetuities. Several statutes culminating in the legislation of 1925 sought to make land more freely marketable. In the light of the policy there is no authority binding the House of Lords to hold that there can be a right of re-entry over leaseholds when there is no reversion to support it.

Doe d. Freeman v. Bateman, 2 B. & Ald. 168 was decided against the defendant's present contention but all the cases cited in that case related to free holds. The fee simple was the highest estate which could exist in law. As to reversions and remainders, see Megarry and Wade's Real Property, 3rd ed., pp. 185-186, 191-192. What is left after a conditional fee has been created is in modern terms "the reversion." Under the old law there could not be a reversion expectant on a fee simple, but, carved out of the absolute interest, there could be a right of re-entry in another person's hands. With regard to Doe d. Freeman v. Bateman, 2 B. & Ald. 168, see Coke on Littleton, 1832 ed., vol. 2, section 325 (201A-202A) and section 347 (214A). If one got rid of the reversion one had the right of entry. See also Viner's Abridgement (1792 ed.), vol. 5, 312, plea 17. The courts will not allow interests in land to be created which have the effect of making land hard to market. The policy of the courts is to prevent the creation of interests in land which render it inalienable: see also Bacon's Abridgement (1736 ed.), vol. 1, pp. 400-401. All these texts are referring to fees simple. The rules applicable to fees simple never generally applied to leaseholds. As to interests in leaseholds, see Megarry and Wade's Real Property, 3rd ed., pp. 46-47.

In the case of chattels there cannot be an interest in remainder or reversion. So, for example, one cannot create a life estate in a motor-car nor a right of entry in respect of it. A hire-purchase agreement is a hiring with an option to purchase; the owner remains the owner until the last instalment is paid; he has not given the property away, reserving a right to re-enter. See Anon. (1552) 1 Dyer 74 b; Lord North v. Butts (1556) 2 Dyer 139 b; Woodcock v. Woodcock (1600) Cro.Eliz. 795 and Wright d. Plowden v. Cartwright (1757) 1 Burr. 282. One cannot create a limited estate out of leaseholds, since one could not create less than an absolute estate in a term of years. The law in relation to leaseholds was always different from the law of free holds. The law would not allow the creation of rights of re-entry in the air. Only under section 130 of the Law of Property Act 1925 did it become possible to entail personal property.

The idea of a right of re-entry in gross not attached to a reversion or a rent charge is strange, despite Hyde v. Warden, 3 Ex.D. 72 and Freeman's case, 2 B. & Ald. 168, which were wrongly decided and should be overruled.

As to conditional rights under the legislation of 1925, section 1 (1) of the Settled Land Act 1925 clearly covered a determinable fee (defined in section 117 (1) (iv)) but not a fee simple entail.

One must distinguish between a right of entry to go onto land and do something, e.g., repair, and a right of re-entry enabling one to go in and possess oneself of the whole estate.

As to question (2) (a), the right of re-entry depends on the enforceability of the covenants which it supports: Stevens v. Copp, L.R. 4 Ex. 20 and Horsey Estate Ltd. v. Steiger [1899] 2 Q.B. 79, 83, 88-89. The principle there laid down is clear and the court applied the same basic rules to conditions as to covenants. One is here applying a principle and not isolated technical rules. Conditions and covenants stand or fall together: see also Lewin v. American and Colonial Distributors Ltd. [1945] Ch. 225, 228, 230-231. As to the use of rent charges in enforcing covenants, see George and George on the Sale of Flats, 3rd ed. (1970), p. 77. As between landlord and tenant a condition for re-entry for forfeiture is only enforceable by the assignor of the reversion against an assignee of the term or of the reversion if it touches and concerns the land.

The law demands that some test be applied to the proviso for forfeiture or breach of covenant as to the enforceability of the covenants themselves. The law does not normally enforce contractual obligations save between the original contracting parties. In the case of landlord and tenant the law has long made an exception allowing covenants to be enforced between persons not the original contracting parties if there was privity of estate, but only covenants which touch and concern the land demised. A condition of forfeiture or re-entry for breach of covenant can only be enforced against an assignee of the term if it touches and concerns the land demised. Why should a condition of re-entry be subject to the same rules as a breach of covenant? Because when one has a right of re-entry (which is machinery for enforcement) then if the covenants themselves are not enforceable, neither should the machinery. The landlord and tenant cases lay down two rules; (1) that covenants are only enforceable; and (2) the right of re-entry will only be enforced between persons who are not the original parties to the contract, if they touch and concern the land. There is no reason why a lessor should not ab initio say that if the land comes into the hands of a particular sort of person to whom he objects, e.g., a person who has broken the game laws, he shall be entitled to re-enter. But the courts have decided that they will not enforce such a covenant unless it touches and concerns the land. That is because the right of entry and the covenants which it supports stand or fall together.

As to question (2) (b), on the construction of the assignment, there cannot be a failure to perform or observe the covenants within clause 7 (a), when they are not enforceable, i.e., when they are not binding on the person in question. A person in the position of the respondent, who is not the original contracting party and who has given no covenants cannot be said to have failed to observe them if they were never binding on him in the first place; he was never a contracting party. If there must be a failure on his part to perform or observe the covenants, one must find an obligation on him to perform or observe them. But he never became bound because the covenants were not enforceable against him; he was under no obligation, legal or equitable, to observe them. One is not here concerned with morals. If the document had been expressed passively and had said that if any of the stipulations be not performed or observed there should be a right of re-entry, that would have achieved the result contended for by the appellants, but these were not the words used. Reliance is placed on what Buckley L.J. said in the Court of Appeal in the present case [1972] Ch. 326, 357. There

has admittedly been a breach of covenant, but it is one for which the respondent is not liable. As to Ex parte Ralph, De Gex (Bankruptcy) 219, 228 there was a significant difference between the covenant which the judge was prepared to accept and the one in the present case. In that case there was someone who at all times would be liable to perform and observe the covenants, the original contracting purchaser. That case is no help in the construction of the present covenant.

As to the construction of clause 7 (a) of the assignment, see also Banning v. Wright [1972] 1 W.L.R. 972, 978-979, 980, 982, 988-989, 990-991 as to the meaning of "waiver," which indicates the waiver of a rights In clause 7 (a) the words "notwithstanding the waiver of any previous default" must in the context refer to the right to enforce, not the right to re-enter, i.e., the right to enforce past breaches of covenant.

As to (3), before the legislation of 1925 a purchaser was bound by all legal incidents, whether or not he had notice of them and by all equitable rights of which he had notice, actual or constructive. The policy of this legislation was to cut down the legal estates to two, a fee simple absolute and a term of years absolute, and also to protect equitable interests by registration: see section 1 (1) and (2) of the Law of Property Act 1925. As to subsection (2) (c) dealing with a charge by way of legal mortgage, compare with section 87. The present case is concerned with subsection (2) (e), rights of entry. The draftsman assumed that the right must co-exist with the legal term of years over which it was exercisable.

Legal rights of entry have always been confined to those annexed to a rent charge or the like. One must distinguish a right of re-entry from a right of entry to repair. The former, which destroys the term, is over the term of years, the latter is in respect of it.

The pattern of the legislation of 1925 was that there should henceforth only be two legal estates, the freehold and the term of years absolute. The same pattern should be followed throughout.

The rule against perpetuities requires that there must be a vesting within a life or lives in being and 21 years thereafter. There is an exception in the case of the revisiting of an estate in a landlord. But here the right of re-entry is not to be exercised by the landlord, but by a neighbour of the defendant and accordingly it falls within the rule against perpetuities.

The right of re-entry is not in the present case over or in respect of the term of years in the true sense. It does not destroy the term but only the assignment, revisiting the term in another.

Alternatively, if there can be a right of re-entry over or in respect of an assignment, it must correspond with the term of years and not infringe the rule against perpetuities.

It is the fact that this was leasehold property which enables it to be suggested that this was a legal right of re-entry. It would be strange if that were so in the present case when it was otherwise in the case of freeholds and if this peculiar right were left outstanding as a legal right when the legislation of 1925 was cutting down legal estates.

In section 1 (2) (e) of the Law of Property Act 1925 the draftsman had in mind the common case of a right of re-entry on forfeiture in a lease or, in the case of a legal rent charge, the rights of re-entry annexed to a legal rent charge: compare section 121 (1).

Suppose these two properties had been a freehold and there had been a conveyance instead of an assignment. The same reason would have existed for these covenants, but if the appellants' submissions are correct the rights conferred would have been equitable only.

The effect of section 2 (1) (e) is not to make the right in the present case a legal right: see also the definition of "term of years absolute" in section 205 (1) (xxvii).

As to (4), the registrability of the right of entry under the Land Charges Act 1925, this depends on Class C (iv) in section 10 (1). The owner of a right of re-entry has a discretion whether or not to exercise it, as in the case of a right of pre-emption: see also the contractual obligation in section 3 (3) of the Law of Property Act 1925.

It is accepted that there are matters in which the right of pre-emption and the right of re-entry do not correspond, but one must consider the points on which they do correspond. The points on which they do correspond are sufficient in the context of Class C (iv).

The appellants did not register any of their interests. The question is whether or not the right of re-entry was registrable as a land charge under Class C (iv). At some time or other there may be an obligation to create a legal estate and it is enacted that the classes of charges or obligations must be registered. The category under Class C (iv) relates to the obligation which may arise some time to create a legal estate. That is the essential point of correspondence between the right of pre-emption and the right of re-entry. The essence of Class C (iv) is the fact that the exercise of any of the rights enumerated in it imposes an obligation. An equitable right to re-enter leading to the creation of a legal estate must be very rare. For a judicial definition of the difference between a right of first refusal and an option to purchase see Manchester Ship Canal Co. v. Manchester Racecourse Co. [ 1901] 2 Ch, 37, 46-47. See also what Russell L.J. said in the Court of Appeal in the present case [1972] Ch. 326, 344 in relation to this class of right. If this right of re-entry is not registrable under Class C (iv) it is registrable under Class D (iii), into which an equitable right of re-entry fits as an equitable interest. Class D (iii) is a "rag bag," a "sweeping up" class. Compare the case of rights under agreements within section 81 (3) of the Water Resources Act 1963 and section 13 of the Gas Act 1965. Class D (iii), taken generally is not limited to any particular type of right, e.g., a right of giving an immediate interest in possession. Nor does a right of entry involve taking physical possession until it is exercised.

There is nothing in Class D (iii) to give it any restrictive interpretation. Making an equitable right of re-entry a right registrable under Class D (iii) makes it fit into the pattern of interests which can be overreached. Section 1 (1) and (2) of the Law of Property Act 1925 defines legal estates and equitable interests. A right of entry (see section 1 (2) (e)) is an interest in or a charge over land. Whatever it was called before the legislation of 1925, section 1 (2) (e) makes it clear that in the eyes of the draftsman it was an interest in land. If a right of entry is not a charge it must be an interest. If a right of re-entry is an interest in land and does not fulfill the conditions necessary for it to be a legal interest, it must be an equitable interest. Section 205 (1) (x) supports this. The difference between section 3 (1) and

section 3 (3) can be discounted because subsection (3) is only dealing with a particular kind of equitable interest. Megarry and Wade on The Law of Real Property, 3rd ed., pp. 124-125 shows that there is a difference in kind between equitable interests in land and mere equities. The former are deliberately created while a mere equity is usually the possibility of getting equitable relief from the court in the exercise of its discretionary jurisdiction: see Westminster Bank Ltd. v. Lee [1956] Ch. 7; E. R. Ives Investment Ltd. v. High [1967] 2 Q.B. 379, 395 and Poster v. Slough Estates Ltd. [1969] 1 Ch. 495, 505-507.

If land is held by A on a bare trust for B and A conveys it to a trust corporation on trust for sale and to hold the proceeds for B, then any equitable interest of B in the land would be overreached. That is the classic use of overreaching.

A right of entry is an equitable interest within section 3 (1) of the Law of Property Act 1925. Therefore, unless specifically excepted, it would be overreached by a sale under the statutory machinery. But that is impossible because it cannot have been intended that a right of entry should be capable of being overreached therefore it must be within the specific exceptions. The only relevant categories are in Class D (iii) of the Land Charges Act and the cognate section 3 (3) (iii) of the Law of Property Act 1925. If a right of entry were not an "easement right or privilege" within Class D (iii) or an equitable interest capable of registration an anomaly would be created because, if it was overreached, it would be destroyed.

In section 3 (3) equitable rights of entry are classed as interests. By subsection (6) the section does not affect a purchaser of the legal estate taking free from an equitable interest or power. It has not been suggested that an equitable interest is a power. One has an equitable interest in land if one has a right to go onto it to collect the rents. The old cases are concerned with rights of entry in relation to freehold estates. One particular kind of right of entry has sometimes been called a quasi-interest or bare possibility. Rights of entry as referred to in the Law of Property Act 1925 should not, on the strength of that, be treated as something less than an interest in land: see section 2 (2) (v).

The Land Charges Act 1925 contains no definition of what is an equitable interest. For that one must go to the Law of Property Act 1925. Section 2 provides machinery whereby certain equitable interests can be overreached, i.e., thrown onto the proceeds of sale: see subsection (1). If it is overreached it is in effect destroyed when it cannot be replaced by money. Exemptions are provided by subsection (3). The wording of subsection (3) (iii) is almost exactly the same as that of Class D (iii) and confirms the contention that an equitable right of entry fits into that category.

If a right of entry is an equitable interest (as the respondent submits) and if it is not to be capable of being overreached, it must be found in the exceptions in subsection (3) (iii) or (v). If it is registrable, one must look at the Land Charges Act to see under what head. That is a coherent pattern. The intention of the legislation was to cut down to a minimum the legal estates in land, label the rest equitable rights, make those which could be converted into money only subsist behind the curtain of the strict settlement or trust for sale and make the rest, which could not be converted into money, the commercial sort, as distinct from family interests,

registrable. An equitable right of entry, such as the one here in question, is a commercial interest. It would be strange if it were omitted from the pattern of this legislation.

The purpose of section 1 (2) of the Law of Property Act 1925 is to limit those rights which can subsist at law. As to the effect of this, see Russell L.J. and Buckley L.J. in the Court of Appeal in the present case [1972] Ch. 326, 340, 355-356. The draftsman cannot conceivably have intended that the old law should apply and that this commercial equitable interest alone should be enforceable against the purchaser of an estate with notice of it, whereas in every other case such an interest was to be either protected by registration or void. The equitable doctrine of notice was superseded by overreaching in the case of family interests or registration in the case of commercial interests.

In 1969 the statutory period for the investigation of title was 15 years. In such a case as this, one would look at the lease itself and the assignments during that period and one would not necessarily see the assignment by which this interest was created.

Reliance is placed on section 38 (i) of the Settled Land Act 1925 relating to the powers of sale of a tenant for life. There is no reason why a right of re-entry should not come within it. The tenant for life is always subject to his overriding duty as a trustee for all parties interested expressed in section 107 (1): see also section 49 (1) (a). The policy of that Act was to give the tenant for life very wide powers to deal with the settled land: see also section 73 (1) (xi) and 74.

As to the Land Registration Act 1925 and the normal method of protection of an instrument or matter, in the case of an equitable easement, a land charge within Class D (iii), this is by notice: see section 49 (1) (c) of the Act and the table in Ruoff and Roper's Registered Conveyancing, 3rd ed. (1972), p. 741.

As to the passage in Megarry and Wade on The Law of Real Property,3rd ed., at pp. 722-723, relied on by the appellants in relation to equitable interests in land, what was said was very tentative; note the words "presumably an interest in land" and "possibly now registrable." See also The Conveyancer and Real Property Lawyer (1950), vol. 14, pp. 354-355, "Rights of Entry and Re-entry" in an article on "'Land' Without Earth: Freehold Flats in English Law" by S. M. Tolson, and (1963), vol. 27, pp. 32-33, "Equitable Interest" from an article on "Hire Purchase, Equipment, Leases and Fixtures" by A. G. Guest and Jeremy Lever, and also an article on "Equitable Easements" by C. V. Davidge in the Law Quarterly Review (1937), vol. 53, p. 259. The ordinary lawyer considers rights of re-entry to be an interest in land.

As to question (5) relating to relief from forfeiture. The general equitable principle is that relief will be granted whenever adequate compensation can be made for the breach which gave rise to the forfeiture. If this had been a landlord and tenant case before the legislation of 1925 the respondent would have been shut out. Before the decision of Lord Eldon L.C. in Hill v. Barclay, 18 Ves.Jun. 56 the courts of equity had relieved against forfeiture in such cases, but he dammed the stream of equity. The point has never been before the House of Lords which should now restore the sturgeon.

As to the earlier position in the Court of Chancery, see Popham v. Bamfield, 1 Vern. 79, 82-83; Webber v. Smith (1689) 2 Vern. 103; Nash v. Earl of Derby (1705) 2 Vern. 537; Grimston v. Lord Bruce (1707) 1 Salk. 156; Cox v. Higford (1710) 2 Vern. 664; Wadman v. Calcraft (1804) 10 Ves. Jun. 67 and Sanders v. Pope (1806) 12 Ves.Jun. 282, 284-285, 286-287. This last case summarisaes the earlier cases. Right up to that time there was a very definite line of authority to the effect that the Chancery judges claimed a general right to relieve against forfeiture. Hill v. Barclay, 18 Ves.Jun. 56, 59-60 is to be read in the light of the earlier cases. This case and Bracebridge v. Buckley, 2 Price 200, 215-219 represent the opposite line of authority. But Bargent v. Thomson (1864) 4 Giff. 473, 476, 478 shows that even in the nineteenth century the court would recognise that there were hard cases. In the case of landlord and tenant statutory relief was first granted by the Conveyancing Act 1881.

Newbolt v. Bingham (1895) 72 L.T. 852, 853 illustrates the machinery devised to grant relief from forfeiture for breach of a covenant to repair. This was embodied in Forms 1288 and 1289 in Chitty and Jacob's Queen's Bench Forms, 20th ed. (1969), pp. 818-820. Section 146 of the Law of Property Act 1925 gives full statutory right to relief in landlord and tenant cases. Belgravia Insurance Co. Ltd. v. Meah [1964] 1 Q.B. 436, 444 indicates that the jurisdiction to grant relief is as wide as that for which the respondent contends. Now the House of Lords is in a position to repair the damage done by Lord Eldon L.C. in Hill v. Barclay, 18 Ves.Jun. 56. Reliance is placed on the principles stated in Halsbury's Laws of England,3rd ed., vol. 14 (1956), para. 1190, pp. 647-648, footnote (s). See also Thomson v. Eastwood (1877) 2 App.Cas. 215, 249-250.

In Hughes v. Metropolitan Railway Co., 2 App.Cas. 439, 448 the question whether or not the court had jurisdiction to grant relief from forfeiture for breach of covenant was not argued in the House of Lords, where the case went off on a different ground. What Lord Cairns L.C. said was not a decision on the question whether there was a general equitable jurisdiction to grant relief.

In the Court of Appeal in the present case [1972] Ch. 326, 347 the effect of Hill v. Barclay, 18 Ves.Jun. 56 was considered. The House of Lords should lay down a general rule that there is an equitable jurisdiction to relieve against forfeiture. Alternatively it may make the distinction made in the Court of Appeal. It is not suggested that it should go beyond cases relating to the use and repair of land and buildings. The Court of Appeal has indicated that it is unhappy about the law relating to forfeiture and has found itself able to make a distinction. The House of Lords can do so too, but it is not bound to follow Hill v. Barclay which was not in accordance with previous authority and was decided on unsound grounds. If there is no jurisdiction to relieve, there is no room for justice in the hard case of the loss of a great estate for a trivial breach.

As to (6), relief should be granted here. It was never asked whether the respondent could raise the money necessary to fulfill the covenants if the only alternative was to lose this valuable asset. The Vice-Chancellor should have approached the case in the light of the general jurisdiction to relieve from forfeiture; he did not address his mind to this particular

point. There are several reasons why the House of Lords should relieve the respondent from forfeiture.

Before these proceedings were brought, no notice had been served on the respondent in accordance with section 146 (1) of the Law of Property Act 1925 of the water penetrating the lavatory block. When a landlord seeks to enforce an obligation to repair the outside of premises, the obligation is to be construed as an obligation to repair on notice only: Torrens v. Walker [1906] 2 Ch. 166, 171-172; Morgan v. Liverpool Corporation [1927] 2 K.B. 131. The only breach of covenant of which complaint is made in the correspondence is in relation to the bricking-up of the openings. If this had been a landlord and tenant case no court would have contemplated refusing relief in respect of the breaches here proved, having regard to the court's extended jurisdiction.

Peter Keenan following. On the question whether the right of re-entry was legal or equitable, section 1 of the Law of Property Act 1925 aimed at achieving a basic simplification by dividing estates and interests into legal or equitable depending essentially on the persons for which those estates and interests were created. In construing section 1 (2) (e) relating to rights of entry there should be no departure from the basic pattern of the section. A right which, as here, conforms in operation to neither the fee simple absolute in possession nor the term of years absolute is to be treated as an equitable right. The words "over or in respect of" in section 1 (2) (e) are used to cover two kinds of rights of entry (a) absolute ("over") and (b) limited ("in respect of").

To hold that there is here a legal right of re-entry would produce injustice in practical terms. Under section 44 (1) of that Act the statutory period for the commencement of title was fixed at 30 years. By section 23 of the Law of Property Act 1969 that was reduced to 15 years. If the appellants are right a person could be bound by a right of re-entry created before the statutory period, of which he had no notice e.g., say that in 1900 a lease of three houses was granted and that in 1930 there was an assignment of all three creating a right of re-entry in terms similar to those in the present case; if the deeds were destroyed during the last war or otherwise lost someone purchasing one of the houses now, with a 15 year root of title would have no notice of the legal right of re-entry but would be bound by it. The Act must be construed in the light of the consequences of the application of the statutory period. If, however, the right is equitable and registrable it could be protected by registration and section 25 of the Law of Property Act 1969 makes provision for compensation in certain cases for loss due to undisclosed land charges of which the purchasers did not have notice. If the right of re-entry is an equitable property right of the kind suggested by the appellants, all would depend on whether or not there was notice of it, which would give insufficient protection to such an important right. That is not what one would have expected from this sort of legislation.

As to the proviso to section 13 (2) of the Land Charges Act it covers both Class C (iv) and Class D (iii) and so there is no problem in choosing one or the other as suitable for the present right of re-entry.

As to the court's jurisdiction to grant relief from forfeiture, in Hill v.

Barclay, 18 Ves.Jun. 56 exceptions were laid down in the case of which the court would grant relief; one was surprise. If the House of Lords felt itself bound by that case the exception of surprise should be construed in the light of modern practice. What constitutes surprise depends on the customs of the community. The modern practice is embodied in section 146 (1) of the Law of Property Act 1925, under which a lessor must give the tenant notice of the breach complained of and require him to remedy it. This practice has continued for so long that "surprise" should be given an up-to-date meaning.

Until the respondent received the writ in these proceedings he did not know that the appellants were going to forfeit the lease.

If the House of Lords granted relief in a case of this kind, its decision would be confined to a very narrow field, that of forfeiture of a legal estate where no breach of contract or covenant between the original parties was involved because here one is not dealing with the original contracting parties.

Vinelott Q.C. in reply. As to the respondent's first question, Anon. 1 Dyer 74 b and Lord North v. Butts, 2 Dyer 139 b do not whittle down Doe d. Freeman v. Bateman, 2 B. & Ald. 168 but rather strengthen the proposition that one can have a right of re-entry in leaseholds, while one cannot have a limited interest or an interest by way of reversion or remainder. The person who has a right of re-entry has no right to an estate or interest in the land. That rule is fundamental. A right of entry was not originally assignable but a legal estate has been assignable since the twelfth century. A right of entry could not be devised until the Wills Act 1837 but a legal estate or interest could be devised since the Wills Act 1540. One could only reserve a right of entry to persons in right of blood, i.e., what would now be personal representatives. A right of entry was subject to limitations because it was a personal right conferring no estate or interest. It was personal not in the sense of being contractual but in the sense of only being capable of being exercised by the grantor of the estate. The doctrine in Doe d. Freeman v. Bateman, 2 B. & Ald. 168: see Viner's Abridgement, 1791-1794 ed., vol. 5, p. 312, plea 19, the very example with which that case is concerned. A right of entry confers no estate till it is exercised.

The common law was always jealous of its own rules and the common law courts were always reluctant to give effect to statutes touching those rules. Thus in the case of the Grantees of Reversions Act 1540 the courts construed it as applying only to covenants or conditions which touched or concerned the land.

But under the common law a right of entry for breach could always be exercised against the person in possession of the land and as against a tenant there was no reason to limit the enforcement of rights of re-entry by the original lessor to the enforcement of the rights to re-enter for breach of a covenant which touched and concerned the land. In Horsey Estate Ltd. v. Steigel [1899] 2 Q.B. 79, the condition breach of which gave rise to the right of re-entry was not a covenant. There was no prior obligation enforceable between the parties. That case was followed in Lewin v. American and Colonial Distributors Ltd. [1945] Ch. 225, 230-231 where again the reversion had been assigned. In Horsey there were

two main questions (a) whether the condition for forfeiture on bankruptcy applied on bankruptcy of the original tenant or on bankruptcy of the tenant for the time being and (b) whether the condition touched and concerned the land demised. The argument confused these two points, and if and so far as the court decided that the condition could only have been enforced by the original lessor against an assignee of the lease if it "touched and concerned" the land the decision was per incuriam. That principle, if correct, would have been a perfect answer to Stevens v. Capp, L.R. 4 Exch. 20, where, however, there is no hint of it.

Even if Horsey [1899] 2 Q.B. 79 was correctly decided it has no application outside the field of landlord and tenant. It cannot apply to a condition imposed on the assignment of a lease for the protection of other land of the assignor. There is no analogy here with the relationship between laundered and tenant, both of whom have a common interest in the land affected by the covenant or condition. A closer analogy is a restrictive covenant which must be capable of benefiting other land of the covenantee. That requirement would be satisfied here.

Buckley L.J. in the Court of Appeal in the present case [1972] Ch. 326, 357, when he says that the covenants only "touched and concerned" the land while they remained enforceable, turns the principle upside down. Enforceability is the consequence of the covenant touching and concerning the land. The covenant does not touch and concern the land because it is enforceable.

On question (3) whether a right of re-entry is legal or equitable, no policy is to be inferred to protect commercial interests by registration or to cut down legal rights to the essential minimum. The general policy of the Act was to amend the Conveyancing Act 1882 and to put family interests in land "behind the curtain." The difference between a right of entry and a right of re-entry is that the latter is a right to go in again and the former is a right to go where one has not been before. Formerly a stranger could not have a right of entry or re-entry on a condition: Lyttleton's Tenures, c. 5, para. 347, but since section 4 (3) of the Law of Property Act 1925 a right of entry can be given to someone other than the grantor.

The attempt to distinguish rights "over" and "in respect" of the term of years are merely a matter of grammar and are unsupported by any precedents. Each expression is just as apt to describe a right as the other. The use of the word affecting in section 4 (3) is quite general. In section 1 (2) the language describing the interests or charges capable of subsisting at law is comprehensive. There is no reason for excluding a right of entry from the effect of section 1 (2) (e) when it has been reserved in the assignment of a lease. A right of entry is aptly described as exercisable over a term of years, though it may shift from one person to another. If the legislature had in mind a right of entry which would bring the term of years to an end, that result would be achieved by specifying a "right of entry exercisable by the lessor."

The definition of "term of years absolute" in section 205 (1) (xxvii) of the Law of Property Act 1925 includes two terms which would not have been leasehold estates at common law: (a) the mortgage term, a statutory form of lease under which no rent is payable, and (b) an equitable term of

years absolute: see Wolstenholme and Cherry's Conveyancing Statutes,12th ed., vol. 1, p. 590.

A right of entry under section 1 (2) (e) need not be coterminous with the lease. It may be limited to a certain period as, for example, in a building lease to enforce the builder's obligation to build. If it had meant a right of entry only exercisable by the lessor, it would have been easy to say so in the Act. The respondent's construction would lead to strange results and a strained construction.

In the case of a right of re-entry over a fee simple estate not annexed to a rent charge, the right would go on for ever subject to the rule against perpetuities but in the case of a lease it would be terminated by the end of the lease. This is the result produced by section 4 (3).

In the ordinary way, if one takes an assignment of a lease, one sees the lease and so one is put on notice of a right of re-entry. It is true that earlier assignments may have got lost, but that can happen in the case of an easement. In investigating title one is entitled to go back to earlier documents which cast light on matters referred to in later documents: see section 45 (1) of the Act.

"Interest," apart from its strict technical meaning, has a wide use, making it mean different things, according to the context. There is nothing in the Law of Property Act 1925 inconsistent with treating section 1 (2) (e) as covering a right of re-entry created on an assignment. Equally there is nothing in section 1 (2) (e) itself which compels any more limited construction.

As to question (4), whether the right of re-entry is registrable as a land charge, Class D (iii) is not a "rag bag" and has no different function from the other specific categories. For the respondent, section 81 (3) of the Water Resources Act 1963 was referred to. But see also subsection (4). If in Class D (iii) the words "right ... affecting land" were given its widest possible meaning subsection (4) would be unnecessary because the agreements referred to therein do create rights affecting land. Subsection (4) was necessary because the rights created by agreements under subsection (1) were very like easements but were not easements; there was no dominant tenement but there was a right in gross. The rights under that section are rights affecting land and subsection (4) says that they are to be registered as if they were land charges. So too in the case of section 13 (6) of the Gas Act 1965. The category in Class D (iii) has a narrow scope.

Poster v. Slough Estates Ltd. [1969] 1 Ch. 495, in its actual decision is of no direct relevance to the present case. The appellants do not ask the House of Lords either to accept or reject the view of Lord Denning, cited at p. 507, or the article in the Law Quarterly Review there referred to. If in Class D (iii) the words "easement right or privilege" comprehend rights in general giving an advantage over the land of another, not a proprietary right, that is enough for the appellants' purposes.

As to overreaching, Class D (iii) construed by itself, comprehends rights to use or have some advantage from the land of another, not proprietary rights.

It is not accurate to say that the policy of the legislation of 1925 was that the equitable doctrine of notice should be superseded by overreaching in the case of family settlements or registration in the case of commercial

interests. Equitable interests capable of being overreached are not in fact overreached unless a particular machinery is used, including the very special machinery in section 2 (2) of the Law of Property Act 1925, the ad hoc trust for sale.

The respondent's argument as to overreaching can be turned round the other way thus: (1) A right of entry is not within any of the exceptions in section 3 (3) naturally construed; (2) Therefore if it were an equitable interest within section 3 (1) it would be overreached by a sale under the statutory machinery; (3) But it cannot have been intended that it should be capable of being overreached; (4) Therefore it is not an equitable interest. Both the argument for the appellants and that for the respondent are logically impeccable, but they lead to opposite conclusions.

The whole question is whether a right of entry is an equitable interest within section 3 (1). Not only is it not an equitable interest within section 3 (1); it is one of the class of rights which are not within any specific exception and are not capable of being overreached. An equitable right of entry is a mere equity. Equitable estoppel may give rise to a mere equity or it may create something like a proprietary interest. A classic example of a mere equity is a right to set aside a conveyance, a right which binds a third party with notice. A right to set aside a conveyance is not discretionary. An equitable right of entry is very like a mere equity in that there is no immediate proprietary interest. Contrast this with a wife's "equity" in the matrimonial home which is a mere right to remain in the matrimonial home exercisable only against her husband. A wife's "equity" is not really an equity at all: see National Provincial Bank Ltd. v. Hastings Car Mart Ltd. [1965] A.C. 1175, 1237-1238. The wife's right is sui generis and does not give rise to any interest in the land.

A mere equity does not bind a purchaser for value without notice, which a legal right does. An equitable right of entry is a mere equity. When a grantor conveys an estate he conveys the entire legal estate. The right to set aside a conveyance is not registrable. That must also apply to an equitable right of re-entry.

Alternatively, an "interest" is an indefinable word and one cannot define every aspect of what it comprehends. One must look at the context. Equitable interests in this context do not comprehend interests which are inherently incapable of being overreached.

As to equitable estoppel giving rise to an interest of a proprietary kind, see Snell's Principles of Equity, 26th ed., pp. 629, 632.

Section 1 (2) (a)-(e) of the Law of Property Act 1925 refers to "interests or charges." If the appellants are right in submitting that a right of entry is legal the question whether or not it is an interest within section 2 (1) is immaterial. Only if they are wrong in that does the meaning of interest "in section 2 (1) arise at all. Section 1 (8) does not advance the matter at all because, if the right of entry is a legal right, cadit quaestio.

Nothing in the subsequent section produces any anomaly if a mere equity is not treated as an equitable interest.

Section 3 (1) is the counterpart of section 1 (2). Section 4 (2), (3) indicates that the draftsman did not consider that a right of entry is an interest. Section 6 of the Real Property Act 1845 is reflected in section

4 (2) of the Act of 1925. There is throughout a contrast between "right" and "interest."

As to (5) on the power to relieve against forfeiture, in the eighteenth century, before Hill v. Barclay, 18 Ves.Jun. 56, the courts gave relief for breach of covenant: see, for instance, Sanders v. Pope, 12 Ves.Jun. 282. All that was reversed in Hill's case, after which the general jurisdiction was never exercised. In Popham v. Bamfield, 1 Vern. 79 the observations of Lord Nottingham L.C. must be read in their context. The result of the inquiry directed is reported 1 Vern. 167. Lord Nottingham left open the question whether he would relieve. (The account proceeded though there was an appeal to the House of Lords, 1 Vern. 344.) Bargent v. Thomson, 4 Giff. 473 was a case of surprise, or accident: see White and Tudor's Leading Cases in Equity, 9th ed. (1928), vol. 2, p. 239. It was an extreme case of equity relieving where there was surprise or accident. Hughes v. Metropolitan Railway Co., 2 App.Cas. 439 affirms the absence of any general jurisdiction to relieve against forfeiture. Compare Snells Principles of Equity,26th ed., p. 259.

The rule that the court will not grant relief from forfeiture for breach of covenants to repair cannot have been founded on the inability of the court to supervise the works. It could always make relief conditional on the works of repair being carried out; the master could rule whether or not they had been. The true basic reason is that the court cannot assume a general jurisdiction to alter other people's contracts.

It is too late to take a new course departing from Hill's case, 18 Ves.Jun. 56. To go back on it would be to assume a jurisdiction concurrent with the statutory jurisdiction. If the House of Lords were to assume a general jurisdiction to relieve, it would have to set limits to it. It could not be limited to land. Dealings with land now approximate more to commercial contracts and the court cannot alter commercial contracts. If a person deliberately breaks a contract, there is no reason why he should not be penalised or why the court should remake the contract: see Samuel Properties (Developments) Ltd. v. Hayek [1972] 1 W.L.R. 1296.

Conditions are very common, e.g., provisions for divesting an interest if a person enters a convent, or marries, or a name and arms clause divesting an interest if the person in question fails to assume the name and arms. If there is nothing offensive to public policy a donor or a lessor can frame his grant as he wills.

On (6), whether the respondent should be relieved from forfeiture, it is conceded that there was a breach of covenant. Once there is a breach. the exercise of a right of entry does not require notice. Notice is only relevant on the question of relief. Thus the court would relieve from forfeiture if the tenant never had an opportunity of knowing what he was required to do. In this case the respondent was told time and time again what the covenants were and that the appellant was concerned about his breaches of them. The respondent was totally unco-operative and he is not a person who would be entitled to relief on the ground that notice was not served on him.

Once some breaches of covenant which would confer a right to forfeit are established, one looks at the whole picture. Here it is crucial that the fences were in a shocking condition. A person seeking relief must show

that he is able, ready and willing to remedy the defect. The respondent has admitted that he cannot.

A. J. Balcombe Q.C. The Samuel Properties case [1972] 1 W.L.R. 1296 cited in reply is no help in the present case: see Russell L.J. at p. 1305 and Edmund Davies L.J. at pp. 1307-1308.

Their Lordships took time for consideration.

December 13, 1972, LORD WILBERFORCE. My Lords, the present dispute, one of a commonplace character between neighbours, was tried in the County Palatine Court of Lancaster by Burgess V.-C. who, after a full hearing and in a careful judgment, allowed the appellants' claim. It has attracted in its subsequent progress a number of points of law, more or less substantial, which may have wider influence. I can state the facts briefly. [His Lordship stated the facts and continued:]

My Lords, the questions which arise may be logically arranged in the following order:

1. Whether a right of entry can be validly reserved on an assignment of leasehold property when the assignor retains no reversion.

2. Whether a right of entry can subsist in law in respect of noncompliance with covenants if those covenants, as such, are not enforceable.

3. As a matter of construction of the assignment whether the right of entry is exercisable in the circumstances of the case.

4. Whether the right of entry is exercisable against the respondent, a purchaser for value, not having been registered under the Land Charges Act 1925.

5. Whether this is a case where a court of equity may grant relief against exercise of the right of entry.

6. Whether relief should be granted to the respondent in the circumstances.

My Lords, I can deal briefly with the first three questions. The question of law raised by the first was answered in the affirmative in 1818 by the King's Bench, following older authorities, in Doe d. Freeman v. Bateman (1818) 2 B. & Ald. 168. In 1877 this case was approved by the Court of Appeal in Hyde v. Warden (1877) 3 Ex.D. 72, 84 and it has never been criticized. No intelligible objection in point of principle was formulated against the proposition so stated, which would merely apply to leaseholds a similar rule as, indisputably, applies to free holds. In my opinion this House should leave it undisturbed.

As regards the second question, there is again, no convincing reason for giving other than a positive answer. The purpose of the right of entry was to provide a remedy to the lessor in the event - clearly foreseeable since some of the covenants are positive in character - that the covenants themselves could not be enforced against assignees. The only support in law for a negative answer was sought to be drawn from two cases between landlord and tenant - Stevens v. Copp (1868) L.R. 4 Exch. 20 and Horsey Estate Ltd. v. Steiger [1899] 2 Q.B. 79. Neither of these cases gives me satisfaction but it is not necessary to disagree with them since they do not apply directly. Moreover the principle accepted in Doe d. Freeman v. Bateman that the validity of the right of entry does not depend upon

annexation to a reversion, removes any reason for their application here by analogy. I can see no reason for applying technical rules which since the 16th century have confused the law of landlord and tenant to a different relationship, namely, one which is, or at least closely resembles, that of restrictive covenants.

On the third question, the respondent sought to invoke the words "failure to perform and observe" and "default" appearing in the re-entry clause in order to found an argument that this clause became inoperative when the covenants themselves became unenforceable. The argument, though forcefully put, failed to persuade me that the construction it sought to place on the clause was otherwise than strained. Since this is an issue which does not extend beyond the present litigation I am content to express my entire satisfaction with the disposal of it by Russell L.J., any addition to whose words would be repetitive.

The next question is of a substantial character. The right of entry, it is said, is unenforceable against the respondent, although he took with actual notice of it, because it was not registered as a charge under the Land Charges Act 1925. There is no doubt that if it was capable of registration under that Act, it is unenforceable if not registered: the appellants deny that it was so capable either (i) because it was a legal right, not an equitable right, or (ii) because, if equitable, it does not fall within any of the classes or descriptions of charges registration of which is required.

I consider first whether the right of entry is legal in character or equitable, using these adjectives in the technical sense in which they are used in the 1925 property legislation. The question is purely one of statutory definition, the ingredients of which are found in sections 1 and 205 (1) (x) of the Law of Property Act 1925. The contention that the right is legal was not accepted by Burgess V.-C. or advanced in the Court of Appeal below, nor was it contained in the printed case signed by eminent counsel, though if it were upheld it would be decisive of the case. The appellants were, however, permitted to lodge an amended case raising the point. I set out for convenience section 1 (1), (2) and (3) of the Act. The definition section 205 (1) (x) uses the same verbiage and adds nothing to the argument.

"(1) The only estates in land which are capable of subsisting or of being conveyed or created at law are - (a) An estate in fee simple absolute in possession; (b) A term of years absolute. (2) The only interests or charges in or over land which are capable of subsisting or of being conveyed or created at law are - (a) An easement, right, or privilege in or over land for an interest equivalent to an estate in fee simple absolute in possession or a term of years absolute; (b) A rent-charge in possession issuing out of or charged on land being either perpetual or for a term of years absolute; (c) A charge by way of legal mortgage; (d) Land tax, tithe rent-charge, and any other similar charge on land which is not created by an instrument; (e) Rights of entry exercisable over or in respect of a legal term of years absolute, or annexed, for any purpose, to a legal rent charge. (3) All other estates, interests, and charges in or over land take effect as equitable interests."

The right of entry in this case is not contained in a lease, so as to be

annexed to a reversion, nor is it exercisable for a term of years, or (comparably with a fee simple) indefinitely. Its duration is limited by a perpetuity period. Whether it can be said to be "exercisable over or in respect of a legal term of years absolute" appears obscure. It is not exercisable for a legal term of years (whether that granted by the lease or any other term): it is not so exercisable as to determine a legal term of years. To say that a right of entry is exercisable in respect of a legal term of years appears to me, with respect, to be without discernible meaning. The effect of this right of entry is to cause a legal term of years to be divested from one person to another upon an event which may occur over a perpetuity period. It would, I think, be contrary to the whole scheme of the Act, which requires the limiting and vesting of legal estates and interests to be by reference to a fee simple or a term of years absolute, to allow this to rank as a legal interest. In my opinion it is clearly equitable.

So I pass, as did the Court of Appeal, to the Land Charges Act 1925. The original contention of the respondents was that the equitable right of entry was capable of registration under Class D (iii) of the Act. In the Court of Appeal an alternative contention was raised, apparently at the court's suggestion, that it might come within Class C (iv). In my opinion this is unmaintainable. Class C (iv) embraces:

"Any contract by an estate owner or by a person entitled at the date of the contract to have a legal estate conveyed to him to convey or create a legal estate, including a contract conferring either expressly or by statutory implication a valid option of purchase, a right of preemption or any other like right (in this Act referred to as 'an estate contract')".

The only words capable of including a right of entry are "any other like right," but, in my opinion, no relevant likeness can be found. An option or right of pre-emption eventuates in a contract for sale at a price; this is inherent in "purchase" and "pre-emption"; the right of entry is penal in character and involves the revisiting of the lease, in the event of default, in a previous owner. There is no similarity in law or fact between these situations.

Class D (iii) reads:

"A charge or obligation affecting land of any of the following kinds, namely:- ... (iii) Any easement right or privilege over or affecting land created or arising after the commencement of this Act, and being merely an equitable interest (in this Act referred to as an 'equitable easement')."

The argument for inclusion in this class falls into two parts. First it is said that a right of entry falls fairly within the description, or at least that, if the words do not appear to include it, they are sufficiently open in meaning to admit it. Secondly it is said that the provisions of the Law of Property Act as to "overreaching" compel the conclusion that a right of entry must fall under some class or sub-class of the Land Charges Act, and since this is the only one whose words can admit it, they should be so interpreted as to do so. Thus the argument depends for its success upon a combination of ambiguity, or openness of Class D (iii) with compelling consideration brought

about in the overreaching provisions. In my opinion it fails under both limbs: Class D (iii) cannot be interpreted so as to admit equitable rights of entry, and no conclusive, compelling, or even clear conclusions can be drawn from the overreaching provisions which can influence the interpretation of Class D (iii).

Dealing with Class D (iii), I reject at once the suggestion that any help (by way of enlarging the content of this class) can be derived either from the introductory words, for they limit themselves to the "following kinds," or from the words "and being merely an equitable interest," for these are limiting, not enlarging, words. I leave out of account the label at the end - though I should think it surprising if so expert a draftsman had attached that particular label if the class included a right of entry. To include a right of entry in the description of "equitable easement" offends a sense both of elegance and accuracy. That leaves "easement right or privilege over or affecting land." If this were the only place where the expression occurred in this legislation, I should find it difficult to attribute to "right" a meaning so different in quality from easement and privilege as to include a right of entry. The difference between a right to use or draw profit from another man's land, and a right to take his land altogether away, is one of quality, not of degree. But the words are plentifully used both in the Law of Property Act and elsewhere in the 1925 legislation, so are the words "rights of entry," and I find it impossible to believe that in this one context the one includes the other. The two expressions are even used by way of what seems deliberate contrast in two contexts: first in section 1 of the Law of Property Act, where subsection (2) (a) mentions "An easement, right, or privilege in or over land" and paragraph (e) of the same subsection "Rights of entry": secondly, in section 162 (1) (d) which mentions both. An argument, unattractive but perhaps just palatable, can be devised why it might have been necessary in section 1 of the Law of Property Act to mention both easements, rights or privileges and the particular rights of entry described in subsection (2) (e), but no explanation can be given why, if the latter are capable of being included in the former, they should be mentioned with such a degree of separation. I do not further elaborate this point because a reading of their judgments leaves little doubt that the Lords Justices would themselves have read Class D (iii) as I can only read it but for the influence of the overreaching argument.

So I turn to the latter. This, in my opinion, only becomes compelling if one first accepts the conclusion that all equitable claims relating to land are either registrable under the Land Charges Act, or capable of being overreached under section 2 of the Law of Property Act; i.e., are capable by use of the appropriate mechanism of being transferred to the proceeds of sale of the land they affect. If this dilemma could be made good, then there could be an argument for forcing, within the limits of the possible, an equitable right of entry into one of the registrable classes, since it is obviously not suitable for overreaching. But the dilemma cannot be made good. What may be overreached is "any equitable interest or power affecting that estate": yet "equitable interest" (for powers do not enter into the debate) is a word of most uncertain content. The searcher after a definition has to be satisfied with section 1 (8) "Estates, interests, and charges in or over land which are not legal estates are in this Act referred

to as 'equitable interests'" - a tautology rather than a definition. There is certainly nothing exhaustive about the expression "equitable interests" - just as certainly it has no clear boundaries. The debate whether such rights as equity, over the centuries, has conferred against the holder of the legal estate are truly proprietary in character, or merely rights in personam, or a hybrid between the two, may have lost some of its vitality in the statutory context but I the question inevitably rises to mind whether the "curtain" or "overreaching" provisions of the 1925 legislation extend to what are still conveniently called "equities" or "mere equities," such as rights to rectification, or to set aside a conveyance. There is good authority, which I do not presume to doubt, for a sharp distinction between the two - I instance Lord Upjohn in National Provincial Bank Ltd. v. Hastings Car Mart Ltd. [1965] A.C. 1175, 1238 and Snell's Principles of Equity, 25th ed. (1960) p. 38. I am impressed by the decision in E. R. Ives Investment Ltd. v. High [1967] 2 Q.B. 379 in which the Court of Appeal held that a right by estoppel - producing an effect similar to an easements not registrable under Class D (iii). Lord Denning M.R. referred to the right as subsisting only in equity. Danckwerts L.J. thought it was an equity created by estoppel or a proprietary estoppel: plainly this was not an equitable interest capable of being overreached, yet no member of the court considered that the right - so like an easement - could be brought within Class D (iii). The conclusion followed, and the court accepted it, that whether it was binding on a purchaser depended on notice. All this seems to show that there may well be rights, of an equitable character, outside the provisions as to registration and which are incapable of being overreached.

That equitable rights of entry should be among them is not in principle unacceptable. First, rights of entry, before 1925, were not considered to confer an interest in the land. They were described as bare possibilities (Challis's Real Property, 3rd ed. (1911), p. 76) so that it is not anomalous that equitable rights of entry should not be treated as equitable interests Secondly, it is important that section 10 of the Land Charges Act 1925 should be given a plain and ordinary interpretation. It is a section which involves day to day operation by solicitors doing convincing work: they should be able to take decisions and advise their clients upon a straightforward interpretation of the registration classes, not upon one depending upon a sophisticated, not to say disputable, analysis of other statutes. Thirdly, the consequence of equitable rights of entry not being registrable is that they are subject to the doctrine of notice, preserved by section 199 of the Law of Property Act. This may not give complete protection, but neither is it demonstrable that it is likely to be less effective than the present system of registration against names. I am therefore of opinion that Class D (iii) should be given its plain prima facie meaning and that so read it does not comprise equitable rights of entry. It follows that non-registration does not make the appellants' right unenforceable in this case.

The consequence is that the appellants' claim to re-enter must succeed unless the respondent can and should be relieved in equity against the appellants' legal right. This involves two questions: first, in law, whether a court exercising equity jurisdiction does relieve against forfeiture in a case such as the present, viz. in a case of breaches of condition as to fencing, support, or blocking of openings, and bearing in mind the relationship of

the parties; secondly, the question whether the court ought to relieve the respondent in the circumstances.

There cannot be any doubt that from the earliest times courts of equity have asserted the right to relieve against the forfeiture of property. The jurisdiction has not been confined to any particular type of case. The commonest instances concerned mortgages, giving rise to the equity of redemption, and leases, which commonly contained re-entry clauses; but other instances are found in relation to copy holds, or where the forfeiture was in the nature of a penalty. Although the principle is well established, there has undoubtedly been some fluctuation of authority as to the self-limitation to be imposed or accepted on this power. There has not been much difficulty as regards two heads of jurisdiction. First, where it is possible to state that the object of the transaction and of the insertion of the right to forfeit is essentially to secure the payment of money, equity has been willing to relieve on terms that the payment is made with interest, if appropriate, and also costs (Peachy v. Duke of Somerset (1721) 1 Stra. 447 and cases there cited). Yet even this head of relief has not been uncontested: Lord Eldon L.C. in his well-known judgment in Hill v. Barclay (1811) 18 Ves.Jun. 56 expressed his suspicion of it as a valid principle, pointing out, in an argument which surely has much force, that there may be cases where to oblige acceptance of a stipulated sum of money even with interest, at a date when receipt had lost its usefulness, might represent an unjust variation of what had been contracted for: see also Reynolds v. Pitt (1812) 19 Ves.Jun. 140. Secondly, there were the heads of fraud, accident, mistake or surprise, always a ground for equity's intervention, the inclusion of which entailed the exclusion of mere inadvertence and a fortiori of wilful defaults.

Outside of these there remained a debatable area in which were included obligations in leases such as to repair and analogous obligations concerning the condition of property, and covenants to insure or not to assign. As to covenants to repair and cases of waste, cases can be quoted before the 19th century in which relief was granted: see Webber v. Smith (1689) 2 Vern. 103 and Nash v. Earl of Derby (1705) 2 Vern. 537. There were hostile pronouncements. In Wadman v. Calcroft (1804) 10 Ves.Jun. 67 both Sir William Grant M.R. and Lord Eldon L.C. are found stating it to be clear that relief cannot be given against the breach of other covenants - i.e. than covenants to pay rent.

It was soon after that the critical divide or supposed divide occurred, between the liberal view of Lord Erskine L.C. in Sanders v. Pope (1806) 12 Ves.Jun. 282 and the strict view of Lord Eldon L.C. in Hill v. Barclay. The latter case came to be followed as the true canon; the former was poorly regarded in Lincoln's Inn, but it is important to observe where the difference lay. This was not, as I understand it, in any disagreement as to the field in which relief might be granted, for both cases seem to have accepted that, in principle, relief from forfeiture might be granted when the covenant was to lay out a sum of money on property: but rather on whether equity would relieve against a wilful breach. The breach in Sanders v. Pope was of this kind but Lord Erskine L.C. said, at p. 293:

"If the covenant is broken with the consciousness, that it is broken, that is, if it is wilful, not by surprise, accident, or ignorance, still if it is

a case, where full compensation can be made, these authorities say, not that it is imperative upon the court to give the relief, but that there is a discretion."

To this Lord Eldon L.C. answers, 18 Ves.Jun. 56, 63:

"... with regard to other cases," (sc. waste or omitting repairs) "the doctrine I have repeatedly stated is all wrong, if it is to be taken, that relief is to be given in case of a wilful breach of covenant."

The emphasis here, and the root of disagreement, clearly relates to wilful breaches, and on this it is still Lord Eldon L.C.'s view which holds the field.

The suggestion that relief could not be granted against forfeiture for breach of other covenants was not one that followed from either case: relief was so granted in Bargent v. Thomson (1864) 4 Giff. 473. Equally in Barrow v. Isaacs & Son [1891] 1 Q.B. 417, a case of a covenant against under letting without consent, a high water mark of the strict doctrine, the emphasis is not so much on the nature of the breach which may or may not be relieved against, bait on the argument that it is enough to show that compensation can be given:

"... it was soon recognised that there would be great difficulty in estimating the proper amount of compensation; and, since the decision of Lord Eldon L.C. in Hill v. Barclay it has always been held that equity would not relieve, merely on the ground that it could give compensation, upon breach of any covenant in a lease except the covenant for payment or rent" (per Kay L.J., at p. 425).

We are not bound by these decisions, certainly not by every shade of opinion they may reflect, but I am entirely willing to follow them in their main lines.

As regards the present appeal it is possible to disengage the following considerations. In the first place there should be put on one side cases where the court has been asked to relieve against conditions cantoned in wills or gifts inter vivace. These raise considerations of a different kind from those relevant to contractual stipulations. Secondly, no decision in the present case involves the establishment or recognition directly or by implication of any general power - that is to say, apart from the special heads of fraud, accident, mistake or surprise in courts exercising equitable jurisdiction to relieve against men's bargains. Lord Eldon L.C.'s firm denial of any such power in Hill v. Barclay does not call for any revision or review in this case. Equally there is no need to qualify Kay L.J.'s proposition in Barrow v. Isaacs & Son (cited above). I would fully endorse this: it remains true today that equity expects men to carry out their bargains and will not let them buy their way out by uncovenanted payment. But it is consistent with these principles that we should reaffirm the right of courts of equity in appropriate and limited cases to relieve against forfeiture for breach of covenant or condition where the primary object of the bargain is to secure a stated result which can effectively be attained when the matter comes before the court, and where the forfeiture provision is added by way of security for the production of that result. The word "appropriate" involves consideration of the conduct of the applicant for relief, in particular whether his default was wilful, of the gravity of the breaches, and of the disparity

between the value of the property of which forfeiture is claimed as compared with the damage caused by the breach.

Both as a matter of history and by the nature of things, different considerations apply to different covenants. As regards covenants to pay rent, in spite of Lord Eldon L.C.'s reservations, the matter has, subject to qualifications which need not be discussed, been taken over by statute, first by 4 Geo. 2 c. 28 then by later Acts leading up to the Law of Property Act 1925. The same is true of covenants to insure and other covenants in leases. I shall consider shortly the implications of the legislation as regards other covenants than those expressly mentioned. As regards covenants to repair and analogous covenants concerning the condition of property, other than those now dealt with by Act of Parliament, it is not necessary to overrule Hill v. Barclay any more than it was necessary for Lord Eldon L.C. to do more than to distinguish Sanders v. Pope. Lord Eldon L.C.'s decision was in fact based partly upon the circumstance that he was concerned with a wilful default and partly upon the impossibility of speculating whether the later doing of the repairs would compensate the landlord: such considerations remain relevant. Where it is necessary, and, in my opinion, right, to move away from some 19th century authorities, is to reject as a reason against granting relief, the impossibility for the courts to supervise the doing of work. The fact is a reality, no doubt, and explains why specific performance cannot be granted of agreements to this effect but in the present context it can now be seen (as it was seen by Lord Erskine L.C. in Sanders v. Pope) to be an irrelevance: for what the court has to do is to satisfy itself, ex post facto, that the covenanted work has been done, and it has ample machinery, through certificates, or by enquiry, to do precisely this. This removes much of the support from one of the more formidable authorities, viz.: the majority judgment in Bracebridge v. Buckley (1816) 2 Price 200.

There remain two other arguments which cannot be passed over. First it is said that the strict view (that there should be no relief except under the two classical headings) has been endorsed in this House in Hughes v. Metropolitan Railway Co. (1877) 2 App.Cas. 439. There is no substance in this. The basis of decision in this House was that the landlord's notice was suspended in operation by acquiescence, so that there was no effective breach. The opinion invoked is that of Lord Cairns L.C., in which there appears this portion of a sentence, at p. 448:

"it could not be argued, that there was any right of a court of equity, ... to give relief in cases of this kind, by way of mercy, or by way merely of saving property from forfeiture, ..."

- words which have only to be re-read to show that they are no sort of denial of the jurisdiction now invoked.

Secondly, a point of more difficulty arises from the intervention of Parliament in providing specific machinery for the granting of relief against forfeiture of leases: see Law of Property (Amendment) Act 1859 (22 & 23 Vict. c. 35), Common Law Procedure Act 1852, Law of Property Act 1925, Leasehold Property (Repairs) Act 1938 and other statutes. This, it is said, negatives an intention that any corresponding jurisdiction should

exist outside the case of leases. I do not accept this argument. In my opinion where the courts have established a general principle of law or equity, and the legislature steps in with particular legislation in a particular area, it must, unless showing a contrary intention, be taken to have left cases outside that area where they were under the influence of the general law. To suppose otherwise involves the conclusion that an existing jurisdiction has been cut down by implication, by an enactment moreover which is positive in character (for it amplifies the jurisdiction in cases of leases) rather than negative. That legislation did not have this effect was the view of Kay L.J. in Barrow v. Isaacs & Son [1891] 1 Q.B. 417, 430, when he held that covenants against assigning - excluded from the Conveyancing Act 1881 - were left to be dealt with according to the ordinary law. The Occupiers' Liability Act 1957 gave rise to a similar problem since it legislated as to one part of a larger total field, I may perhaps refer to what I said in Herrington v. British Railways Board [1972] A.C. 877.

The present case, in my opinion, falls within the class of case in which it would be possible for a court of equity to intervene. When the appellants assigned a portion of their leased property, retaining the rest, which adjoined and was supported by the portion assigned, they had an essential interest in securing adequate protection for their buildings, in having the entire site fenced, in preventing unauthorised access through the assigned property. The covenants were drafted accordingly. The power of re-entry was inserted by way of reinforcement of the contractual obligation which it must have been perceived might cease to be enforceable as such. Failures to observe the covenants having occurred, it would be right to consider whether the assignor should be allowed to exercise his legal rights if the essentials of the bargain could be secured and if it was fair and just to prevent him from doing so. It would be necessary, as stated above, to consider the conduct of the assignee, the nature and gravity of the breach, and its relation to the value of the property which might be forfeited. Established and, in my opinion, sound principle requires that wilful breaches should not, or at least should only in exceptional cases, be relieved against, if only for the reason that the assignor should not be compelled to remain in a relation of neighborhood with a person in deliberate breach of his obligations.

In this light should relief have been granted? The respondent's difficulty is that the Vice-Chancellor, who heard the witnesses and went into all the facts, clearly took the view that the case was not one for relief. I should be reluctant, in any event, except on clear conviction to substitute a different view of my own. But I have examined in detail the evidence given, the correspondence over a period of four years, the photographs and plans of the site. All this material establishes a case of clear and wilful breaches of more than one covenant which if individually not serious, were certainly substantial: a case of continuous disregard by the respondent of the appellants' rights over a period of time, coupled with a total lack of evidence as to the respondent's ability speedily and adequately to make good the consequences of his default, and finally a failure to show any such disproportion between the expenditure required and the

value of the interest involved as to amount to a case of hardship. In my opinion the case is not, on established principles, one for relief.

For all these reasons I would allow the appeal.

VISCOUNT DILHORNE. My Lords, I have had the advantage of reading my noble and learned friend Lord Wilberforce's speech. I agree with all he says and that the appeal should be allowed. I only desire to add that the cases in which it is right to give relief against forfeiture where there has been a wilful breach of covenant are likely to be few in number and where the conduct of the person seeking to secure the forfeiture has been wholly unreasonable and of a rapacious and unconscionable character.

LORD PEARSON. My Lords, I have had the advantage of reading the opinion of my noble and learned friend, Lord Wilberforce, and I agree with it and have nothing to add. Accordingly I would allow the appeal.

LORD SIMON OF GLAISDALE. My Lords, I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Wilberforce. As I am in general agreement with it what follows is by way of marginal comment.

In setting himself to answer the fourth main question which he poses, my noble and learned friend deals with the issue whether the right of reentry is legal or equitable. My agreement with his conclusion that the right is equitable does not imply that I think that if the right of re-entry had been for a defined or indefinite term - not merely limited by reference to the uncertain perpetuity period - the right would have been legal and not equitable.

With reference to the fifth question - whether this is a case where a court of equity might grant relief against exercise of the right of entry - I agree that Sanders v. Pope (1806) 12 Ves.Jun. 282 and Hill v. Barclay (1811) 18 Ves.Jun. 56 are not in themselves inconsistent authorities; nevertheless, they seem to me to be the respective culminations of a more liberal and a stricter attitude towards equity's jurisdiction to relieve against forfeiture. Lord Eldon L.C.'s inclination, with its emphasis on strict respect for contractual rights and obligations, was more congenial to the following age, and came to be followed. Barrow v. Isaacs & Son [1891] 1 Q B. 417 was a natural consequence; and I am bound to say that it seems to me to demonstrate an abnegation of equity, and to show that the trail from Hill v. Barclay leads into a juristic desert. Since what was said by Lord Cairns L.C. in Hughes v. Metropolitan Railway Co. (1877) 2 App.Cas. 439, 443, was obiter, and merely reflects the acceptance then generally current, none of the authorities binds your Lordships. The last hundred years have seen many examples of relaxation of the stance of regarding contractual rights and obligations as sacrosanct and exclusive of other considerations: though these examples do not compel equity to follow - certainly not to the extent of overturning established authorities - they do at least invite a more liberal and extensively based attitude on the part of courts which are not bound by those authorities. I would therefore myself hold that equity has an unlimited and unfettered jurisdiction to relieve against contractual forfeitures and penalties. What have sometimes been regarded as fetters to the jurisdiction are, in my view,

more properly to be seen as considerations which the court will weigh in deciding how to exercise an unfettered jurisdiction (cf. Blunt v. Blunt [1943] A.C. 517; Kara v. Kara and Holman [1948] P. 287, 292). Prominent but not exclusive among such considerations is the desirability that contractual promises should be observed and contractual rights respected, and even more the undesirability of the law appearing to condone flagrant and contemptuous disregard of obligations. Other such considerations are how far it is reasonable to require a party who is prima facie entitled to invoke a forfeiture or penalty clause to accept alternative relief (e.g., money payment or re-instatement of premises) and how far vindication of contractual rights would be grossly excessive and harsh having regard to the damage done to the primacy and the moral culpability of the promiser. (I do not intend this as an exhaustive list.) It is these internal considerations which may limit the cases where courts of equity will relieve against forfeiture, rather than any external confine on jurisdiction.

Lastly, there being, in my judgment, jurisdiction to relieve against re-entry in the present case, how should it be exercised? The learned Vice-Chancellor, himself holding that he had jurisdiction to relieve, addressed himself to the question whether it would be right to exercise it in favour of the instant respondent, and held that it would not be. This is a discretionary jurisdiction. The proper attitude of an appellate court to the review of a discretionary jurisdiction has frequently been stated. Perhaps the locus classic us is the speech of Viscount Simon L.C. in Blunt v. Blunt [1943] A.C. 517, in which the rest of the House concurred. He was speaking of the exercise of the Divorce Court's discretion under section 4 of the Matrimonial Causes Act 1937; but his invocation of a widely different discretionary jurisdiction shows that his observations were of general application. He said, at pp. 526 - 527:

"This brings me to a consideration of the circumstances in which an appeal may be successfully brought against the exercise of the divorce court's discretion. If it can be shown that the court acted under a misapprehension of fact in that it either gave weight to irrelevant or unproved matters or omitted to take into account matters that are relevant, there would, in my opinion, be ground for an appeal. In such a case the exercise of discretion might be impeached, because the court's discretion will have been exercised on wrong or inadequate materials, but, as was recently pointed out in this House in another connection in Charles Osenton v. Johnston [1942] A.C. 130, 138: 'The appellate tribunal is not at liberty merely to substitute its own exercise of discretion for the discretion already exercised by the judge. In other words, appellate authorities ought not to reverse the order merely because they would themselves have exercised the original discretion, had it attached to them, in a different way. But if the appellate tribunal reaches the clear conclusion that there has been a wrongful exercise of discretion in that no weight, or no sufficient weight, has been given to relevant considerations ... then the reversal of the order on appeal may be justified.' Osenton's case was one in which the discretion being exercised was that of deciding whether an action should be tried by an official referee, and the material for forming a conclusion was entirely documentary and

was thus equally available to the appellate court. The reason for not interfering, save in the most extreme cases, with the judge's decision under section 4 of the Matrimonial Causes Act 1937 is of a far stronger character, for the proper exercise of the discretion in such a matter largely depends on the observation of witnesses and on a deduction as to matrimonial relations and future prospects which can best be made at the trial."

Viscount Simon L.C. did not, in my view, intend in any way to suggest that it was enough to justify an appellate court in interfering with the exercise of a discretion that the appellate court would give different weight to the various considerations which the court exercising the jurisdiction must have had in mind: that would be to substitute the appellate court's discretion for that of the court charged with the exercise of the discretion, since it is generally of the essence of a discretionary jurisdiction that there are a number of conflicting considerations to be weighed, to which different minds could reasonably attach different weight. It is only if there has been misdirection (in fact or in law) or if the exercise of the discretion is "plainly wrong" (which means, I think, that no reasonable tribunal could exercise the discretion in such a way) that the appellate court is entitled to interfere.

In the instant case the learned Vice-Chancellor had the advantage, denied to your Lordships, of observing the witnesses; and the impression he formed was obviously influential in his discretionary decision. He had to judge of future prospects, notably the likelihood of the respondent being good for the cost of remedying the defects and the relationship between neighbours if discretion were exercised to relieve against re-entry. Such observations and judgment are, as Viscount Simon L.C. said, best made at the trial. The learned Vice-Chancellor in no way misdirected himself and there was abundant material to justify him in exercising his discretion in the way he did.

I therefore agree that the appeal should be allowed.

LORD KILBRANDON. My Lords, I have had the advantage of seeing in writing the speech which my noble and learned friend, Lord Wilberforce, has delivered. I entirely agree with it, and cannot usefully add anything. I would allow the appeal.

Solicitors: Gregory, Rowcliffe & Co. for John Taylor & Co., Manchester; Collyer-Bristow & Co. for Frederick Howarth, Son & Maitland, Bury.

F. C.