Untangling complex issues of property registered to a dissolved Ltd Company

Paul represented the Applicant (Mr A), in a claim that a leasehold interest in a property should be extinguished, so that the flat, registered as owned by a Limited Company, should revert to the Freeholder (Mr A).

The flat in question had been purchased at auction by Mr X, on behalf of Company Y Ltd.

Mr X claimed that he had paid the deposit from his own funds. Although the balance of the purchase monies was apparently paid by Mr X, receipts showed the money came from another limited Company he ran, Company Z Ltd.

To further complicate matters, although the property was registered in the name of Y Ltd, Y Ltd had been dissolved some weeks prior to the registration.

Mr X continued to ‘manage’ (i.e. collect the rent for) the flat, and some years later the Treasury Solicitor (who deal with the property of dissolved companies) issued a Notice of Disclaimer (under Section 656 Companies Act 1985) formally extinguishing Company Y’s leasehold interest in the property.

Paul’s client, Mr A, now claimed the flat on the basis that the Lease had been extinguished so, as a matter of law, the Flat reverted to the freeholder.

The Judge in the Property Chamber found that (even though he rejected most of Mr X’s account) the property’s registration in the name of Company Y Ltd was a nullity. Since the company did not exist at the time of registration, Company Y Ltd did not have any interest for the Treasury Solicitor to extinguish.

Further litigation will now be required to determine what, if any, interest Mr X, Y Ltd and/or Z Ltd (now also dissolved) have, or had, in the flat!

Meanwhile Mr X is still collecting the rent for the flat.