Claim to right of access to car park – Claim depending upon whether right reserved in earlier conveyance – Conveyance preceded by contract incorporating general condition 5(3) – Whether reservation to be implied in circumstances – Doctrine of merger – Whether conveyance capable of rectification – Whether general condition exhausted following conveyance
The claimant and defendant were the owners of long leasehold interests (the headleases) in, respectively, St Peter’s House and St Anne’s House, two large office buildings in Bootle. St Peter’s possessed an extensive car park at the rear, which could not be used (unless expensive arrangements were made with another landowner) without a right of access over a wedge of land (the wedge) belonging to St Anne’s.
The claimant’s building was occupied by a government department that had moved into St Peter’s in 1968, pursuant to a 21-year underlease granted by K Ltd, which at that time held the leasehold interests in both buildings. The underlease contained an express grant of a right of passage over the wedge.
K Ltd subsequently sold and conveyed both headleases to Co-operative Insurance Society (CIS). In October 1989 CIS sold the St Anne’s headlease back to K Ltd under a contract (the CIS sale) that was subject to the Law Society’s conditions of sale (1984 revision), which included general condition 5(3). That condition gave CIS the right to insist on the insertion into the conveyance of such reservations in favour of St Peter’s, its retained land, as would have been implied in favour of a purchaser of that property. However, no such provision was inserted. On the same day K Ltd contracted to sell the same headlease to the defendant by way of subsale, and, in November 1989, both the CIS sale and the subsale were completed by the (direct) transfer of the St Anne’s headlease to the defendant.
In October 1990 the 1968 lease of St Peter’s (until then continuing under the Landlord and Tenant Act 1954) was replaced by a fresh lease (the 1990 lease) granted by CIS in favour of the same government department. On that occasion, however, the grant of the right of passage was qualified by the words “so far as the landlord is able to grant the same.” The St Peter’s headlease changed hands in 1997, and it became vested in the claimant in April 1999.
The claimant sought a declaration that the right of passage still subsisted in favour of itself and its tenant under the 1990 lease. The defendant accepted that the alleged right was validly exercised during the currency of the 1968 lease, since the grant had been made by the then owner of the servient property. However, it maintained that the same could not be said of the 1990 lease, and that, accordingly, the right could not continue to subsist in the absence of an express reservation in favour of CIS in the 1989 conveyance of the St Anne’s headlease. The claimant advanced alternative arguments based on implied reservation, general condition 5(3) and a case for rectifying the conveyances of the St Anne’s headlease.
Held: The claimant enjoyed no right of way over any part of St Anne’s House.
1. In the absence of a valid claim to an easement of necessity, the reservation of an easement would not normally be implied. A rare exception was made where it was shown that the facts were not reasonably consistent with any explanation other than an intention to reserve the right contended for: see, generally, Re Webb’s Lease [1951] Ch 808 and the observations of the Court of Appeal in Peckham v Ellison (1998) 79 P&CR 276; [1998] EGCS 174. The facts of the present case were not comparable to the exceptional circumstances found in Peckham, and, accordingly, despite the unfortunate outcome, the decision in Re Webb should be followed.
2. The claimant could not rely on general condition 5(3), which gave CIS the opportunity, after contracting with K Ltd in 1989, to insist on the insertion into the conveyance of such reservations in favour of St Peter’s as would have been implied in favour of a purchaser of that property. However, no such provision was inserted. Once the conveyance had been agreed and executed, the effect of general condition 5(3) was spent, there being no indication to displace the doctrine of merger, as applied, for example, in Knight Sugar Co Ltd v Alberta Railway & Irrigation Co [1938] 1 All ER 266.
3. The facts disclosed no cause of action for rectification, whether based upon mutual mistake in reducing the conveyance into writing or upon the basis of a unilateral mistake on the part of CIS and known to K Ltd. Nor could any such knowledge be imputed to the defendant.
4. Even if such a claim had subsisted in favour of CIS, and even though such a claim was capable of subsisting as an overriding interest for the purpose of section 70(1) of the Land Registration Act 1925 (see Nurdin & Peacock plc v DB Ramsden & Co Ltd [1999] 1 EGLR 119), there was no way, on the facts, that CIS could be treated as being in actual occupation of the wedge within the meaning of para (g) of that section.
Lesley Anderson (instructed by Eversheds, of Manchester) appeared for the claimant; Timothy Fancourt (instructed by Palser Grossman Solicitors, of Cardiff) appeared for the defendant.
Alan Cooklin, barrister