Ralph Kline Ltd v Metropolitan and County Holdings Ltd [2018] EWHC 64 (Ch); [2018] PLSCS 104 concerned a long lease of buildings granted in 1970. Thirty years later, the landlord granted another tenant a reversionary lease, subject to and with the benefit of the buildings lease – and, 14 years after that, the owner of the reversionary lease granted a third party a lease of the airspace above the buildings. The question that then arose was: who was entitled to possession of the airspace? And should the airspace lease should be registered as being subject to the buildings lease?
The tenant under the airspace lease argued that the references to specific shop premises, specific flat premises, and specific garages in the buildings lease indicated that the demise in the buildings lease was of the internal parts of the buildings only. The judge disagreed. If the demise had been internal only, the lease would have said so. The buildings lease did not contain any wording specifically excluding the structural or external parts of the premises – and the references to specific shop premises, specific flat premises and specific garages did not perform that function.
The buildings lease was expressed to include “the gardens and grounds” and “all fences walls gates fixtures drains and other works now or hereafter thereon”. It would have been very odd to demise the open parts of the premises, without qualification, and then to confine the letting of the buildings to internal parts only.
In addition, the landlord had reserved rights over the airspace, which indicated that the airspace was included in the demise. It was also worth noting that mines and minerals had been excluded. This would have been unnecessary, had the demise been limited to internal parts of the buildings only.
Furthermore, the decorating covenants made specific reference to “the outside of the demised premises”. This made little sense if the demise was limited to internal parts only, especially as the buildings lease did not include any rights to access the exterior parts of the buildings in order to carry out such work. There would be other startling gaps in the buildings lease too, if the premises included internal areas only.
All in all, it made more commercial sense to construe the lease as including the entirety of the premises. It followed, therefore, that the buildings lease included the airspace above as well, since there was nothing in the buildings lease to indicate otherwise.
The subsequent reversionary lease was not relevant when interpreting the buildings lease. It was not appropriate to take its contents into account because subsequent contracts are inadmissible as an aid to the construction of previous written contracts. Furthermore, the buildings lease was concluded more than thirty years before the reversionary lease – and was made between different parties.
The subsequent conduct of the parties was also irrelevant – and Ali v Lane [2006] EWCA Civ 1532, which concerns boundary disputes, did not apply. The task in the present case was one of interpretation; there was no boundary to identify. Furthermore, there was no ambiguity in the buildings lease and no horizontal cut off excluding the airspace. Therefore, the airspace lease was subject to the buildings lease and must be registered accordingly.
Allyson Colby, property law consultant
