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.
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.
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
Claim in respect of interference to a public highway and claim for
breach of implied covenant and contract
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.
Solicitor) appeared for the claimant, the Secretary of State for the
Environment, Transport and the Regions.
the first defendant, Baylis (Gloucester) Ltd.
the second defendant, Bennett Construction (UK)Ltd.
Part 20 defendants, Tewkesbury Borough Council.
MR KIM LEWISON QC:
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, en route
to the M5, it passes Northway Lane, which joins it from the north. To the west
of Northway Lane and to the north of the carriageway is a strip of land (the
disputed strip). To the north of the disputed strip is land that now belongs to
Baylis (Gloucester) Ltd. It was sold to it by Bennett Construction (UK) Ltd.
The principal issue in this case is whether the disputed strip is part of the
highway. If it is, the question then arises of whether Bennett Construction
(UK) Ltd is liable to Baylis (Gloucester) Ltd under the terms of the contract
between them. In addition, the question will also arise whether Tewkesbury
Borough Council are liable to Bennett Construction (UK) Ltd as a result of
answers given to inquiries before contract. The latter question is not,
however, before me.
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 road1.
1 The Bath-Lincoln Trunk Road (M5 Junction (No 9),
Ashchurch to A435 Junction, Teddington Hands) (Trunking) Order 1977 (SI
1977/383)
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 public use
of the way. In the present case, whether there was an intention to dedicate
and, if so, whether it was an intention to dedicate immediately is, in my
judgment, a question of construction of the 1964 memorandum of agreement.
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.
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: see Halsbury’s Laws of
England (4th ed) vol 21 para 85. In Fisher v Prowse (1862) 2
B&S 770 Blackburn J said:
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.
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 contemplate the carrying out of works and
could not be simply passive. I agree with Mr Karas that ‘widen’ means ‘widen’.
To revert to the example of a visibility splay, it would be a capricious
intention to attribute to the legislature that the highway authority could
widen the highway by incorporating a visibility splay if there were trees on it
that had to be cut down, but could not do so if there were no trees or
vegetation, but merely a threat to plant them. Mr Harbottle, supported by Mr
Hill-Smith, also submitted that a highway could not come into existence under
this section until there had been not only dedication, but also acceptance and
actual use by the public. There are two problems with this contention. The
first is linguistic. The power of a highway authority is to widen a highway.
The highway authority have no power under this section to encroach upon land
that is not a highway. As ancillary to the power to widen a highway, the
authority may enter into an agreement with a person for the dedication of
adjoining land as a highway. Linguistically, it seems to me that the section
envisages that the dedicated land will become highway before the public
actually uses it. Otherwise, the highway authority would always be acting ultra
vires. The second problem is practical. Suppose that a highway authority take
the view that a single-track road needs to be widened. They decide not to widen
it along its whole length, but, instead, decide to create stopping-places. They
are likely to do this only where the
road carries light traffic. Once the stopping-places are complete,
are they part of the highway? Or must one wait until two cars actually meet in
the middle of the road, with the result that one of them has to pull over into
the stopping-place? The first would seem to me to be the sensible answer. In my
judgment, it is not necessary for actual use by the public to be proved in
order to constitute acceptance for the purposes of section 71.
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) (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 covered by satisfactory authority. It is not
discussed in Ruoff & Roper on Registered Conveyancing.
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-à-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 Court of Appeal, but for other reasons as well. I propose to follow it.
I do not consider that, in so doing, there is any inconsistency with the later
decision of the Court of Appeal in Overseas Investment v Simcobuild.
In that case, there were no existing public rights of way, no existing highway,
and hence no statutory vesting.
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.
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 case 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 LandCharges
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 that
notice, it should have asked more questions than usual when it bought the land.
What, then, were the physical features?
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.
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 me. The clearest statement is that
found in the judgment of Griffiths LJ, with whom Stephenson LJ agreed.
Griffiths LJ took the view that because of the statutory vesting, possession of
the highway was vested in the highway authority.
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.
