Legal update

Citation

Waterson, G. (2003), "Legal update", Property Management, Vol. 21 No. 4. https://doi.org/10.1108/pm.2003.11321dab.001

Legal update

Easements

There seem to have been quite a number of cases involving easements which have been decided over the past few months, several indeed involving what might really be regarded as among the more esoteric aspects of this subject.

Repairs and improvements: landlord's right of entry

Yeoman's Row Management Ltd [2002] 34 EG 84

Mulvaney v. Gough [2002] 44 EG 175

This case involved the primary question of whether the rights claimed were capable of existing as an easement, and the secondary question of whether, if so, the appellants had interfered with the enjoyment of the easement by the respondent. The land in question (referred to as "the blue land") comprised land to the side and rear of a small terrace or group of cottages, each of which had originally been let to tenants by the then owner of the whole terrace. After his death in 1950, the individual cottages were sold off one by one to individual purchasers. At the time of each such sale each purchaser had been granted a right of way "at all times and for all purposes" over the blue land, together in one case with the express right to use the blue land "for [clothes] drying purposes" and in another together with "the joint use of the yard" for purposes unspecified, but the precise wording of the grants would appear not to have been intended to have had any particular significance: the words of the many witness statements provided for the court, said Judge Ashton at first instance:

• •

  … testify not only to a "communal" yard on "the blue land" but also to happy relationships between all residents. I am satisfied he went on, that over the decades and certainly [in the years] predating these sales, the entirety of the yard was used by the residents as amenity and garden land on a shared basis. That would have been the intention when the cottages were built in the 19th. Century and the way it was occupied when in common ownership. Nothing appears to have been done when [each of the individual] cottages [was] sold off to prevent this long-established regime from continuing and no distinction appears to have been made [in any of the conveyances concerned] as regards any part of [the blue land]. The evidence shows certain "ground rules" or understandings grew out of the need to avoid anarchy and this included provision of washing lines, space for dustbins and allocation of small flower beds so that the yard would resemble a domestic garden and be more attractive as an amenity enjoyed by all … I am satisfied that these communal rights have been acquired by prescription over the "blue land" [both] by the respondent and [by] those [other] property owners to whom express rights as joint user were not [expressly] granted …

As regards the primary question, therefore, of whether or not the respondent could assert a claim to enjoy such communal rights as an easement, the judge at first instance went on to say that, regardless of the wording use in each of the individual conveyances, he was satisfied that each of the owners or occupiers of the cottages concerned had acquired similar communal rights over the "blue land" by long user or prescription.

However, the dispute had arisen in the first place because one of the cottagers, the appellant, had in 1996 carried out some works to the side accessway which formed part of the blue land, in order to provide access to some other land to the north and to the east of the group of cottages: in short, the appellant had removed the existing grass surface of the side accessway with a JCB, intending to resurface it with gravel, and in the process had also removed one of the flower beds which was tended by the respondent as her own...Hence the secondary question, as to whether the appellant by these acts had interfered with the respondent's easement: Yes, said the judge, but this being as it would seem, a neighbour dispute, of course it went to appeal!

On appeal, in the Court of Appeal, with only minor variations, the decision of Judge Ashton was upheld, as was his award of damages of 200 to the respondent.

Brandwood v. Bakewell Management Ltd [2003] 06 EG 146 (CS); [2003] 09 EG 198

In this case the issue also turned on the question of whether or not an easement (in this case a vehicular right of way) had been acquired by prescription. Briefly, the appellants were the owners of a number of houses built on plots of land which abutted on Newtown Common, an area of common land in the vicinity of Newbury in Berkshire. For many years the owners of these various properties had obtained vehicular access to their individual properties by driving their vehicles from the nearby public highway across the common. Section 193 of the Law of Property Act provides that the public has right of access "for air or exercise" to common land which is situated within the area of what (prior to the 1974 local government reforms) had been a borough or urban district. This right is qualified (inter alia) by a restriction in s.193(1)(c) on the use of vehicles and it is further provided in effect by s.193(1)(4) that anyone who transgresses against this provision will be liable on summary conviction to payment of a fine. The question therefore arose as to whether the owners of the properties in question had been able to acquire their variously claimed vehicular access rights by prescription.

"No", said the Court of Appeal: previous legal authority made it clear, and the demands of public policy required, that no-one should be able to profit from their own unlawful act: since a claim of an easement arising by long-user or prescription required that the user had been exercised without the permission of the landowner of the land over which the right was claimed without his consent, it followed therefore that the use of the common as a means of vehicular access had always been unlawful; accordingly, none of the appellants had been able in law to acquire easements of way by prescription. "QED", as they might say in non-legal circles …

For another similar case, with a not entirely dissimilar outcome, see also: Massey v. Boulden [2003] 11 EG 154, though note that in this case it was also held (the point had not been argued in Brandwood v. Bakewell Management Ltd.) that the respondents would now be entitled to insist on the grant of appropriate rights of access under the provisions of s.68 of the Countryside and Rights of Way Act 2000 and the Vehicular Access Across Common and Other Land (England) Regulations 2002, which had come into effect with effect from 3rd July 2002.

Mortgages

Smith v. Spaull [2003] 03 EG 125 (CS); [2003] 17 EG 14

Both the facts which gave rise to this dispute, and the review of the relevant cases conducted in the Court of Appeal are moderately complicated. To simplify slightly, therefore, the case turned on the question of whether a mortgagee in possession, who had repossessed the leasehold property in question on default by the mortgagor, was entitled to the protection of the Leasehold Property (Repairs) Act 1938 where the lessor had served a s.146 notice on the lessee, so that the mortgagee in possession was entitled to serve a counter-notice on the lessor under the 1938 Act.

After a fairly exhaustive review of the relevant authorities, the Court of Appeal held that it was not: the provisions both of s. 146 of the Law of Property Act 1925 had been interpreted as being designed to protect the lessee in possession; the mortgagee in possession was effectively a sub-lessee in possession, whether the mortgage was by way of sub-demise or by way of legal charge and thus until forfeiture the original contractual relationship between the lessor and the lessee was unaffected by the creation of the mortgage; moreover, the mortgagee was already adequately protected both by the provisions of s.146(4) which gave it the right to apply to the court for an order vesting the lease in itself, and by the further provisions whereby as sub-lessee it was entitled to apply to the court for relief from forfeiture on terms; the mortgagee in possession, in the view of the Court of Appeal, did not require any further protection than this, and therefore was not entitled to serve a counter-notice on the lessor under the 1938 Act.

Rating

Cinderella Rockerfellas Ltd v. Rudd [2003] 17 EG 47 (CS)

The question at issue in this case was a relatively straightforward one, namely, whether a former car ferry now converted for use as a nightclub was rateable. The appellants held a lease of certain land forming part of the quayside of the River Tyne, together (as it would appear from the rather brief details given in the case summary) with a licence to moor the vessel at the quayside. The vessel was moored there more or less permanently, having been moved from its mooring only once in nine years. Under the terms of the berthing arrangements set out in the lease the use of the vessel was to be restricted to use as a restaurant, licensed premises, an hotel, a disco and a conference centre; the lease also contained provisions whereby the area of quayside in question was to be used for customer car parking. Not surprisingly, perhaps, the Court of Appeal held that the vessel was rateable: it occupied an area of land under the terms of the berthing licence, and it was immaterial that there was a body of water interspersed between the hull of the vessel and the bed of the river covered by the licence; the appellant had de facto exclusive occupation of the area of land concerned; this was of some value or benefit to the occupier; and there was a sufficient degree or "quality" of permanence.

Leasehold restrictive covenants: "letting scheme"

Williams v. Kiley (t/a CK Supermarkets Ltd) [2003] 06 EG 147

This case involves the question of whether certain restrictions on user contained in the leases of a number of retail premises comprised in a parade or terrace of shops in Swansea, South Wales, all held of the same local authority landlord, were mutually enforceable as between the different lessees trading in the terrace of shops. The respondents traded as newsagents, confectioners and tobacconists from No. 4 in the parade of shops. The leases of the other shops in the parade all contained restrictions stating that the lessees were not permitted to trade as "newsagents, sugar confectioners, tobacconists …". The appellant, whose lease contained the same restrictions, ran a small supermarket from which he sold "a large range of products normally sold at supermarkets, including groceries…tobacco and cigarettes, confectionary and stationery items".

The Court of Appeal held that the restrictions contained in the various leases were indeed mutually enforceable as between the various lessees without their having to rely on the intervention of the landlord. The covenants affecting the various premises were identical in form and were intended to "dovetail" as to the various retail activities which each did and did not permit: it had clearly been intended to create a "reciprocity of obligation" as between the various tenants concerned, and not purely for the benefit of the landlord but for the benefit of each of the tenants also. The covenants were mutually enforceable and the appellant was in breach.

Business tenancies

Zarvos v. Pradhan [2003] 13 EG 114 (CS)

The main question which arose in this case was whether or not the landlord, who had opposed the grant of a new tenancy of restaurant premises on the ground set out in s.30(1)(g) of the Landlord and Tenant Act 1954, i.e. that he intended to occupy the premises himself for the purpose of carrying on his own business, actually genuinely possessed of such an intention.

The court being satisfied that he had no such genuine intention as required by the statutory provisions, the Court of Appeal upheld the decision of the court below that the landlord was not entitled to object to the granting of a new lease to the current tenant of the premises.

Residential tenancies

Yenula Properties Ltd v. Naidu

A number of issues arose in this case but the mot important from a legal point of view concerned the question of whether the service by the landlords' solicitors of a "section 20 notice" under the then provisions of the Housing Act 1988, stating that the proposed tenancy was to be an assured shorthold tenancy was effective when it was served on the tenant's agent (a licensed conveyancer who was acting for him in the matter). The Court of Appeal, applying the earlier case of Galinski v. McHugh [1989] 1 EGLR 109; [1989] 05 EG 89, held that service of the notice on the tenant's agent was effective service for the purposes of the 1988 Act.

As to the service of a "section 20 notice" in a form "to substantially like effect" as that laid out in the statutory "Form 7", see B. Osborn & Co. Ltd v. Dior; Marito Holdings SA v. Deneche [2003] 05 EG 144 (CS): in the first case the name and address of the proposed landlord was omitted from the form; in the second case both the landlord's name and address were given incorrectly; in each case however, the name and address of the landlords' agents were correctly stated, and in the circumstances the Court of Appeal held that both notices were valid.

Baygreen Properties Ltd v. Gil [2002] 49 EG 126

This is a most interesting case, particularly (one would imagine) from the practical point of view of any landlord of residential property: briefly, the premises were the subject of a shorthold tenancy and the landlord sought possession on the ground that the tenant owed more than eight weeks arrears of rent, to wit, at the weekly rate of 70, by the date of the court action, a total of something approaching 2,000. The tenant, among other things, alleged breach of the landlord's covenant of quiet enjoyment against the previous landlord and its managing agents, in respect of which she claimed not only general damages but also aggravated and exemplary damages. She also alleged that the weekly rental due under the tenancy agreement was in fact 25 rather than 70, and as against her present landlord counterclaimed also for damages of something in excess of 5,000 in respect of alleged breaches of the landlord's repairing covenants under s.11 of the Landlord and Tenant Act 1985. In the event the action involving the tenant and her present landlord was compromised and a consent order was made whereby the tenant would give up possession and the landlord would pay her the sum of 2,500 on her vacating the property.

The question which subsequently arose was whether the court actually had jurisdiction to make such an order. In the circumstances, said the Court of Appeal, it was clear that it did not: the court only had legal jurisdiction under the terms of the Housing Act 1988, in a case such as this, to order that the tenancy come to an end and that the tenant give up possession, where on or more of the various grounds set out in the Housing Act 1988 applied: in this case that meant the court should have asked itself before making the court order whether the tenant actually owed more than eight weeks rent "lawfully due". Given the terms of the settlement, from which it was clear not only that the tenant had not actually paid any rent for several months but had also been awarded additional monies in settlement of her claim against the landlord, it was fairly clear that she did not owe the landlord anything at all; ergo, the order for possession was invalid, and should be set aside.

The law is stated as it is understood to be up to 1 May 2003.

Geoffrey WatersonLegal Editor