Lease assignment without prior consent may be regularised by ex post facto permission, with compensation shared between parties.

A lease restricting assignment without the lessor's prior consent made an unapproved transfer legally defective, because the Official Liquidator could not convey better title than the company in liquidation and a purchaser was expected to enquire into title. The Court nevertheless treated the completed sale as capable of regularisation rather than being set aside, holding that ex post facto permission could validate the transaction. The compensation demanded for clearing the title and granting consent was to be shared equally between the Official Liquidator and the purchaser, reflecting their shared responsibility for the defective transfer.

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Issues: (i) Whether the lessee's leasehold interest could validly be assigned without the lessor's prior permission and whether the subsequent conveyance was liable to be set aside. (ii) Whether the lessor's ex post facto permission could be regularised on payment of compensation, and if so, how the burden of such compensation was to be borne.

Issue (i): Whether the lessee's leasehold interest could validly be assigned without the lessor's prior permission and whether the subsequent conveyance was liable to be set aside.

Analysis: The lease contained an express restriction against assignment without the lessor's previous consent and approval. The Official Liquidator could not confer a better title than the company in liquidation possessed. A purchaser was also expected to make due enquiry, and the absence of express prior permission meant that the transfer was legally defective. However, since the sale had already been confirmed and the purchaser had acted upon it, the Court treated the defect as capable of being regularised rather than unsettling the transaction entirely.

Conclusion: The assignment could not have been treated as valid without the lessor's permission, but the transaction was not undone and was instead left to be regularised by ex post facto permission.

Issue (ii): Whether the lessor's ex post facto permission could be regularised on payment of compensation, and if so, how the burden of such compensation was to be borne.

Analysis: The Court held that ex post facto permission could validate the transaction, and that the amount demanded by the lessor represented the price for clearing the title and granting permission. Since both the Official Liquidator and the purchaser were at fault in the manner in which the sale and title were presented, it was unjust to cast the entire burden on either side alone. The lowest contemporaneous demand was taken as the proper basis for compensation, and the amount was treated as an expense of winding up to the extent payable by the Official Liquidator.

Conclusion: The compensation was to be shared equally between the Official Liquidator and the purchaser, and upon payment the lessor was to accord ex post facto permission.

Final Conclusion: The Court regularised the assignment rather than setting it aside, directed shared payment of compensation for the lessor's consent, and disposed of both applications without costs.

Ratio Decidendi: Where a lease prohibits assignment without the lessor's prior consent, a transfer made without such consent is legally defective, but a concluded transaction may be regularised by ex post facto permission on equitable terms, with the financial burden allocated according to the parties' respective responsibility for the defective transfer.

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