Highways –– Dedication –– Acceptance –– Whether only actual use by the public constitutes acceptance –– Whether local highway authority accepted dedication on behalf of the public –– Consequence of public highway status –– Effect of registration of land –– Whether breaches of implied covenants and contract by vendor of affected land
In a memorandum made with the local highway authority in 1964, D dedicated a strip of land (the disputed strip), together with other land, as public highway. The first defendant was the registered proprietor of land that comprised part of the disputed strip and an area to the north of it. The first defendant had acquired the land from the second defendant. The local highway authority mowed grass on the disputed strip each year; although the disputed strip contained some street lights, a road sign and a cycle path, no other works were carried out. The claimant brought proceedings against the defendants alleging that works had been carried out on the disputed strip. The defendants contended that the strip was not part of the highway. The first defendant claimed against the second defendant for breach of implied covenants of title and of the sale contract.
Held: The use of the word “forthwith” in the 1964 memorandum was sufficient to demonstrate an intention to dedicate immediately. Notwithstanding provisions in the memorandum concerning improvement works to be carried out in the future, the memorandum contained a then present intention to dedicate the disputed strip as a highway. Highway authorities had the ability to accept a highway on behalf of the public. Evidence of acceptance by the highway authority was, therefore, capable of amounting to proof of acceptance by the public. The 1964 memorandum was itself an acceptance by the public. Alternatively, there was evidence of use of the disputed strip by way of a footpath and cycle path, as well as the street lights and a road sign. Use of part of the dedicated land could amount to acceptance of the whole. The effect of the strip becoming part of a highway maintainable at public expense was that the highway, subject only to the subsoil and minerals, vested in the highway authority. Even where a road was expressly included in a registered title, it did not necessarily mean that the registered proprietor was the owner of the road; the general boundaries rule (r 278 of the Land Registration Rules 1925) did not divest the highway authority of their interest in the surface. Although it was unnecessary to consider whether the claimant had an overriding interest under section 70(1) of the Land Registration Act 1925, the Secretary of State was not in actual occupation of the disputed land, of which the first defendant was registered proprietor, within the meaning of that provision. In relation to the contractual arrangements between the first and second defendants, the second defendant was not in breach of the covenants implied by sections 2 and 3 of the Law of Property (Miscellaneous Provisions) Act 1994, but was in breach of its contractual obligation to give vacant possession.
The following cases are referred to in this report.
British American Cattle Co v Caribe Farm Industries Ltd (In Receivership) [1998] 1 WLR 1529
Cubitt v Lady Caroline Maxse (1873) LR 8 CP 704
Eyre v New Forest Highway Board (1892) 56 JP 517
Farrell v Alexander [1977] AC 59; [1976] 3 WLR 145; [1976] 2 All ER 721; (1976) 32 P&CR 292; [1976] 2 EGLR 69; [1976] EGD 343; 240 EG 707, HL
Fisher v Prowse (1862) 2 B&S 770
Harrison v Duke of Rutland [1893] 1 QB 142
Meek v Clarke unreported 7 July 1982
Overseas Investment Services Ltd v Simcobuild Construction Ltd 94 LGR 408; (1995) 70 P&CR 322; [1996] 1 EGLR 49; [1996] 02 EG 107
R v Inhabitants of Lordsmere (1850) 15 QB 689
Robertson v Mayor etc of Bristol [1900] 2 QB 198
Rodgers v Ministry of Transport [1952] 1 All ER 634; [1952] 1 TLR 625; 116 JP 200; 50 LGR 520
Sussex Investments v Jackson The Times 29 July 1993
Tithe Redemption Commissioners v Runcorn Urban District Council [1954] Ch 383; [1954] 2 WLR 518; [1954] 1 All ER 653; (1954) 52 LGR 231
Topfell Ltd v Galley Properties Ltd [1979] 1 WLR 446; [1979] 2 All ER 388; (1978) 38 P&CR 70; [1979] 1 EGLR 161; [1979] EGD 956; 249 EG 341 & 448
Tottenham Urban District Council v Rowley [1912] 2 Ch 633
Tunbridge Wells Borough Council v Baird [1896] AC 434
Wallcite Ltd v Ferrishurst Ltd; Ferrishurst Ltd v Wallcite Ltd [1999] Ch 355; [1999] 2 WLR 667; [1999] 1 All ER 977; (1999) 77 P&CR D20; [1999] 1 EGLR 85; [1999] 05 EG 161
Wiltshire County Council v Frazer (1983) 83 LGR 313; (1984) 47 P&CR 69,CA
Woodyer v Hadden (1813) 5 Taunt 125
This was the hearing of a claim by the claimant, the Secretary of State for the Environment, Transport and the Regions, against the defendants, Baylis (Gloucester) Ltd and Bennett Construction (UK) Ltd, in respect of interference to a public highway, and a claim by the first defendant against the second defendant for breach of implied covenant and contract, to which Tewkesbury Borough Council were Part 20 defendants.
Jonathan Karas and Kate Selway (instructed by the Treasury Solicitor) appeared for the claimant; Thomas Jefferies (instructed by Geisler & Laws) appeared for the first defendant; Gwilym Harbottle (instructed by Penleys, of Dursley) appeared for the second defendant; and Alexander Hill-Smith (instructed by Wansbroughs) represented the Part 20 defendants.
Giving judgment, Mr Kim Lewison QC said:
Introduction
The A46 runs from Evesham to Tewkesbury in Gloucestershire. It is now a trunk road. It runs roughly east/west. To the west of Ashchurch,
Disputed strip
Starting from the north, there was, before recent construction, a chain-link fence. That fence was erected some time in the 1960s. It marked the edge of the land used by the then owner of the adjoining land, whose successor in title is Baylis (Gloucester) Ltd. Immediately to the south is a grass verge. Running through the grass verge at the eastern end of the disputed strip is a cycle track, which is surfaced in tarmac. About halfway between the eastern end of the disputed strip and the junction with Northway Lane, the cycle track turns slightly to the south and merges with a footway. Going back to the eastern end of the disputed strip, at the point where the cycle track begins, there is, immediately to the south of it, a drain. The drain runs in a ditch to the point where the cycle track merges with the footpath and carries on underground to the junction with Northway Lane. Immediately to the south of the drain is a footway, which continues round the junction with Northway Lane.
At the junction with Northway Lane, and placed in the grass verge, is a street light. There are two or three other street lights on the disputed strip. There is also a road sign at the corner of Northway Lane. I was also shown plans that indicate the presence of electric cables and telecommunication cables underneath the disputed strip. Part of the disputed strip abuts land that is owned by a pension fund. I was told that the Secretary of State is dealing with that part of the disputed strip by negotiation. I am only concerned with the western half (approximately) of the disputed strip.
1964 memorandum
In 1964 the disputed strip was owned by Dowty Mining Equipment Ltd (Dowty). On 17 January 1964 it entered into a memorandum of agreement with Gloucestershire County Council. The memorandum of agreement was executed under seal. Gloucestershire County Council were then the highway authority for the immediately adjoining highway, then classified as the A438. Dowty was described in the memorandum as “the Landowners” and Gloucestershire County Council were described as “the council”. The relevant parts of the memorandum of agreement said:
WHEREAS the Landowners are seised in fee simple in possession free from incumbrances of the land hereinafter described and have agreed to give up and dedicate to the public the same for the purpose of improving the highway
AND WHEREAS this Agreement is an Agreement relating to the making and maintaining of a highway and entered into pursuance (sic) to the Highways Act for or relating to the making maintaining or repairing of highways
NOW IT IS HEREBY AGREED as follows:
1. In pursuance of the said Agreement and in consideration of the sum of Sixty Four pounds now paid by the council to the Landowners and of the council executing the works hereinafter mentioned the Landowners hereby forthwith GIVE UP AND DEDICATE TO THE PUBLIC for the purpose aforesaid ALL THAT piece of land containing an area of 0.77 of an acre or thereabouts situate on the north side of the Road Number A438 leading from Teddington to Tewkesbury in the Parish of Ashchurch in the County of Gloucester… TO THE INTENT THAT the said piece of land shall be added to and form part of the highway…
Clause 2 of the memorandum gave Gloucestershire County Council an option to acquire the land. The option has not been exercised. Under clause 3 of the agreement, Gloucestershire County Council agreed to carry out certain works to the reasonable satisfaction of the landowner. The works were described as works to:
(a) make up and form the said piece of land as part of the highway; and
(b) remove the existing frontage and regrade and rekerb the entrance to the landowner’s adjoining property as required to make the same good.
Those works have never been carried out.
The rights created by the memorandum of agreement have never been protected by notice or caution at HM Land Registry.
Events since 1964
Since 1964 the disputed strip has been shown in Gloucestershire County Council’s mowing schedules. It was also recorded as highway land in Gloucestershire County Council’s land terrier. Gloucestershire County Council mowed the disputed strip to about a metre back from the edge of the footpath. That would have included the disputed strip. The mowing was carried out twice a year: one cut followed by a “tidy up” in the autumn. The purpose of the mowing was in the interest of road safety, rather than aesthetics. Rather closer mowing was carried out by Dowty. Mr Bennet also told me that he and his son had mowed the grass too. More than two cuts were made at the corner of Northway Lane in order to maintain visibility.
In 1985 a tree at the corner of Northway Lane was felled by Gloucestershire County Council without any protest by Dowty.
In 1990 an application for planning permission was made to Tewkesbury Borough Council for the erection of a sign on part of the disputed strip. Following consultation with Gloucestershire County Council, permission was refused on the ground that the land on which the sign was to be erected was “within the limits of the highway”.
On 1 April 1977 the highway was designated a trunk road*.
* Editor’s note: The Bath-Lincoln Trunk Road (M5 Junction (No 9) Ashchurch to A435 Junction, Teddington Hands)(Trunking) Order 1977 (SI 1977 No 383)
In October 1997 planning permission was granted for the erection of a car showroom and associated buildings. The car-parking area encroached on to the disputed strip. The encroachment was not noticed by the planning authority at the time.
At some stage, part of the disputed strip was laid out as a cycle path and footway, which combine towards the western end of the disputed strip. That part of the disputed strip was transferred to the Secretary of State, who is the registered proprietor of it. The land comprised in the Secretary of State’s registered title immediately adjoins (on its southern boundary) the land in the registered title that was ultimately transferred to Baylis (Gloucester) Ltd.
In 1998 Mr Norton, an employee of Gloucestershire County Council, noticed that works were being carried out on the disputed strip. He alerted the council, and the dispute was brought to light.
How land becomes a highway
Before 1835, when the modern law of highways begins, all highways were repairable at the public expense. This expense fell on the parish. The imposition on the inhabitants of the parish of what could, potentially, be an onerous obligation led to the requirement of the common law that the existence of a highway could only be established by proving both dedication by the owner and acceptance by the public. Acceptance by the public demonstrated that there was a public benefit that justified the public assumption of liability to repair. Although the Highways Act 1835 abolished the universal rule that any highway was repairable at the public expense, it did not do away with the twin requirements of dedication and acceptance. It introduced a second stage, namely adoption, before a highway became maintainable at the public expense. That remains the position today.
Dedication
Dedication is primarily a question of intention of the dedicator, although there are some cases where the dedicator lacks the legal capacity to dedicate. The intention may be proved by the express words or conduct of the dedicator or by inference from his acquiescence in
The relevant words of the 1964 memorandum are that “the Landowners hereby forthwith GIVE UP AND DEDICATE TO THE PUBLIC for the purpose aforesaid” the disputed strip. In my judgment, the word “forthwith” is sufficient to demonstrate an intention to dedicate immediately. I recognise that any contract must be construed as a whole. Mr Alexander Hill-Smith, for Tewkesbury Borough Council, argued that the phrase “for the purpose aforesaid” related back to the recited purpose of improving the highway. Since clause 3 showed that the council were to carry out physical works of improvement, it followed, he said, that the intention to dedicate was only intended to take effect on completion of those works.
It is undoubtedly the case that an agreement may amount to an intention to dedicate in the future, and, in particular, to dedicate upon completion of specified works. In Overseas Investment Services Ltd v Simcobuild Construction Ltd [1996] 1 EGLR 49* the Court of Appeal, at p50F, considered the effect of a clause in an agreement that said:
Upon the issue of the final certificate or certificates as herein provided, [the landowners] hereby give up and dedicate to the public land on which the works are intended to be constructed or such part of such land as shall be covered by the final certificate or certificates TO THE INTENT that the said land shall become a public highway up to and including the boundary of the said land with other land as indicated on the plan.
Commenting upon that clause, Peter Gibson LJ said:
This clause is an unhappy mixture of present and future events. It purports to be a present dedication (“hereby… dedicate”), yet it is qualified by the words “Upon the issue of the final certificate or certificates as herein provided”, plainly a future and (in view of the provisions for termination of the agreement) contingent event. Further, the land to be dedicated as a highway would not be finally identified until the issue of the final certificate or certificates. To my mind, what was intended by the clause was that R&K would make a dedication in such form as would obviate the necessity of any further act of dedication on its part. To that extent it was a present dedication, but could not be effective until the issue of the final certificate, which was the date specified in the agreement for the purposes of section 38(3) for the way to become a highway maintainable at the public expense.
* Editor’s note: Also reported at [1996] 02 EG 107
In my judgment, the clause in the present case is not the same unhappy mixture. It is, in my judgment, consistent only with an immediate dedication. First, the phrase “hereby… dedicate” is, as Peter Gibson LJ said, a present dedication. Second, far from qualifying that present dedication, the word “forthwith” reinforces it. Third, although the memorandum contemplates that work will be carried out in the future, there is no linguistic linkage between that obligation and the dedication, except to the extent that the carrying out of the work is part of the consideration for the dedication. It was argued by Mr Gwilym Harbottle, for Bennett Construction (UK) Ltd, and Mr Hill-Smith, for Tewkesbury Borough Council, that the word “shall” is a word that denotes futurity. However, in my judgment, the word “shall”, in legal parlance, simply means “must”. It is a word of obligation rather than futurity. Mr Hill-Smith says that words of obligation make little sense in clause 1 of the deed, which does not purport to impose obligations on anyone. Although I see the force of that, it does not, in my judgment, detract from the thrust of the clause. In so far as an element of futurity is necessary, it is to be found in the notion that the land is to be part of the highway with effect from the dedication. He also submitted that there was a distinction between an intention to dedicate for highway purposes and an intention to dedicate as a highway. I could not understand what the distinction was, and I reject it. Fourth, the land to be dedicated was identified in the memorandum of agreement. Fifth, there were no provisions for the termination of the agreement. I come to the conclusion, therefore, that a present intention to dedicate as a highway is established.
Acceptance
As I have said, however, dedication does not create a highway without acceptance. What amounts to acceptance? The usual evidence relied upon to establish acceptance is use by the public. Mr Harbottle and Mr Hill-Smith both contend that actual use by the public is the only way in which acceptance can be proved. In other words, actual use by the public is not merely a sufficient condition for establishing acceptance; it is a necessary condition. Actual use for this purpose, they say, means actual exercise by the public of their right to pass and repass.
In many, if not most, cases there is no express dedication. The dedication has to be inferred from other evidence. The usual form of evidence is use by the public. But it is important to remember that in such cases evidence of public use serves a dual function. On the one hand, it is evidence from which the factual inference may be drawn that the landowner has dedicated the land as a highway. If long use by the public as of right has been proved, why has the landowner permitted such use to continue, unless he intended the land to be dedicated for use as a highway? On the other hand, the self-same evidence is used to prove acceptance by the public.
If acceptance by the public in the case of an express dedication can only be established by actual use by the public, odd results could follow. Take a case in which a member of the public attempts to pass over land belonging to a private individual who has not expressly dedicated the land as a highway. That member of the public plainly has no right to do so, and the landowner could, if he wished, bar his entry. He will only lose his right to bar entry if public use has continued long enough to raise the inference that there has been a dedication. But suppose that the landowner had expressly dedicated the land for use as a highway. When the first member of the public approached the newly-dedicated highway, could the landowner bar his entry? If actual use by the public is necessary before the highway can come into existence, logic would suggest that the answer is “yes”. For until the first member of the public has actually used the highway, he has no right to do so. And if he has no right to do so, he would appear to be trespassing on the land. The logical impasse suggests to me that I should look critically at the submission that only actual use by the public can constitute acceptance, even where there is an express dedication.
In R v Inhabitants of Lordsmere (1850) 15 QB 689 the Court of Queen’s Bench considered the liability of the parish to repair a turnpike road that had been constructed under powers contained in a private Act of parliament. Patteson J said:
In all cases where a highway is created by dedication, user is of great importance, not as evidence of an adoption, but as evidence that the way was one of public benefit. Probably that was not required here as the Legislature declares that the road is beneficial to the public; but at all events there was user for many years.
Thus, the function of the evidence of use is to prove public benefit, which, in effect, provides the consideration for the liability of the parish to repair the highway. However, in my judgment, evidence of actual use by the public is not the only evidence from which an acceptance may be proved. In Eyre v New Forest Highway Board (1892) 56 JP 517, Wills J charged the jury as follows:
Repairs by the parish were always an important piece of evidence when the question of highway or no highway came under consideration The question whether repairs were or were not done to it is a piece of evidence which would help you in arriving at a just conclusion as to whether there was or was not a highway.
Later, at p519, he added:
Repair by the parish is always, if it is made out, a strong indication of the public right. It is a burden accepted by the parish that would not be accepted unless there was a public way.
The jury’s verdict was appealed to the Court of Appeal, where Wills J’s direction was described as clear, copious and correct. Conformably with Wills J’s direction, evidence that a way has been swept, scavenged or lighted at the public expense is evidence of
Acceptance by the public is ordinarily proved by user by the public; and user by the public is also evidence of dedication by the owner. Both dedication by the owner and user by the public must concur to create a road otherwise than by statute.
(Judge’s emphasis.)
Although the second quoted sentence suggests that public use is critical, the first sentence does not. It suggests that public use is simply the ordinary way of proving acceptance. It is also noteworthy that Blackburn J was speaking in the context of a presumed, rather than an express, dedication. In Tottenham Urban District Council v Rowley [1912] 2 Ch 633, Farwell LJ quoted with approval a passage from a dissenting judgment of Chambre J in Woodyer v Hadden (1813) 5 Taunt 125, in which the latter said at p646:
If the act of dedication be unequivocal, it may take place immediately: for instance, if a man builds a double row of houses, opening into an ancient street at each end, making a street, and sells or lets the houses, that is instantly a highway.
In the case of acceptance by the public, no single individual can speak on the public’s behalf. Hence, it is necessary to show acts on the ground that amount to acceptance by the public generally. But under modern highways legislation, the highway authority are, so to speak, the representatives of the public. They have a statutory duty to assert and protect the rights of the public over highways (section 116 of the Highways Act 1959, re-enacted as section 130 of the Highways Act 1980). It is true, as Mr Harbottle submitted, that a duty to assert and protect the rights of the public over highways presupposes that there are rights over highways to protect and assert. But the imposition of such duties on the highway authority does make them the representatives of the public in highway matters. In my judgment, highway authorities have the ability to accept a highway on behalf of the public. Evidence of acceptance by the highway authority is, therefore, capable of amounting to proof of acceptance by the public. An acceptance could, in my judgment, be proved by showing that the highway authority had agreed in writing to accept the dedication or by showing that an appropriate committee of the highway authority had resolved to do so. It is not invariably necessary to show actual exercise by members of the public of their rights of passage in the case of an express dedication.
However, since highway authorities are creatures of statute, they can only do what the legislature says they can do. In order to accept a highway, therefore, they must be able to invoke some statutory power to do so. Two candidates have been suggested.
Statutory powers
The relevant Act in force at the date of the memorandum of agreement was the Highways Act 1959. Most of the provisions with which I am concerned have been re-enacted, without substantial amendment, in the current legislation, primarily contained in the Highways Act 1980. It is common ground that in order for a highway to be created under statutory powers, the requirement of the statute must be strictly complied with: Cubitt v Lady Caroline Maxse (1873) LR 8 CP 704 at p715 per Brett J. Section 40(2) of the Highways Act 1959 (re-enacted as section 38(3) of the Highways Act 1980) provided:
Subject to the following provisions of this section, a local highway authority may agree with any person to undertake the maintenance of ––
(a)…
(b) a way which is to be constructed by that person, or by a highway authority on his behalf, and which he proposes to dedicate as a highway;
and where an agreement is made under this subsection the road or way to which the agreement relates shall, on such date as may be specified in the agreement, become for the purposes of this Act a highway maintainable at the public expense.
Mr Jonathan Karas, for the Secretary of State, argues that this provision applies to the present case. I do not agree. First, it is a necessary condition of a valid agreement under section 40 that the road or way is to be constructed either by the dedicator or by the highway authority on behalf of the dedicator. The agreement in the present case did not contemplate any works being carried out by Dowty. Although it did contemplate works being carried out by Gloucestershire County Council to Dowty’s satisfaction, those works were not, in my judgment, to be carried out by the council on Dowty’s behalf. Second, what is to become a highway maintainable at the public expense is “the road or way to which the agreement relates”. The road or way to which the agreement relates is one that is to be constructed in the future. The purpose of the section is, broadly, that once a road or way has been constructed to a proper standard (usually called “adoption standard”) by or at the expense of a landowner, the subsequent burden of repairing the road or way may properly be accepted by the public. This is borne out by the heading to the section, viz “Power of highway authorities to adopt by agreement”. Third, the section does not envisage a two-stage process consisting of dedication and acceptance followed by adoption. It envisages a single process by which, on a date specified in the agreement, land becomes a highway maintainable at the public expense. Fourth, what is to be constructed is a “way” not a highway. It is only when it has been constructed that it becomes a highway. Fifth, I accept the submission of Mr Hill-Smith that the section applies to a person who “proposes” to dedicate land as a highway, and that the word “proposes” looks to a future dedication, rather than an immediate dedication. The Highways Act 1959 was a consolidation Act. In so far as I am entitled to look at the statutory predecessor of section 40 (see Farrell v Alexander [1977] AC 59*), section 146 of the Public Health Act 1875 makes it clear that a highway will only come into existence upon the completion of the relevant works. Sixth, it is doubtful whether “forthwith” is a date specified in the agreement. In my judgment, this power does not advance the Secretary of State’s case.
* Editor’s note: Also reported at [1976] 2 EGLR 69
However, Mr Karas had another string to his bow. Section 71(1) of the Highways Act 1959 (re-enacted as section 72(1) of the Highways Act 1980) provided:
(1) A highway authority may widen any highway for which they are the highway authority and may for that purpose agree with a person having power in that behalf for the dedication of adjoining land as part of the highway…
Mr Karas submitted as follows. First, the power of the highway authority is to widen the highway (not merely a carriageway or footway). A grass verge may be part of a highway: see Rodgers v Ministry of Transport [1952] 1 All ER 634. It follows, therefore, that a highway authority may widen a highway by incorporating a grass verge within it, without the need for the carrying out of physical works. One example of incorporation would be the incorporation of a visibility splay. This was disputed by Mr Hill-Smith. Second, where land is incorporated into a highway maintainable at public expense, the incorporated land takes its character from the highway into which it is incorporated. It, too, becomes highway maintainable at the public expense. I did not understand Mr Harbottle or Mr Hill-Smith to dispute this proposition, and, in my judgment, it is correct. Third, the 1964 memorandum is an immediate dedication. I have already concluded that this is so. Fourth, the obligation to carry out works imposed on the council by clause 3 of the memorandum does not turn the dedication into a contingent or defeasible dedication. I have already concluded that this is so. Fifth, the purpose of improving the highway, which was the recited purpose of the memorandum, is wide enough to include the acquisition of a verge. This was disputed by Mr Hill-Smith. Sixth, the act of entering into the memorandum is itself a sufficient acceptance by the highway authority. This was disputed by both Mr Harbottle and Mr Hill-Smith.
Mr Hill-Smith submitted that the power of the highway authority to improve the highway is limited to what the Highways Act 1959 defines as improvements. This may well be so, but section 64(2)(e) of that Act includes the laying out of grass verges as an improvement. Mr Hill-Smith submitted that an agreement under section 71 must
In addition, the act of dedication is a unilateral act by the owner of the land. Why was it thought desirable to give a highway authority power to “agree” to the dedication of the land? The answer, in my judgment, is that the agreement is itself the acceptance by the public.
If I am wrong, I must go on to consider the next point. There is evidence that part of the land dedicated by the 1964 memorandum was used as a footpath and part as a cycle path. There is also evidence that the whole of the disputed strip featured in the Gloucestershire County Council schedule of areas to be mown and that Gloucestershire County Council did in fact mow a strip 1m back from the road, with slightly more intensive mowing being carried out at the corner with Northway Lane. In addition, there were street lights just to the north of the cycle path and a road sign in the grass verge. Mr Hill-Smith said that the acceptance had to correspond with what was on offer. It was analogous to a contract in which the acceptance must match the offer. Thus, if a person dedicates land as a footway, it cannot be accepted as a carriageway. I accept the general principle, which is borne out by the authority cited by Mr Hill-Smith: see Robertson v Mayor etc of Bristol [1900] 2 QB 198. The next step in the argument was that, where the memorandum uses the word “highway”, it means carriageway, no more and no less. It does not include either a footway or a cycle path. I do not agree. Before the date of the deed, there was a footway in existence at the side of the carriageway. It seems inherently improbable that Gloucestershire County Council were binding themselves to suppress the footway and not replace it. That would hardly be conducive to road safety and would be difficult to describe, in a general sense, as an improvement to the highway. In my judgment, “highway”, where used in the memorandum, bears its ordinary meaning, and will include a footway, a cycle path and, for that matter, a grass verge.
Can use of part of dedicated land amount to an acceptance of the whole? In my judgment, it can. I return to the analogy of offer and acceptance in contract. The offer must either be accepted or rejected. If part of the benefit on offer is accepted by the offeree, he must be bound by the contract. As Sir Herbert Cozens Hardy MR put it in Tottenham Urban District Council v Rowley [1912] 2 Ch 633 at p643:
I think it must be a dedication of the whole or none, and I am satisfied that the latter alternative would do great injustice.
To reach any other conclusion would lead to strange results. Suppose that the owner dedicates a road one mile long. If a member of the public used the first quarter of a mile and then turned off the road, could it really be said that the remaining three-quarters of a mile were not highway? In my judgment, no. Part of the reason why a landowner dedicated land as a highway (at least before the 1835 Act) was to relieve himself of the burden of repair. It would not be just to allow the public to take the benefit of those parts of the road that were in repair, and to repudiate liability to repair those parts of the road that were not.
In my judgment, therefore, the effect of the 1964 memorandum was that the land comprised in it became part of the highway maintainable at the public expense.
Effect of land becoming part of the highway
Two consequences flow from the land becoming part of the highway maintainable at the public expense. First, public rights of way exist over it. Second, under section 226 of the Highways Act 1959 (re-enacted as section 263 of the Highways Act 1980):
every highway maintainable at the public expense, together with the materials and scrapings thereof, shall vest in the authority who are for the time being the highway authority for the highway…
The reason why the surface of the land vests in the highway authority is that it is necessary for it to do so in order that the authority can perform their statutory obligations to repair and maintain the highway: see Tunbridge Wells Borough Council v Baird [1896] AC 434. As I have said, the highway was designated a trunk road on 1 April 1977. The effect of “trunking” a highway is that the highway vests in the minister (now the Secretary of State): see section 228 of the Highways Act 1959, re-enacted as section 265 of the Highways Act 1980. The extent of the vesting is such part of the land as is necessary for the highway authority to perform their statutory functions. It has been described as the “top two spits”: see Tithe Redemption Commissioners v Runcorn Urban District Council [1954] Ch 383. The nature of the interest vested in the highway authority is a determinable fee simple, so that it is a legal estate recognised by the Law of Property Act 1925. Subject to that vesting, the owner’s ownership of, and rights over, the land remain. He is entitled to the subsoil, to minerals under the highway, and so on.
Interaction with the Land Registration Act 1925
The land belonging to Baylis (Gloucester) Ltd is registered land. Baylis is registered as proprietor of that land. The filed plan includes so much of the disputed strip as abuts the former chain-link fence. Section 20 of the Land Registration Act 1925 says that, in the case of a registered disposition of freehold land, the disposition, when registered, confers on the transferee an estate in fee simple, subject:
(a) to the incumbrances and other entries, if any, appearing on the register… and
(b) unless the contrary is expressed on the register, to the overriding interests, if any, affecting the estate transferred…
but free from all other estates and interest whatsoever, including estates and interests of His Majesty…
Mr Harbottle submits that the highway authority have a determinable fee simple in the surface of the highway. That is an estate in land that is registrable under the Land Registration Act 1925. It was not registered. Therefore, on the registration of Baylis (Gloucester) Ltd as proprietor of the land, the estate of the highway authority was extinguished, unless it took effect as an overriding interest.
It is not the practice of highway authorities to register their determinable fees simple at HM Land Registry. It is a commonplace that, particularly in cities, there are vaults and coal holes under streets that, to put it colloquially, “go with” the houses abutting those streets. It could not, I think, be seriously questioned that the registered proprietor of the house would also acquire ownership of the vaults or coal holes under the street. That is so whether the red line on the filed plan includes them or stops short at the back edge of the pavement. If Mr Harbottle is right, many highway authorities do not own the surface of the highways for which they are responsible. This point is not
I was referred to the transcript of Sussex Investments v Jackson (reported briefly in The Times 29 July 1993, although not on this point). The plaintiff was the registered proprietor of land running down to the River Thames. The defendants were the owners of two houseboats moored alongside the plaintiff’s land. On the southern side of the plaintiff’s land there was a fence. Then came a towpath, which was a highway. Next to the towpath was a sloping bank that ran down to the water’s edge. The defendants’ houseboats were moored by ropes secured to poles and trees on the bank. Access to the houseboats was gained by means of a gangplank that passed over the bank, and whose supports were embedded in the towpath. The plaintiff claimed an injunction restraining trespass. The claim was based upon a claim, first, to ownership of the bank, and, second, to ownership of the towpath. Both claims rested upon the foundation of the plaintiff’s registered title. The Court of Appeal held that the plaintiff was entitled to an injunction based on its ownership of the bank. The leading judgment was given by Balcombe LJ. The defendant had argued that title to the bank was vested in the National Rivers Authority by virtue of section 50 of the Thames Conservancy Act 1850. That section provided that the title of the Corporation of London to the bed, soil and shores of the River Thames and all embankments “shall from and after the commencement of this Act be and the same are hereby vested in the Conservators…”. That argument failed for four reasons. First, there was no evidence called as to the title of the Corporation of London before the commencement of the Act. Second, the bank was not part of the bed of the river. Third, the bank was not an embankment. But it was the fourth reason that is material for present purposes. I shall quote it in full:
A finding that the bank is vested in the NRA is inconsistent with the Plaintiff’s registered title. The effect of registration of freehold land with absolute title is that the registered proprietor has vested in him a fee simple absolute in possession, subject to the incumbrances and other entries appearing on the register, and to overriding interests, “but free from all other estates and interest whatsoever” –– see ss5, 20 and 69 of the 1925 Act. There is no entry on the register which relates to any title the NRA may have to the bank, nor is its title (if any) an overriding interest as defined by s70 of the 1925 Act. The judge’s decision that the bank is vested in the NRA is contrary to the basic concept of registered conveyancing.
However, when it came to the towpath, the Court of Appeal took a different view. Again, I shall quote that part of the decision in full:
We have referred above to the entry on the charges register relating to rights of way over the towpath; a public right of way is also an overriding interest under section 70(1)(a) of the 1925 Act. So the vesting of some part of the surface and soil of, and the airspace above, the public footpath in the highway authority, in consequence of the footpath being a highway maintainable at the public expense, is not inconsistent with the plaintiff’s registered title.
The court therefore held that the towpath, to a depth of 6in to 8in, was vested in the highway authority. Mr Harbottle and Mr Hill-Smith submitted that the decision of the Court of Appeal on the latter point was obiter and therefore not binding upon me. They submitted that it was wrong, and that I should not follow it. I would only take that course if I were convinced both that the dictum was obiter and that it was wrong.
The Court of Appeal did not fully articulate its reasons for distinguishing between the bank, on the one hand, and the towpath, on the other. In considering this case, therefore, I must try to understand what the distinction is. The distinction between the two points decided by the Court of Appeal seems to me to be that the vesting in the highway authority was, so to speak, parasitic on the existence of the public rights of way, which ranked as an overriding interest. In relation to the highway authority, the Court of Appeal decided that the vesting of the surface of the towpath in the highway authority was a necessary consequence of the public rights of way. Hence, it also ranked as an overriding interest within section 70(1)(a). This, in my judgment, is reflected in the use of the word, “So”. The vesting in the NRA, on the other hand, was, so to speak, freestanding, and effected by an Act that preceded the Land Registration Act 1925. In addition, the claim as regards the bank was that it was either wholly vested in the NRA or wholly vested in the registered proprietor. The claim in relation to the towpath had to accept that at least the subsoil was vested in the registered proprietor.
The courts have had to grapple with apparent conflicts between legislation relating to registration of title and other means of vesting. It is not in doubt that the purpose of a system of land registration is to promote certainty of title. To achieve that objective, it is necessary to keep to a minimum the number of matters that may defeat the title of a registered proprietor. But, as the Privy Council held in British American Cattle Co v Caribe Farm Industries Ltd (in receivership) [1998] 1 WLR 1529, one exception to the indefeasibility of a registered title is a later inconsistent statute. If the only proper implication from a later statute is that it is inconsistent with the absolute nature of the registered title, then the later statute overrides the Land Registration Act 1925, even in the absence of an express provision to that effect. In my judgment, section 228 of the Highways Act 1959 is such a provision. The clear legislative purpose is that highways maintainable at the public expense should be, and remain, vested in those who are responsible for maintaining them. The use of the word “vest” connotes the transmission of a legal estate. By 1980, when the Highways Act 1980 was passed, much of the land in this country was registered land. It seems to me that the legislature must be taken to have intended that the vesting provisions would apply to registered and unregistered land alike. In this respect, I echo the words of Sir Raymond Evershed MR in Tithe Redemption Commissioners v Runcorn Urban District Council [1954] Ch 383. In that case, discussing the similar vesting provisions of the Local Government Act 1929, he said at p397:
It is to be noted that the formula that I have quoted was incorporated by Parliament in the Act of 1929, passed after January 1, 1926, when Parliament must be taken to have been aware of the terms, and effect of its previous enactments of 1925. The formula is not novel. The same formula is found in many previous statutes in pari materia, for example, the Public Health Act, 1875. Prima facie, therefore, Parliament in 1929, as regards the vesting of highways, must have intended the same effect as had been produced by the earlier and similar legislation. I have thought it desirable to state that apparently obvious fact, because one of the peculiarities of this case is that, on one view of the matter, the situation of highway authorities vis-‡-vis tithe rentcharge annuities may, as a result of property legislation of 1925, be different according as the vesting took place before or after January 1, 1926. If that view were right, the result would be no doubt surprising; but, if it is so, it has revealed a curious and no doubt unpremeditated by-product of the 1925 property legislation.
Lest it be said that the vesting of highways can be traced back to 1835, long before the creation of land registration, I observe that the same point could have been taken in the Tithe Redemption Commissioners case.
In addition, where land is registered, it is registered with general boundaries only. Rule 278 of the Land Registration Rules provides:
(1) Except in cases in which it is noted in the Property Register that the boundaries have been fixed, the filed plan shall be deemed to indicate the general boundaries only.
(2) In such cases the exact line of the boundary will be left undetermined –– as, for instance whether it includes a hedge or wall and ditch… or whether the land registered includes the whole or any portion of an adjoining road or stream.
(3)…
(4) This rule shall apply notwithstanding that a part or the whole of a ditch, wall fence, road, stream or other boundary is expressly included in or excluded from the title or that it forms the whole of the land comprised in the title.
It follows from a combination of rr (1) and (4) that, even where a road is expressly included in a registered title, that does not necessarily mean that the registered proprietor is the owner of the road. Where, as here, it is in fact the owner of the subsoil of the road, the general boundaries rule does not, in my judgment, mean that its registration as proprietor of the road divests the highway authority of their interest in the surface.
In my judgment, the decision of the Court of Appeal in Sussex Investments v Jackson is justifiable not only for the reasons given by the
Overriding interests
The categories of overriding interest are set out in section 70(1) of the Land Registration Act 1925. The two relevant categories are as follows:
(a) Rights of common, drainage rights, customary rights (until extinguished), public rights, profits A prendre, rights of sheepwalk, rights of way, watercourses, rights of water, and other easements not being equitable easements required to be protected by notice on the register;
…
(g) The rights of every person in actual occupation of the land or in receipt of the rents and profits thereof, save where enquiry is made of such person and the rights are not disclosed;
As I have said, the Court of Appeal decided in Sussex Investments v Jackson that public rights of way over a highway were public rights within section 70(1)(a) and that the statutory vesting of the highway was also an overriding interest by virtue of that paragraph. I have followed that decision.
I do not, therefore, need to decide whether the rights of the Secretary of State would also have ranked as an overriding interest under section 70(1)(g). I can therefore deal with this point briefly. Although occupation of part of the land comprised in the registered title is enough (Wallcite Ltd v Ferrishurst Ltd [1999] 1 All ER 977*), there must be actual occupation of some part of the registered title. It is not, therefore, enough to show that the highway authority were in actual occupation of some part of the disputed strip; it must be shown that they were in actual occupation of that part of the disputed strip that was comprised in the registered title acquired by Baylis (Gloucester) Ltd. So far as the cycle path and footpath are concerned, I am not satisfied that they were constructed on the registered title in question. The street lights were to the north of the cycle path, but the precise boundary of the registered title is not clear, and I cannot be satisfied that the street lights were on the registered title. It is just as likely (perhaps more so) that they were constructed on the Secretary of State’s registered title. The road sign was to the west of the boundary of the registered title. The drains and services for the most part lay under the footpath and cycle track, but where they left that route they did not cross the registered title. Moreover, the existence of these physical features cannot, in my judgment, sensibly be called “actual occupation”. That phrase seems to me to connote a human presence. That leaves the mowing. The most intensive mowing took place at the corner of Northway Lane. But that was outside the registered title. About a metre of the grass was mowed from time to time, and I am prepared to accept that some of the mowing was mowing of the disputed strip lying within the boundary of the registered title. But mowing was also carried out by other people, including Dowty and Mr Bennett. I do not know how long it took to mow the disputed strip lying within the registered title, but I would be surprised if it were more than a few minutes. This would have happened a few times a year at most. I cannot regard this as actual occupation of the land. If it mattered, I would have held that the Secretary of State was not in actual occupation of the land.
* Editor’s note: Also reported at [1999] 1 EGLR 85
In the light of my conclusion, I do not need to consider whether Baylis (Gloucester) Ltd made inquiries of the highway authority that would have precluded the authority from relying on their overriding interest under section 70(1)(g).
Conclusions on highway issues
My conclusions on the highway issues are:
1. The 1964 memorandum of agreement amounted to a dedication of the disputed strip as a highway maintainable at the public expense.
2. The dedication was accepted either by the deed itself or by subsequent public use of part of the disputed strip and/or the activities of the highway authority.
3. The consequence of the dedication was that title to the highway vested in the highway authority.
4. That title is now vested in the Secretary of State.
5. The registration of Baylis (Gloucester) Ltd as proprietor of title no GR 168362 has not divested the Secretary of State of that title.
Contractual claims
I turn now to the contractual claims by Baylis (Gloucester) Ltd against Bennett Construction (UK) Ltd. Mr Karas and Mr Hill-Smith took no part in this part of the hearing. There are three contractual claims. First, there is a claim for breach of the covenant implied by section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1994. Second, there is a claim for breach of the covenant implied by section 3(1) of that Act. Third, there is a claim for breach of the express contractual obligation to give vacant possession on completion.
Contract
The contract was dated 29 December 1997. It incorporated the standard conditions of sale (3rd ed). The property was described as:
The freehold property being Plot 1 Northway Gate Northway Lane Ashchurch Tewkesbury Gloucestershire more particularly delineated and outlined in red… on the attached plan (“the Plan”) Together with the benefit of the rights and easements referred to in the Property Register of title GR 168362…
Incumbrances were defined as the matters referred to in the property and charges register of the same title. Special condition 1(a) said:
This Agreement incorporates the Standard Conditions of Sale (Third Edition). Where there is a conflict between those Conditions and this Agreement, this Agreement prevails.
Special condition 2 said that the property was sold subject to the incumbrances. Special condition 4 said:
The Property is sold with vacant possession on completion…
Special condition 14 said that the terms of the contract should not merge on completion. Finally, I must refer to condition 3.1 of the standard conditions. That said that the property was sold free from incumbrances, other than those referred to in condition 3.1.2. Condition 3.1.2 referred to:
(a) those mentioned in the agreement;
(b) those discoverable by inspection of the property before the contract;
(c) those the seller does not and could not know about;
(d) entries made before the date of the contract in any public register except those maintained by HM Land Registry or its Land Charges Department or by Companies House;
(e) public requirements.
The contract also had annexed to it a draft transfer. The plan attached to the contract showed the southern site boundary as running along the north edge of the cycle track and footpath. In other words, it included part of the disputed strip.
Transfer
The transfer was also dated 27 December 1997. It is headed with the title number of the property, that is title no GR 169362. The property is described as:
the part of the land comprised in title number above referred to and shown edged in red on the Plan…
The plan is the same plan as that attached to the contract. Clause 4 of the transfer gave a full title guarantee.
Law of Property (Miscellaneous Provisions) Act 1994
The giving of a full title guarantee carries with it a number of implied covenants. The implied covenants may be modified by the parties, but that did not happen in this case. Section 2(1)(a) implies a covenant:
that the person making the disposition has the right… to dispose of the property as he purports to…
Section 3(1) implies a covenant that the person making the disposition is disposing of the property free:
(a)…
(b) from all other rights exercisable by third parties,
other than any rights which that person does not and could not reasonably be expected to know about.
Section 6 says that liability under these covenants does not extend to:
any particular matter to which the disposition is expressly made subject.
Finally, r 77A of the Land Registration Rules says that any covenant implied by the 1994 Act in a registered disposition takes effect as if the disposition had been expressly made subject to:
any overriding interest of which the person to whom the disposition is made has notice and which will affect the estate created or disposed of when the disposition is registered.
Breach of section 2(1)
Mr Tom Jefferies, for Baylis (Gloucester) Ltd, says that the disposition purported to dispose the whole of the land shown on the plan attached to the transfer. The plan included part of the disputed strip. Because the surface of the disputed strip was vested in the Secretary of State, it did not do that. Consequently, there was a breach of the covenant implied by section 2(1). Mr Harbottle retorts that it is not so simple. He says that the covenant for title has little part to play in the system of registered conveyancing. He relies on Meek v Clarke unreported 7 July 1982. In that case, a transfer purported to transfer land comprised in a registered title. The transfer was registered. But the register contained an error, in that it included a right of way that had in fact been released. Oliver LJ said:
The effect of the registration was… to vest that which is described in the registered entry in Mr Clarke in fee simple… Thus Mr Bonney argues, there never was nor could have been any question of Mr Clarke’s not having power to convey the estate expressed to be conveyed, for whether there is or is not a breach of this covenant has to be established at the date of the conveyance. Speaking for myself I find this argument unanswerable In such a scheme there is very little room for the operation of a covenant for good right to convey in the ase of an absolute title. For the registered entry itself imports the right to dispose of the registered estate, though the covenants for quiet enjoyment and for freedom from encumbrances may still have an operation as regards, for instance, overriding interests created since the last disposition for value.
Mr Jefferies sought to distinguish this case on two grounds. First, he said, the property was not transferred by reference to a registered title, but by reference to a plan. Second, he said, one has the statutory vesting of the surface of the land in the highway authority. In my judgment, the transfer did convey by reference to the registered title, although the contract did not define the land in that way. Why the transfer differed from the contract I do not know, and there was no claim to rectify it. As to the second point, I have held that the statutory vesting was not inconsistent with the registered title. I consider, therefore, that there was no breach of the covenant implied by section 2(1).
Breach of section 3
The public rights of way and the rights of the highway authority were rights exercisable by third parties. Thus, the existence of those rights falls within the covenant implied by section 3(1) unless one or more of the exceptions to liability applies. I heard evidence from Mr Bennett. In the light of that evidence, Mr Jefferies accepts that Bennett Construction (UK) Ltd did not know about those rights. But, he says, the rights were not rights that Bennett Construction (UK) Ltd could not reasonably be expected to know about. I have put that in a clumsy way because the covenant is expressed in the negative. The covenant does not say that the covenantor is liable for rights that he could reasonably be expected to know about; it says that he is not liable for rights that he could not reasonably be expected to know about. Thus, it seems to me that the question is not: did the covenantor make reasonable inquiries? Rather, the question is: were there reasonable inquiries that the covenantor could have made, but did not? I put it this way because the concept of a band of reasonableness is well known. It may, for example, be reasonable to make inquiries A, B, C and D. It may be equally reasonable to make inquiries A, B, C, D and E. If the first set of inquiries would not have revealed the right, but the second set would, I consider that the covenantor does not escape liability. In other words, the covenantor must make all reasonable inquiries.
Mr Harbottle’s first answer to the claim is to rely upon section 6. He says that the rights of the Secretary of State and the public were covered by condition 3.1 of the standard conditions. For ease of reference, I repeat condition 3.1.2. It made the sale free from incumbrances other than:
(a) those mentioned in the agreement;
(b) those discoverable by inspection of the property before the contract;
(c) those the seller does not and could not know about;
(d) entries made before the date of the contract in any public register except those maintained by HM Land Registry or its Land Charges Department or by Companies House;
(e) public requirements.
Mr Jefferies submitted that section 6 did not apply because it can be invoked only in relation to “particular” matters. He submitted that the description of a class of potential incumbrances is not enough, without expressly identifying individual incumbrances. If the parties wished to limit the implied covenants so as to embrace a class of incumbrances, they were free to do so under section 8. But that had not been done in the present case. In my judgment, this submission is inconsistent with the standard amendment to the implied covenant imported by r 77A of the Land Registration Rules. That rule makes a disposition subject to overriding interests of which the transferee has notice. That, to my mind, is a class of potential incumbrances. I do not, therefore, accept this submission.
However, I do not consider that condition 3.1.2 applies, for other reasons. The rights in question were not mentioned in the agreement. So exception (a) does not apply. Exception (c) gives the seller no better protection than section 3 itself. Indeed, the omission of the word “reasonably” in condition 3.1.2 imposes a more stringent test than the section. An assertion that the land terrier maintained by Gloucestershire County Council was a public record was abandoned. So that leaves exception (b). I do not consider that someone who simply inspected the land in the registered title would have discovered the existence of the highway. As I have said in discussing the question of actual occupation, most of the visible signs of the highway were not on the registered land. There is no evidence that mowing took place at or shortly before the date of the contract. Since the contract was made in December, I am not prepared to infer that any such mowing took place at that time. I might also add that section 6 says that liability does not attach in respect of matters to which the disposition is made subject. The contract for the disposition and the disposition itself are, on the face of it, two separate matters. It seems to me that the matters to which the disposition is made subject are matters that appear on the face of the instrument effecting the disposition. But this last point is not necessary to my decision. In my judgment, therefore, Bennett Construction (UK) Ltd must stand or fall on the section itself.
Inquiries made by Bennett Construction (UK) Ltd
As a preliminary point, Mr Harbottle correctly said that three buyers of the land, all carrying out the usual searches and inquiries, had failed to discover the existence of the highway. If all three had failed to discover it, how could it be said that Bennett Construction (UK) Ltd ought to have been the only one to have known? This cannot simply be dismissed as a jury point. In my judgment, it has force. But it does not provide a conclusive answer.
Mr Jefferies said that the existence of physical features on the land should have put Bennett Construction (UK) Ltd on notice. Armed with
First, there was the fence. The fence was set back from the north edge of the cycle path by some distance. When Mr Bennett first measured the land he assumed that the fence was the boundary. But the measurement fell short of the advertised area of the land. Mr Bennett went back to the seller’s agents and was given to understand that the boundary of the land went up to the edge of the cycle track. When he remeasured the site on that basis, he found that it did correspond to the advertised area. Second, there were the street lights. But it is by no means clear that the street lights were on the disputed strip. Third, there was the road sign. The road sign was, however, to the west of the disputed strip. Fourth, there was a manhole cover and the presence of services. Mr Bennett said that it was not unusual to find services running under private land, and he himself had a site in another village under which ran a sewer and a gas main. I am not persuaded that the physical features of the disputed strip should have put Bennett Construction (UK) Ltd on notice that the disputed strip was, or might be, part of the highway.
Had I reached the opposite conclusion, it would have been necessary to consider the effect of r 77A of the Land Registration Rules. If the physical features should have put Bennett Construction (UK) Ltd on notice, then, at first blush, the same physical features should equally have put Baylis (Gloucester) Ltd on notice. Although section 3 itself refers to “knowledge”, r 77A refers to “notice”. Notice and knowledge are not necessarily the same. However, as the point does not arise for decision, and neither party made oral submissions about r 77A (though it was mentioned in skeleton arguments), I express no concluded view.
Bennett Construction (UK) Ltd’s solicitors in fact made inquiries of Tewkesbury Borough Council. The inquiries were in standard form. The answers to the inquiries, compiled with the help of Gloucestershire County Council, the county highway authority and the agent of the Secretary of State, did not reveal that the disputed strip was part of the highway. Given my conclusion that the physical features of the land were not sufficient to put Bennett Construction (UK) Ltd on notice that the disputed strip was, or might have been, part of the highway, I do not consider that Bennett Construction (UK) Ltd’s solicitors can be criticised for not asking specific questions designed to elicit the precise boundaries of the highway.
In my judgment, therefore, there was no breach of the covenant implied by section 3.
Vacant possession
Special condition 4 said that “the property” was to be sold with vacant possession on completion. That obligation did not merge upon completion. In my judgment, it is necessary to identify the property in order to decide of what vacant possession was to be given. The contract did not refer to the rights of the highway authority, nor to the statutory vesting. Accordingly, I conclude that Bennett Construction (UK) Ltd was, on the face of it, contractually obliged to give vacant possession of the disputed strip, in so far as it lay within the property contracted to be sold. Mr Harbottle submitted, however, that a general condition should not be allowed to override a special condition. He said that the obligation to give vacant possession did not override condition 3.1.2. But, as Mr Jefferies pointed out, the obligation to give vacant possession was a special condition, whereas condition 3.1.2 was a general condition. In my judgment, the obligation to give vacant possession is not qualified by condition 3.1.2. In addition, I have held that condition 3.1.2. does not apply.
What, then, is the scope of the obligation to give vacant possession? Mr Jefferies pointed out, in my judgment correctly, that the property contracted to be sold was not described by reference to the registered title. It was simply described by reference to a plan. The land shown on the plan included part of the disputed strip. In my judgment, therefore, Bennett Construction (UK) Ltd was contractually obliged to give vacant possession of that part of the disputed strip that lay within the land shown on the plan.
Mr Jefferies submitted that a buyer does not get vacant possession if the land is occupied by someone else. I agree. But the disputed strip was not actually occupied by anyone. He next submitted that the buyer does not get vacant possession if he cannot use the land in the manner contemplated by the contract. In the present case, it was contemplated by the contract that the land would be developed. As part of the development, the disputed strip was required for car parking and a bund. In the light of the rights of the public and the highway authority, that development was not possible. In support of this submission, he referred me to Topfell Ltd v Galley Properties Ltd [1979] 1 WLR 446* (the text of the judgment as reported in the All England Law Reports is slightly different). In that case, the buyer bought a house at auction. The upper floor was subject to a tenancy. The ground floor was empty. The contract provided that vacant possession of the ground floor was to be given. But the housing authority had served a statutory notice that had the effect that the house could only be occupied by one household. It therefore followed that for as long as the tenancy of the upper floor continued, the ground floor could not be occupied by anyone other than the tenant. Templeman J said at p449D:
The vendors say that all that “vacant possession of the ground floor” means is that it is empty… The purchasers, on their part, say that vacant possession of the ground floor is a contractual requirement on the vendors which binds the vendors to deliver their property in a state in which it can be enjoyed. Vacant possession, they say, is the right to occupy and enjoy the property either by the purchaser himself or by his tenants or licensees.
In my judgment, the purchasers are right about this. The meaning of the words “vacant possession” can, I think, vary from context to context, but the background to the case is that, to all outward appearance, the house consisted of two separate occupations. To all outward appearance, the ground floor was capable of being occupied by the owner or his tenants and licensees. When the contract boasted that vacant possession of the ground floor would be given, it was saying that the great advantage of this property is that you can occupy the ground floor. In my judgment, when the vendors said they would give vacant possession in the context of these particulars in this contract and in the context of this property, the vendors cannot now say, “Oh, no; all we intended and all we contracted to give was the legal right of possession in the negative sense. There is no rubbish on the floor, no other tenants and nobody else was there…” I have come to the conclusion that the vendors were contractually bound, on completion, to hand over the ground floor in a condition which would allow the plaintiffs to occupy it.
* Editor’s note: Also reported at [1979] 1 EGLR 161
I do not consider that this case supports the wider submission made by Mr Jefferies, namely that vacant possession is not given if the buyer cannot use the property in the manner contemplated by the contract. If, for example, the contract contemplates demolition of a building, but the building becomes listed as being of special architectural or historic interest, the listing would not prevent vacant possession of the building from being given. But if the buyer cannot use it at all, then, even though it is physically empty, vacant possession may well not have been given. Mr Jefferies referred to a catalogue of offences under the Highways Act 1980 that could be committed by a person who sought to exploit the disputed strip. It is true that Baylis (Gloucester) Ltd obtained the subsoil, and would be entitled to exploit it in a way that did not interfere with the highway. But, in my judgment, the severe constraints on the use of the surface mean that Baylis (Gloucester) Ltd did not obtain vacant possession of the whole of the property contracted to be sold.
Mr Jefferies finally submitted that if the buyer does not get the legal right to possession, he does not get vacant possession. He said that where a highway has vested in a highway authority, it is the authority, rather than the owner of the subsoil, who have the right to possession. It is true that the owner of the subsoil is entitled to bring an action in trespass against a person who is misusing a highway: see, eg, Harrison v Duke of Rutland [1893] 1 QB 142. However, although the right to possession is usually indivisible, in a case where ownership of the land has been vertically severed the highway authority also have a right to possession of the highway. This is established by Wiltshire County Council v Frazer (1983) 83 LGR 313, to which Mr Jefferies referred
It follows, therefore, that Baylis (Gloucester) Ltd did not obtain the legal right to possession of the highway, at all events in so far as it was being used as such, even though it had a right to bring an action in trespass for misuse of the highway.
I conclude, therefore, that Bennett Construction (UK) Ltd was in breach of its contractual obligation to deliver vacant possession of the property to be sold.
Conclusions on contractual issues
My conclusions on the contractual issues are:
1. Bennett Construction (UK) Ltd was not in breach of the covenant implied by section 2 of the Law of Property (Miscellaneous Provisions) Act 1994;
2. Bennett Construction (UK) Ltd was not in breach of the covenant implied by section 3 of that Act;
3. but Bennett Construction (UK) Ltd was in breach of its contractual obligation to give vacant possession.
I shall hear counsel on what form of order I should make to give effect to my conclusions.
