Defendant owning properties adjacent to council-owned town-centre site – Council selling centre site to defendant while taking option to repurchase in certain events – Council exercising option – Defendant claiming easements over re-purchased site – Whether claim limited to rights subsisting immediately before site sold to defendant – Effect of standard condition of sale
At all material times until March 30 1990 a rundown area in the centre of Tadcaster (the centre site), belonged to the plaintiff council. In 1984 the council prepared a planning brief for redevelopment. At about the same time the defendant, which owned various properties adjacent to the centre site, was formulating its own “Vision of Tadcaster”, which would include the centre site and a number of the defendant’s properties. Over the next five years the parties promoted rival schemes, but, in 1990, the council resolved to co-operate in the defendant’s scheme. On March 30 1990 it was agreed that the council would: (i) sell the centre site to the defendant for £90,000; and (ii) take an option from the defendant to repurchase the centre site at the same price (adjusted for inflation) in the event of the defendant failing to commit itself by October 31 1991 to carrying out an agreed programme of works, such commitment to be assumed by concluding an agreement under section 33 of the Local Government (Miscellaneous Provisions) Act 1982. All relevant documents, including the transfer of the centre site to the defendant, were executed on March 30 1990.
On November 1 1991, no section 33 agreement having been entered into, the council exercised the option. However, the parties failed to reach agreement on what easements over the centre site (in particular rights of light, access, and car parking) would be reserved in favour of the defendant’s properties (the dominant properties) when the centre site was transferred back. Because the buy-back contract, resulting from the exercise of the option, incorporated clause 5(3) of the Law Society’s Conditions of Sale, it was not disputed that rules as to implied easements were to apply as if both the centre site and the dominant properties had been simultaneously conveyed to different purchasers. On that basis the defendant claimed that under common law rules (notably the rule in Wheeldon v Burrows (1879) 12 ChD 31) as well as under section 62 of the Law of Property Act 1925 it was entitled to reserve, as perpetual easements, all rights subsisting as quasi-easements in its favour at the date when the council exercised their option. The council sought a declaration that such rights, if any, were limited to those subsisting in March 1990, when they took the option.
Held Declaration made in favour of the council.
1. But for clause 5(3), the circumstances in which the defendant could have asserted implied easements by reservation would have been very limited, the rule being that grants are construed in favour of the grantee. However, the clause did not of itself give the defendant the benefit of the common law and statutory rules relied on. These merely afforded presumptions to assist the court in determining the true intention of the parties, and as such had no application where such intention could be ascertained from the terms of the contract construed in the light of the circumstances at the time: see Birmingham Dudley & District Bank v Ross (1885) 38 ChD 295 per Cotton LJ at p308; Browne v Flower [1911] 1 Ch 219 per Parker J at p224.
2. The option giving rise to the 1991 contract was part of a wider transaction contained in the various documents executed on March 30 1990. The obvious purpose of that transaction, as evidenced, inter alia, by the fixing of the repurchase price, was to enable the council to unscramble the transaction by reacquiring the centre site exactly as it had previously owned it. Accordingly, there was no reason for thinking that the parties would have wished to create a pattern of rights and liabilities across the re-established boundary by reference to modes of use at the quite different – and later – date when the option should happen to be exercised.
Michael Briggs QC and John Machell (instructed by Walker Morris, of Leeds) appeared for the plaintiffs; Nicholas Dowding QC, Stephen Jourdan and Peter Village (instructed by Pinsent Curtis, of Leeds) appeared for the defendant.
Alan Cooklin, barrister
