Defendant vendors granting in 1973 parking rights over retained land determinable upon sale of that land – Plaintiff successor to grantee claiming rights rendered absolute by operation of the Perpetuities and Accumulations Act 1964 – Judgment for plaintiff
In 1972 the defendants owned undeveloped land to the north of a road in Wokingham (the north land) and industrial premises on the south side (the south land) which included Radyne House, an office block with limited car parking facilities. A triangular area of the north land (the blue land) provided additional parking space. At that time plans for developing the blue land were in abeyance because of the possibility of acquisition for highway purposes. On December 1 1972 the defendants entered into a sale and 20-year leaseback agreement with Dillwyn Holdings Ltd (DH) whereby DH would acquire the freehold of the south land together with certain car parking rights over the blue land retained by the defendants. That agreement was completed by a transfer dated January 1 1973, clause 2 (c) of which purported to grant to DH the right to park up to 30 cars on the blue land. By clause 3 (d) the defendants covenanted to use its best endeavours to provide alternative parking facilities “in the event of the [blue land] being compulsorily acquired or otherwise sold”. In November 1995 the plaintiffs acquired Radyne House which the defendants had vacated. In August 1996 the plaintiffs sued for a declaration that their parking rights would not come to an end in the event of a private sale of the blue land. In the course of the trial the judge construed the 1973 grant as being limited to expire on a sale of the blue land whether by CPO or privately, and accordingly, subject only to the question of perpetuity (deferred), the defendants had a right in the nature of a possibility of reverter. As regards the application of the perpetuity rule, the plaintiffs contended that, since more than 21 years had passed, the alleged possibility of reverter had been invalidated by section 12 of the Perpetuities and Accumulations Act 1964 (the Act) thus entitling them to an absolute interest. The defendants disputed the application of section 12 to interests arising on determination of an easement.
Held Judgment for the plaintiffs.
1. The common law drew an anomalous distinction between a right of re-entry annexed to a conditional fee and a possibility of reverter arising after a determinable fee, perpetuity affecting the former but not the latter: see Re Chardon [1928] Ch 464. Section 12 of the Act applied the rule to “a possibility of reverter on the determination of a determinable fee simple, or a possibility of a resulting trust on the determination of any other determinable interest in property”.
2. The defendants could not contend that, because easements subsisted over land, their interest on termination fell outside the section. While an easement could not historically be held “in fee”, there being no tenurial relationship, that factor had ceased to apply since the 1925 legislation: see in particular section 1 of the Law of Property Act 1925. Moreover an entitlement to an easement was an interest in property for perpetuity purposes: see Dunn v Blackdown Properties [1966] Ch 433. Since the future interest of the defendants could only be equitable since 1925, it could be equated with a resulting trust.
3. Nor could a parallel be drawn with a lessor’s right of re-entry (exempt from the rule) because that was merely an incident of the reversion at all times vested in the lessor.
David Hodge QC and Daniel Hochberg (instructed by Charles Russell) appeared for the plaintiffs; Bernard Weatherill QC and Josephine Hayes (instructed by Clifton Ingram, of Wokingham) appeared for the defendant.
