REF/2015/0699
PROPERTY CHAMBER LAND REGISTRATION
FIRST-TIER TRIBUNAL
IN THE MATTER OF A REFERENCE
UNDER THE LAND REGISTRATION ACT 2002

BETWEEN
LESLIE (ASHFORD) LIMITED

APPLICANT
and

MERLION HOUSING ASSOCIATION (2011) LIMITED

RESPONDENT

Property Address: Charter House, Park Street, Ashford TN24 8EH

Title Numbers: K255719
Before: Judge Owen Rhys
Sitting at:  10 Alfred Place London WC1E 7LR
On: 15th April 2016
Applicant representation:	Ms Tiffany Scott instructed by Brecher LLP 
Respondent representation:	Mr Alan Johns QC instructed by Pitmans LLP
	
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D E C I S I O N
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EVENTS LEADING TO THE REFERENCE
1.	On 2nd November 2012 the parties entered into an Agreement for Sale and Purchase (“the Agreement”) relating to leasehold property known as Apartments 1-30, First Floor, Charter House, Park Street, Ashford YN24 8EZ (“the Property”).   Charter House is a large office block, constructed in the 1960s, in the centre of Ashford, Kent, and the Applicant (“LAL”) acquired it in order to redevelop the building from offices into some 232 residential flats and duplexes.  In the Agreement LAL was defined as “the Seller”, the Respondent (“Merlion”) as “the Buyer” and the property subject to the Agreement as “the Flats”, namely flat numbers 1 to 30.  

2.	Under clause 5 of the Agreement completion of the sale was to take place in phases ten working days after service of a notice by LAL confirming that 10 flats in the relevant phase had been “Substantially Completed”.  This term was defined in clause 1.1 to mean “….. completion of all works to the Flats in accordance with the Specification to a standard recognised in the industry to be suitable for occupation and sale;”.  By clause 6.1 of the Agreement LAL contracted to “use all reasonable and proper endeavours within its control to complete the construction of the Flats in good and workmanlike manner and in accordance with the Specification and the terms of the Satisfactory Planning Permission and in compliance with building regulations consent of the local authority……….. and the Seller shall not be responsible for any delay caused by ….. the default of any contractor or supplier … or any other circumstance or any cause beyond the control of the Seller.”

3.	By clause 24.1 of the Agreement it was provided that “If the Buyer has not received notice to complete in accordance with clause 5 hereof prior to the Long Stop Date, either party may terminate this Agreement by giving notice to the other whereupon this Agreement will immediately terminate and neither party will have any further rights or obligations under this Agreement……”   By clause 1.1, the “Long Stop Date” was defined as 30th June 2015.

4.	Clause 20 has the heading “Governing law and Jurisdiction”.  Clause 20.1 provides that the Agreement and any dispute arising out of it shall be governed by and construed in accordance with the law of England and Wales.  Clause 20.2 is in these terms: “The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).”

5.	On 8th November 2012 a Unilateral Notice (“the Unilateral Notice”) was entered in the Charges Register of the Property to protect Merlion’s interest under the Agreement.  “Substantial Completion”, as defined, had not occurred by 30th June 2015, and by letter dated 1st July 2015 (“the Notice of Termination”) LAL purported to terminate the Agreement in accordance with clause 24.1. The Respondent rejected the Notice of Termination and contended that it was of no effect, for reasons which I shall explain.  On 20th July 2015 LAL applied to Land Registry in Form UN4 (“the Application”) to cancel the Unilateral Notice on the grounds that the Agreement had been validly terminated.  By letters dated 6th and 21st August 2015 Merlion objected to the cancellation of the Unilateral Notice.  The grounds of the objection, as explained in the initial letter dated 6th August 2015, were that: “It has now become apparent that the seller has not completed the construction of the flats in a good and workmanlike manner or in compliance with Building Regulations.  This is a breach and culpable wrong on the part of the seller, Leslie (Ashford) Limited."   The letter referred in terms to the case of Extra MSA Services Cobham Limited v Accor UK Economy Hotels Limited [2011] EWHC 755 (Ch) in support of the contention that LAL was not entitled to take advantage of its own breach of contract in order to serve a notice of termination under clause 24.1 of the Agreement.  This fundamental ground of objection was repeated and fleshed out in the subsequent letter of 21st August 2015, Merlion having at this point taken Counsel’s advice.

6.	In accordance with its Rules, Land Registry gave notice to LAL of the objection, and asked LAL to confirm if it wished to proceed with the Application and whether it wished for time to negotiate with the objector.  On 16th September LAL informed Land Registry that it wished to proceed with the Application and did not wish to negotiate.  By letter dated 22nd September 2015 and in accordance with standard practice, Land Registry informed LAL that in view of the unresolved objection, the dispute would be referred to the Land Registration division of the First-tier Property Chamber, pursuant to 73(7) of the Land Registration Act 2002 (“the LRA 2002”).  It also included in the letter its draft Case Summary, described as follows: “The case summary is intended to provide a brief overview of the dispute to enable the Tribunal to decide which party should be named as the applicant and which the respondent in the proceedings before it, as well as to enable it to decide whether it wishes to hold a hearing to determine the matter or refer the case into court.”  The dispute was duly referred to the Tribunal on 13th October 2015.
PROCEEDINGS IN THIS TRIBUNAL
7.	The Tribunal received the referral and accompanying case summary.  On 23rd October 2016 it informed the parties that it had accepted the reference, and designated LAL as Applicant and Merlion as Respondent.  LAL was directed to serve a Statement of Case by 23rd November 2015, and Merlion to respond 28 days thereafter.  LAL’s Statement of Case sets out the bare bones of the Application, reciting the relevant terms of the Agreement as to completion and termination. It concludes, at paragraph 14, as follows:
“It is noted from Merlion’s previous correspondence to the Land Registry that they have disputed the fact that the Agreement has been validly terminated.  I tis not appropriate for LAL to address these arguments until it is clear from Merlion’s Statement of Case whether they intend to pursue any or all of them before the Tribunal, and if so, how Merlion puts its case.  In the event that they do pursue any such argument, LAL will require the right to respond to put LAL’s case. LAL reserves the right to contend that the Tribunal (as opposed to the court) is not the appropriate forum in which any dispute should be decided in light of:
(a)	The nature of the dispute; and/or
(b)	The jurisdiction cause at clause 20.2 of the Agreement….”
Pausing there, I observe that the letters of objection sent by Merlion to Land Registry were attached to the case summary, which was of course served on LAL.  I cannot see how LAL could have been genuinely confused as to the nature of Merlion’s objection, since those letters spell it out with great clarity.  In any event, Merlion’s complaints about LAL’s alleged failure to comply with clause  6.1 – to “use all reasonable and proper endeavours within its control to complete the construction of the Flats in good and workmanlike manner and in accordance with the Specification and the terms of the Satisfactory Planning Permission and in compliance with building regulations consent of the local authority…” had been the subject of detailed correspondence between the parties even before the service of the Notice of Termination.  Although of course LAL could not have known exactly how Merlion’s case would be pleaded, it must have been aware of its broad thrust, namely that LAL was itself in breach of the Agreement and could not use that breach to justify service of the Notice of Termination.  I may also be noted that LAL was not actually objecting to the jurisdiction of the Tribunal or its appropriateness as a forum, but simply reserved its right to do so.
8.	Merlion served its Statement of Case on 21st December 2015.  Unsurprisingly it repeats its contention that LAL was not entitled to serve the Notice of Termination due to its own breach.  The specific breaches of clause 6.1 of the Agreement, which prevented LAL from completing by the Long Stop Date, are set out at paragraphs 8 to 10 of the pleading, and are summarised as “widespread failures to comply with building regulations as to fire measures.”   Merlion relies on various reports by LAL’s own consultants, dated late June and early July 2015, in which they advise LAL that the fire protection and fire stopping works were inadequate and not compliant with the relevant Building Regulations.   In response to paragraph 14 of LAL’s Statement of Case, Merlion contends that LAL’s failure to address the grounds of Merlin’s objection is a deliberate tactic “to delay addressing the question of validity [of the Notice of Termination] in the hope that Merlion will not persist.”  With regard to the reservation of the right to contend that the Tribunal was not the appropriate forum, Merlion responded that this “is consistent with LAL’s strategy of seeking to delay having the question of validity addressed.  The Tribunal should not allow that strategy to succeed and is urged to give directions for the early determination of this question which is needed for commercial certainty.” 

9.	By order dated 13th January 2016, the Tribunal gave case management directions leading to a hearing, and invited the parties to complete listing questionnaires (which has been done).  The timetable required disclosure by 3rd February 216, and exchange of witness statements by 2nd March 2016.  Both parties complied with the disclosure directions, although before me Mr Johns QC for Merlion complained that LAL’s disclosure was inadequate, and many of the documents which it relied upon were obtained from the local authority by Freedom of Information Act requests, rather than directly from LAL.  On 19th February 2016 LAL asked the Tribunal to make a direction, pursuant to section 110 of the LRA 2002 (“section 110”), requiring one of the parties to commence proceedings in court to resolve the matters in dispute.  I shall consider this letter in more detail below. As to witness statements, LAL wrote to the Tribunal on 25th February 2016, relying on the section 110 application, and asking the Tribunal to suspend compliance with the order to serve witness statements until the Tribunal had considered the application.  By order dated 8th March 2016, the Tribunal did suspend the obligation to exchange witness statements, and directed LAL’s application for a section 110 direction to be determined at an oral hearing, which is how the matter came before me.
LAL’S APPLICATION FOR AN ORDER UNDER S.110 OF THE LRA 2002
10.	As I have said, the application for an order under section 110 was made by letter from LAL’s solicitors dated 19th February 2016.  The key passage in the letter reads as follows: “Respectfully, we submit on behalf of the Applicant that the nature of the dispute is such that the Tribunal does not have the jurisdiction to determine this matter, particularly given that the current application has been referred to the Tribunal by the Land Registry as a result of the Applicant’s application to remove the Unilateral Notice referred to above from the freehold title of the property.  Any decision by the Tribunal can therefore only require the Chief Land Registrar to cancel or give effect to that application and not rule upon the validity of the termination of the Sale Agreement…..  We also draw the Tribunal’s attention to clause 20.2 of the Sale Agreement, which provides that “the parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction….”  The letter goes on to reject Merlion’s claim that this was a ploy designed to delay resolution of the dispute, and points to the urgent need to remove the Unilateral Notice “particularly given that the notice’s continued presence is likely to prevent the Applicant from completing on the sale of leasehold interests in the flats to which the Sale Agreement relates.”   

11.	In correspondence, Merlion’s solicitors objected to the application for an order under section 110. They contended that LAL’s view of the Tribunal’s jurisdiction was wrong.  Merlion’s position, as set out in the Skeleton Argument filed by Mr Johns, was that the Tribunal has jurisdiction not only to decide whether or not to give effect to the Application, but also to resolve the underlying dispute between the parties, namely whether the Agreement was validly terminated by LAL.  Indeed, it submits that the Tribunal is obliged to resolve the underlying dispute, which includes a resolution of the matters raised by way of objection.  That is the effect of Silkstone v Tatnall [2011] EWCA 801 at paras 36 and 48.  Mr Johns says this at paragraph 22 of his Skeleton: “No reason is offered as to why the court would be a better forum.  It would not. The Tribunal is well able to decide the question of whether an agreement for lease has been validly terminated.”  With regard to LAL’s reliance on clause 20.2 of the Agreement, he submits that (a) the word “courts” is wide enough to include this Tribunal, and (b) in any event, LAL has already submitted to the Tribunal’s jurisdiction.  I shall consider these arguments in more detail below.

12.	Ms Tiffany Scott appeared for LAL at the hearing before me.  She also filed a Skeleton Argument.  However, the grounds which she put forward in support of LAL’s application were substantially different from those set out in the initial application letter.  In paragraph 4 of the Skeleton she summarised the grounds as follows:
a.	The provisions of clause 20.2 – the jurisdiction clause.
b.	The dispute is wide-ranging and more suitable for determination in the Technology and Construction Court.
c.	LAL wishes to claim damages from Merlion for delaying onward sales of the new flats in the Property, and the Tribunal has no power to award damages.
d.	LAL wishes to seek an undertaking in damages if the Unilateral Notice remains on the register, and the Tribunal cannot require such an undertaking.
e.	LAL intends to bring a claim against its contractor, Barroerock Construction Limited (“Barroerock”) arising out of precisely the same set of facts as are in issue with regard to the validity of the Notice of Termination. The Barroerock claim cannot be dealt with in the Tribunal.
f.	Even if the Tribunal decides the validity of the Notice of Termination, inevitably there will be a further round of litigation in court to determine whether LAL should have damages, or whether Merlion should have specific performance.
I should add that she does accept the central legal premise of Merlion’s case, based on the decision in Extra MSA Services Cobham Limited v Accor UK Economy Hotels Limited, to the effect that LAL would not be entitled to take advantage of its own breach of contract in order to serve a notice of termination under clause 24.1 of the Agreement.  

13.	Although there was no formal evidence before me, Ms Scott was able to provide an explanation of some of the material events that had occurred since the service of the Notice of Termination.  First, LAL has gone into members’ voluntary liquidation, and indeed Ms Scott told me that she was instructed by the liquidator.  Secondly, and as part of this “restructuring”, the freehold of the Property had been transferred to an associated company, Charter House Property 2 Limited (“CHP2”).  Thirdly, LAL’s cause of action (if any) against Barroerock has been assigned to CHP2.  Fourthly, a long leasehold interest has been created and transferred to an associated company of CHP2.  Fifthly, between August and November 2015 LAL – or possibly CHP2 or the liquidator of LHL – entered into fresh agreements for the sale and purchase of 26 of the flats comprised within the Agreement and contracted to be sold to Merlion.  Ms Scott told me, on instructions, that the new sale price of these 26 flats exceeds the sale price under the Agreement.  She also told me that whereas purchasers of 59 flats in the Property had served notices of termination on LAL – pursuant to clause 24.1 – the only sale agreement that had been (purportedly) terminated by LAL had been the Agreement with Merlion.  This is the factual background to the present application
SECTION 110 OF THE LRA 2002
14.	The material part of section 110 of LRA 2002 (as amended) provides as follows:
(1)  In proceedings on a reference under section 73(7), the First-tier Tribunal may, instead of deciding a matter, direct a party to the proceedings to commence proceedings within a specified time in the court for the purpose of obtaining the court’s decision on the matter.

The meaning of “matter” for the purposes of section 73(7) (and therefore section 110) of the LRA 2002 provision received detailed consideration by the Court of Appeal in the case of Silkstone v Tatnall referred to above, from which the following passage (at para.37 in the judgment of Rimer LJ).) is taken:
“The first point is that, in a case like the present, ‘the matter’ referred to the adjudicator was one that required him to decide the underlying merits of the objection. He was not concerned simply to decide whether the Silkstones had an arguable case to a prescriptive right of way over No 3. He was required to decide substantively whether they did have such a right of way. He had, therefore, to consider the merits of their claim and his determination of that question would provide the answer as to whether the objection was or was not well founded. It appears to me obvious from the legislation that the adjudicator’s jurisdiction requires him to decide the underlying substance of the objection on its merits.” 

The application to which objection had been made was an application in Form UN4 to cancel the Silkstones’ Unilateral Notice – precisely the same form of application as in the present case.  The basis of Merlion’s objection is the contention that the Notice of Termination is of no effect and therefore the Agreement remains on foot.  It is quite clear, therefore, that the Tribunal has jurisdiction to decide the underlying substance of Merlion’s objection on its merits.  Indeed, it has the duty to do so.  Although a claimed lack of jurisdiction formed one of the two grounds for LAL’s application for a section 110 order, Ms Scott did not argue this point at all and (subject of course to her other arguments) accepted that the Tribunal did have jurisdiction.

15.	It is a matter for the Tribunal’s discretion whether to make an order under section 110, as the word “may” in sub-section (1) indicates.  As part and parcel of an order under  section 110, it is also necessary to stay the Tribunal proceedings.  There is an express power to stay under Rule 9(3)(m) of the Tribunal Procedure (First-tier Tribunal)(Property Chamber) Rules 2013 (“the Rules”), as well as an automatic stay under Rule 39.  In considering whether to make an order under section 110 the Tribunal will (as Ms Scott accepts in para. 37 of her Skeleton Argument) have regard to the overriding objective, which is in the following terms:
3.—(1) The overriding objective of these Rules is to enable the Tribunal to deal with cases fairly and justly.
(2) Dealing with a case fairly and justly includes—
(a) dealing with the case in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties and of the Tribunal;
(b) avoiding unnecessary formality and seeking flexibility in the proceedings;
(c) ensuring, so far as practicable, that the parties are able to participate fully in the proceedings;
(d) using any special expertise of the Tribunal effectively; and
(e) avoiding delay, so far as compatible with proper consideration of the issues.
(3) The Tribunal must seek to give effect to the overriding objective when it—
(a) exercises any power under these Rules; or
(b) interprets any rule or practice direction.
(4) Parties must—
(a)help the Tribunal to further the overriding objective; and
(b)co-operate with the Tribunal generally.

16.	  Section 110 orders are made routinely in appropriate cases, and the decision depends on a number of factors.  By way of example, if there is a matrimonial element to a beneficial interest dispute, an order might be made to commence proceedings in the family court.  Alternatively, if the issue is at heart a probate or insolvency matter, the Court with the appropriate powers would be considered the proper forum.  The decision whether to make such an order is generally made at the outset of the reference, and usually it is the Land Registry’s Case Summary (as agreed by the parties) which contains the information relevant to that decision. The Tribunal will not make an order without giving the parties an opportunity of making representations under Rule 37 of the Rules.  Against that background, I shall now turn to the specific reasons advanced by LAL as to why the Tribunal should direct the commencement of proceedings in the High Court.  I consider them in the same order that they are set out in Ms Scott’s Skeleton Argument.  

CLAUSE 20.2 OF THE AGREEMENT: EXCLUSIVE JURISDICTION

17.	 I have given the text of this sub-clause in paragraph 5 above.  Ms Scott submits that it means what it says, namely that the parties have agreed that only courts, and not tribunals, should have jurisdiction “to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).”  Ms Scott submits that the normal and natural meaning of the word “court” does not include the office of the Adjudicator to HM Land Registry (the predecessor to this Tribunal).  Furthermore, the parties to the Agreement cannot have intended a dispute as to the termination of the Agreement to be resolved by a tribunal which does not have power to award damages or grant specific performance.  

18.	Mr Johns, in reply, makes a number of points.  First, that the clear purpose behind an exclusive jurisdiction provision such as clause 20 is choose a territorial jurisdiction, and is not directed to the choice of any particular emanation of the State’s dispute resolution apparatus.  He points to Articles 1 and 23 of Council Regulation (EC) No.44/2001 and Articles 1 and 25 of Council Regulation (EC) No.1215/2012, which do not distinguish between court and tribunals in relation to the parties’ choice of jurisdiction.  The relevant consideration is the choice of territory, and no distinction is drawn between courts and tribunals.  Secondly, he submits that the agreement between the parties cannot be conclusive. It is simply a factor to be considered by the Tribunal in deciding whether to hear the dispute or not.  In this connection he cites the case of Donohue v Armco Inc [2001] UKHL 64, and in particular paras. 23 and 24 of the speech of Lord Bingham.  This part of the speech encapsulates the submission:

24. If contracting parties agree to give a particular court exclusive jurisdiction to rule on claims between those parties, and a claim falling within the scope of the agreement is made in proceedings in a forum other than that which the parties have agreed, the English court will ordinarily exercise its discretion (whether by granting a stay of proceedings in England, or by restraining the prosecution of proceedings in the non-contractual forum abroad, or by such other procedural order as is appropriate in the circumstances) to secure compliance with the contractual bargain, unless the party suing in the non-contractual forum (the burden being on him) can show strong reasons for suing in that forum. I use the word “ordinarily” to recognise that where an exercise of discretion is called for there can be no absolute or inflexible rule governing that exercise, and also that a party may lose his claim to equitable relief by dilatoriness or other unconscionable conduct. But the general rule is clear: where parties have bound themselves by an exclusive jurisdiction clause effect should ordinarily be given to that obligation in the absence of strong reasons for departing from it.

19.	Mr Johns submits that clause 20.2, even if it does exclude the jurisdiction of the Tribunal, nevertheless leaves a residual discretion in the Tribunal whether or not to hear the matter, and, for the other reasons set out below, there is no reason to issue a section 110 direction.  Furthermore, he submits that LAL has already submitted to the jurisdiction of the Tribunal.  He refers me, by way of analogy, to section 9 of the Arbitration Act 1996, and to the provisions of Part 11 of the Civil Procedure Rules.  In both cases, a very limited window is allowed within which to take the jurisdiction point.  If a step is taken in the relevant proceedings before the jurisdiction issue is decided, it is too late to challenge the jurisdiction subsequently.  He submits that LAL has chosen the Tribunal to resolve the dispute.  The proper opportunity to challenge jurisdiction was in response to the Land Registry’s notification on 22nd September 2015 that it intended to make a reference to the Tribunal under section 73(7) of the 2002 Act.  Alternatively, and at the very latest, it should have done so in response to the Tribunal’s letter dated 23rd October 2015, in which it informed the parties that it had accepted the reference and gave directions for the service of Statements of Case.

20.	Having considered the arguments put forward by each party, I have concluded that the provisions of clause 20.2 do not, as LAL contends, amount to an agreement to exclude the Tribunal’s jurisdiction.  In my view, the focus of the clause is, as Merlion contends, on territorial jurisdiction, and not on the precise nature of the dispute resolution forum.  It seems unlikely that the parties would have directed their minds to that issue, and I think they will have used the words “courts” in a sense wide enough to include tribunals.  If I am wrong about this, I accept Merlion’s submission to the effect that it is now too late for LAL to rely on this clause as a reason for transferring the dispute to Court.  It is not sufficient, in my judgment, simply to flag up the point in the Statement of Case, but then continue to participate in the tribunal proceedings until a time of its choice.  By analogy with arbitrations and with the CPR, the party seeking to invoke the exclusive jurisdiction clause is bound to seek a ruling at the earliest possible stage, before the parties have incurred costs and delay, and before the Tribunal itself has expended its resources (at the expense of other Tribunal users) on the reference. Clause 20.2 should either have been invoked at the earliest possible stage or abandoned.  It should not have been dangled as a Sword of Damocles over the head of Merlion.  This is not to say that LAL cannot persuade me that the Tribunal should make a section 110 direction on other grounds, but merely that the existence of clause 20.2 is not now a material consideration for the reasons that I have given.

THE CASE IS SUITABLE FOR THE HIGH COURT, ESPECIALLY THE TCC 
21.	This can be broken down into three separate elements, set out at paras. 4(3), (4) and (5) of the Skeleton Argument.  First, LAL wishes to claim damages from Merlion “for delaying onward sales of the Flats to third party purchasers” and the Tribunal has no jurisdiction to award such damages.  Secondly, LAL wishes to obtain an undertaking in damages from Merlion “if the UN1 is to remain on the register pending determination of the issues between the parties.” and the Tribunal cannot order Merlion to provide such an undertaking.  Thirdly, LAL intends to bring a claim against Barroerock arising out of the same facts as are in issue in the dispute between LAL and Merlin, and the Tribunal cannot determine that claim.  I shall consider each of these elements in turn. As a related matter, Ms Scott submits that in correspondence Merlion has raised a number of different allegations regarding LAL’s conduct, and therefore it is not clear to LAL what allegations Merlion intend to pursue before this Tribunal.  She also submits that there are areas of the Merlion’s Statement of Case which appear obscure and clarification is required by means of a further pleading.

22.	As to the first point, I asked Ms Scott to explain the cause of action that would entitle LAL to pursue Merlion in damages for breach of contract.  She submitted that Merlion, by refusing to accept the validity of the Notice of Termination, would be in breach of contract.  On further probing, it seemed to be suggested that there is some sort of implied term to the effect that a party in receipt of a Notice of Termination under clause 24.1 is bound to accept it without challenge, and it is a breach of this implied term that gives rise to the claim in damages.  No authority was provided for this somewhat novel idea, and I doubt that such authority exists.  It might, I suppose, be possible to include a specific provision in the contract preventing any challenge to a purported termination, but in the absence of such a term it must be open to a party to a contract, who challenges a purported termination or rescission by the other party, to have that issue determined by a court or tribunal.  If the parties or indeed an officious bystander were asked if a party who received a notice of termination was bound to accept it, however questionable (on this hypothesis) it may appear to be on the facts, I do not think the answer would be “yes, of course”.  The answer, I suspect, is more likely to be “no, of course not” or some more colourful negative response. In other words, I do not consider that the Agreement could possible include an implied term as suggested.  It follows, therefore, that there is no point in directing LAL to commence proceedings in Court to claim damages where no cause of action exists.

23.	Secondly, LAL contends that the matter should be referred to Court, so that an undertaking in damages may be obtained from Merlion as the price of being allowed to maintain the UN1 pending trial.  When Ms Scott made this submission, I asked her to clarify the basis on which such an undertaking could be required.  As far as I was aware – and indeed as far as Mr Johns was aware – the only basis for awarding damages would be under section 77 of the LRA 2002, which imposes a duty to act with “reasonable cause” in objecting to an application.  I asked Ms Scott whether she was aware of any authorities on the point, bearing in mind the jurisprudence under the 1925 legislation in relation to cautions against dealings.  She did have a case in mind, and (at my request) after the hearing provided a copy of a decision of Morgan J in the Chancery Division, namely Nugent v Nugent [2013] EWHC 4095 (Ch), also reported at [2015] Ch 121, together with some associated cases.  Subsequently, Mr Johns provided his short written responses to the authorities referred to by Ms Scott.  I am grateful to both for their assistance.

24.	 In Nugent v Nugent, Morgan J held that the Court retained an inherent jurisdiction to cancel or vary a unilateral notice entered at Land Registry.  Where the unilateral notice was clearly unsustainable, the court could order the Chief Land Registrar to vacate it.  Where the notice was based on a claim that was well arguable, “the court would approach the exercise of the jurisdiction as if the party entering the notice had applied for an interim injunction pending trial; that, in accordance with that approach, where a unilateral notice protected a claim that was well arguable and the registered proprietor sought an order permitting dealings with the land in order to fund a defence to the underlying claim, the settled principles in relation to permitting access to defence funds under proprietary freezing orders were to be applied…” (see the headnote at [2015] Ch 121).

25.	This case does indeed establish that the court may, in appropriate circumstances, cancel a unilateral notice.  It may also, in appropriate circumstances, treat the maintenance of the unilateral notice as analogous to the obtaining of an interim injunction, thus opening the door to established principles as to the release of funds or property comprised within the freezing order in order to allow the defendant to fund his or her defence to the substantive claim in relation to which the injunction was granted. However, its relevance in the context of the present case is, in my judgment, very limited.  First, because in Merlion’s case the UN1 was entered in order to protect its interest arising under the Agreement, as to which there was never any dispute.  It is LAL which has claimed to terminate the Agreement, and it is that claim that is being challenged.   In the Nugent case the UN1 was entered to protect a claim to proprietary estoppel that had not yet been established and required litigation to trial in order to do so.  It can be readily appreciated that such a form of notice is much more readily analogous to the obtaining of a freezing injunction pending trial, restraining any dealing with the subject property. Secondly, because LAL has, at several different junctures, chosen to proceed with a claim at Land Registry to cancel the UN1.  In the Nugent case, the application to vary the UN1 was made by way of application notice in the proceedings in which the estoppel claim was being made.  By contrast, LAL initiated the process to cancel the UN1 by an application to Land Registry in July 2015, and has not at any stage until February 2016 taken any steps to have the matter dealt with at court.  As matters now stand, the High Court’s jurisdiction has not been invoked and when invoked there can be no certainty that it would accede to LAL’s request for an undertaking in damages. Thirdly, there seems to me to be a world of difference between a decision such as was made in Nugent to allow a defendant to have access to funds generated by a property subject to a UN1, and a requirement that a party in Merlion’s position should be required to give an undertaking – essentially a cross-undertaking – in damages in order to allow it to bring the status of the Notice of Termination before the court.  Fourthly, no evidence has been adduced before me as to the alleged damage suffered by LAL and attributable to the alleged delay in completion. Since the new contracts were made at a time when the UN1 was entered on the register, any purchaser must have accepted the risk that the earlier contract with Merlion, the Agreement, would take priority over their subsequent agreements.  Without sight of the contracts themselves it is difficult to understand how the alleged loss could arise and no particulars of loss have been given. In any event, if a section 110 direction is made, the delay in resolving the dispute and the potential for loss will be far greater than if the matter remained in the Tribunal.  For all these reasons, it follows that the Nugent case does not in my judgment take the matter any further.

26.	The third element of the argument relates to the alleged claim against Barroerock, arising out of the now apparently admitted failure to complete the Flats by the Long Stop Date in accordance with the required standards. The cause of action does not actually lie with LAL, since it has been assigned to CHP2.  On any footing the Tribunal could not make an order under section 110 relating to this claim. However, LAL argues that such a claim ought to be made in concert with proceedings between Merlion and LAL, or perhaps Barroerock could be brought in as a third party or co-defendant to counterclaim or in some similar capacity. When I asked Ms Scott what stage the claim against Barroerock had reached, she told me that her instructing solicitors (presumably also acting for CHP2) were in the process of drafting a letter before action.  This suggests that the Pre-Action Protocol procedures have not been followed, or even started, notwithstanding that any breach will have occurred prior to 30th June 2015, the Agreement was purportedly terminated on 1st July 2015 and Merlion was alleging a failure to comply with clause 6.1 prior to that date. The alleged claim against Barroerock has not even been formulated, and any joinder of Barroerock, even if otherwise justified, would be bound to delay and complicate any proceedings relating solely to the validity of the Notice of Termination.
OTHER REASONS FOR THE SECTION 110 DIRECTION
27.	LAL’s final argument in support of this application is the suggestion that, even if the Tribunal does determine the validity of the Notice of Termination, inevitably there will be the need for further litigation.  If the Notice of Termination was validly served, there will be a claim for damages against Merlion.  If it is invalid, there will be a claim by Merlion for specific performance of the Agreement.  According to Ms Scott, it is very important that the same judge who rules on the validity of the notice should also deal with those other issues.  I have already explained my scepticism as to the existence of any cause of action against Merlion arising out of its desire to challenge the Notice of Termination.  If the Agreement is held to remain on foot, however, it may well be that Merlion will have to sue for specific performance.  There may be equitable defences to that remedy, although none has been suggested.  Whether there are or not, I cannot see why it is necessary for the same judge to deal with such a claim.  Indeed, many straightforward claims for specific performance are dealt with on a summary basis under CPR Part 24.
MERLION’S SUBMISSIONS
28.	I have already outlined some of the submissions of Mr Johns QC, on behalf of Merlion, in opposition to LAL’s application for an order under section 110.  The broad thrust of these submissions is that the issue between the parties in these proceedings, namely the validity or otherwise of the Notice of Termination, can and should be dealt with in the proceedings before the Tribunal.  These may be summarised as follows:
a.	LAL made the initial choice to remove Merlion’s UN1 by means of an application to Land Registry, rather than by issuing proceedings in court for a declaration that the Notice of Termination was valid.
b.	It affirmed that choice on at least two occasions – namely, when Land Registry informed the parties that it was intending to refer the dispute to the Tribunal and when the Tribunal initially accepted the reference and directed Statements of Case.
c.	LAL waited until 19th February 2016 – after the disclosure stage and at a time when service of witness statements was imminent – to make the application for a section 110 order.
d.	Notwithstanding that Merlion’s case was made clear in correspondence both prior to and at the time of the service of the Notice of Termination, and in its subsequent objection to LAL’s UN4, LAL has failed to engage with it in its Statement of Case.
e.	A direction under section 110 – requiring LAL to seek a declaration as to the validity of the Notice of Termination – would inevitably cause delay and expense which could be entirely avoided if the dispute remained in the Tribunal.
f.	The application for a section 110 direction is one further example of a consistent strategy by LAL to delay and obfuscate matters in order to deter Merlion, a Housing Association with limited resources, from asserting its rights under the Agreement.  The suggestion that other parties and claims will have to be joined into the dispute between LAL and Merlion is a new suggestion, raised for the first time in Ms Scott’s Skeleton Argument, and did not form any part of the section 110 application as formulated in February 2016.
g.	LAL’s protestations that it wishes to have the matter resolved speedily are contradicted by its conduct in the litigation and by this application. 
h.	The issue before the Tribunal is one which the Tribunal is able to decide, and once LAL’s witness statements are served all necessary material will be before the Tribunal.  The case is ready for hearing in all respects.  
i.	Merlion accepts that its case before the Tribunal must be limited to the facts and matters pleaded in its Statement of Case.  The issue for the Tribunal will be determined on that basis.  
j.	The overriding objective is best served by retaining the dispute within the Tribunal.

CONCLUSIONS
29.	Having carefully considered the submissions of both parties, I have come to the view that this dispute should not be referred to court under section 110 but should be resolved in the Tribunal. My principal reasons (in no particular order of importance) are as follows, and I also rely on the specific points made above when discussing Ms Scott’s various submissions:
a.	As previously explained, I consider that it is too late for LAL to raise the jurisdiction argument under clause 20.2.
b.	I am not persuaded that there is any real danger of inconsistent decisions being made by this Tribunal and by the court in any subsequent litigation.  The central dispute is between LAL and Merlion and relates to the validity of the Notice of Termination which this Tribunal can resolve.  If other claims flow from that decision then the court can deal with those as it sees fit.
c.	The other associated claims suggested by LAL are not, on analysis, realistic claims.  In any event, they are nowhere near to being properly formulated, or even explained by means of draft pleadings or letters before action, which in my judgment casts some doubt on their genuineness other than as pieces in a tactical game of chess.
d.	In any event, and even taking LAL’s arguments at face value, I consider that the actual harm that would be done by staying the Tribunal proceedings and requiring a new claim to be issued in court, far outweighs any putative harm that might occur by retaining the dispute in the Tribunal.  Even with maximum co-operation and expedition on both sides, and given the estimated length of trial, it is inconceivable that the dispute as to the Notice of Termination could be resolved by the High Court before a date well into 2017.  I cannot see how that can possibly serve the interests of either party.
e.	Furthermore, the costs incurred to date will be largely wasted.  Of course there will be some duplication, but if it necessary to start a High Court claim from scratch, with numerous other parties and issues involved, inevitably much of the work done to date will be rendered redundant and substantial additional costs will be incurred.
f.	I consider that the overriding objective is best served by refusing the application to make a Section 110 direction, in particular the following elements of the overriding objective:
(a)	dealing with the case in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties and of the Tribunal;
(e) avoiding delay, so far as compatible with proper consideration of the issues.
g.	The proceedings in this Tribunal are largely ready for trial.  The only outstanding procedural step is the exchange of witness statements, originally directed to be due at the beginning of March 2016.  This case can be listed for hearing in mid-June 2016, on dates stated to be convenient to the parties in their LRHRG questionnaires.

30.	I shall therefore refuse LAL’s application for a direction under section 110 of the LRA 2002, and give the additional directions which are set out in the accompanying order.  I have not heard the parties on the question of costs, but I am minded to order LAL to pay Merlion’s costs of the application to be summarily assessed on the standard basis, and I have given certain directions in that respect.  

Dated this 19th day of April 2016

BY ORDER OF THE TRIBUNAL