COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
HH Judge Richard Seymour
London, WC2A 2LL
B e f o r e :
LORD JUSTICE DYSON
LORD JUSTICE LONGMORE
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Mr. Nicholas Caddick (instructed by Messrs Nicholsons of Lowestoft) for the Appellants
AS APPROVED BY THE COURT
CROWN COPYRIGHT ©
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Peter Gibson L.J.:
"(1) A conveyance of land shall be deemed to include and shall by virtue of this Act operate to convey, with the land, all buildings, erections, fixtures, commons, hedges, ditches, fences, ways, waters, watercourses, liberties, privileges, easements, rights, and advantages whatsoever, appertaining or reputed to appertain to the land, or any part, thereof, or, at the time of conveyance, demised, occupied, or enjoyed with, or reputed or known as part or parcel of or appurtenant to the land or any part thereof.
(2) A conveyance of land, having houses or other buildings thereon, shall be deemed to include and shall by virtue of this Act operate to convey, with the land, houses, or other buildings, all outhouses, erections, fixtures, cellars, areas, courts, courtyards, cisterns, sewers, gutters, drains, ways, passages, lights, watercourses, liberties, privileges, easements, rights, and advantages whatsoever, appertaining or reputed to appertain to the land, or any part thereof, or, at the time of conveyance, demised, occupied, or enjoyed with, or reputed or known as part or parcel of or appurtenant to, the land, houses or other buildings conveyed, or any of them or any part thereof."
But s. 62(4) provides:
"This section applies only if and as far as a contrary intention is not expressed in the conveyance, and has effect subject to the terms of the conveyance, and to the provisions therein contained."
"Moorings are Strictly for Hotel Customers
(Overnight Moorings are for Restaurant Patrons Only)"
This is a Private Mooring. For The Exclusive Use Of Hotel Customers. Others Will Be Treated As Trespassers And Offending Boats Will Be TOWED AWAY. By order of the proprietor. (You have been warned)".
At the Lower Street end of the footbridge leading to Noosa Sound was a sign reading "PRIVATE NO PUBLIC RIGHT OF WAY HOTEL RESIDENTS ONLY".
"Luxury riverside bungalow: One bedroom with jacuzzi spa bath, kitchen, lounge, veranda, moorings and garden."
"The riverside moorings at the hotel are a lovely place to spend a lazy afternoon. You can watch the boats go by, feed the ducks, enjoy the wildlife or do a spot of fishing".
Details of the available fishing were then given.
""the Assets" the Freehold Property the Equipment (and all other assets of whatever nature owned by the Seller and employed in the Business at the Completion Date)
"the Business" the business of an Hotel carried on by or on behalf of the Seller at the Completion Date relating to the Business
"the Completion Date" 14th September 2001
"the Contents" all completed contracts, agreements, orders, engagements and arrangements of the Seller at the Completion Date relating to the Business
"the Freehold Property" the property described in the First Schedule including the buildings, fixtures and fittings thereon
"the Goodwill" the goodwill of the Business ….
"the Equipment" the furniture equipment chattels and other items owned by the Seller ….
"the Purchase Price the sum of £700,000 …."
The property described in the First Schedule was the hotel "as edged red on the Plan attached for identification purposes". The plan also showed edged green the property retained by the Defendants, viz. Robin's Nest and Noosa Sound.
"Agreement for sale
The Seller shall sell and the Buyer shall purchase the Business as a going concern and the Assets and the Goodwill and the benefit (so far as the Seller can assign the same) of the Contracts at the Purchase Price."
"3.4 Retained Land
3.4.1 The following provisions apply where after the transfer the seller will be retaining land near the property.
3.4.2 The buyer will have no right of light or air over the retained land, but otherwise the seller and the buyer will each have the rights over the land of the other which they would have had if they were two separate buyers to whom the seller had made simultaneous transfers of the property and the retained land.
3.4.3 Either party may require that the transfer contain appropriate express terms."
(i) the right for the hotel's residents or customers (or prospective residents or customers) to moor boats at the 3 river moorings at Noosa Sound;
(ii) the right to locate and display 3 mooring signs at those moorings;
(iii) the right to locate and display 2 large boards (naming and advertising the hotel) at specific places on Noosa Sound;
(iv) the right for the hotel's residents and customers to fish at the location of the 3 moorings;
(v) a right of way on foot for the hotel's residents and customers (or prospective residents and customers) between the river moorings along the pathway to Lower Street; and
(vi) a right to locate and display signs advising the hotel's customers of the pathway at two places.
The Claimant sought declarations that it had those rights and an injunction restraining the Defendants from interfering with the rights.
(1) the judge was wrong to find that a right to use the river moorings and the other ancillary rights passed to the Claimant on the transfer of the hotel, because the common intention of the parties, as ascertained from the various documents in evidence, including the correspondence in the course of negotiations, was that no such rights were to pass; and
(2) the judge was wrong to find that the right to use the river moorings was capable of being an easement.
(1) The Birmingham point
"But when the question is as to an implied obligation we must have regard to all the circumstances which existed at the time when the conveyance was executed which brought the parties into that relation from which the implied obligation results; I quite agree that we ought not to have regard to any agreement during the negotiations entered into between the Plaintiffs and the corporation; except in this way; if we find that any particular space in fact was left open at the time when the lease was granted, and that that open space was contracted to be left open during the negotiation which took place, and is not referred to in the lease, we must have regard to the fact of that open space being left, and we must have regard to the fact that by agreement between the parties the lessor had bound himself not to build upon that space; and also we must, in my opinion, in determining what obligation results from the position in which the parties have put themselves, have regard to all the other facts which existed at the time when the conveyance was made, or when the lease was granted, and which were known to both parties."
On the facts Cotton L.J. found that Daniell knew of the building scheme and so he found no interference with the claimants' rights.
"I think [counsel for the claimants] was quite right in saying that we are not to go into the preliminary negotiations which resulted in the final lease. They might be important, and perhaps would be necessarily important, if we were considering whether the lease should be rectified or not, but for the purpose of construing the lease all such considerations as those ought to be disregarded. But the state of the property is all important; and what was being done with it is all important."
He referred to the building scheme and concluded that the easement of light impliedly granted by the lease was of such amount as would come over the corporation's land to Daniell's house after the corporation had built what it liked on the other side of the street.
"A further exception has been recognized in cases in which there could in the circumstances of the case have been no expectation that the enjoyment of the right could be other than temporary."
He then referred to the Birmingham case. Jenkins L.J. summarised the facts of that case. His summary included (at p. 751):
"Somebody took a lease of one of the houses at a time when an adjoining plot only had built upon it old buildings of less height than those contemplated by the scheme; but it was well known to everybody that the intention was, and the building scheme demanded, that this plot should be built upon to a greater height."
He quoted the remarks of Cotton L.J. at p. 307 to which I have adverted in para. 32 above, and said (at p. 752):
"The learned Lord Justice, I think, meant no more than this, that it was knowledge common to both parties that the existing low building was going to be replaced by a higher one and, that being so, the fortuitous access of extra light to the lessee's building while the scheme was being carried to completion could not be regarded as an enjoyment of light which would pass to the lessee a right to have it continued in the same degree."
"Section 62 applies "only if and as far as a contrary intention is not expressed in the conveyance" …. But the section is also subject to any contrary intention which may be implied from circumstances existing at the time of the grant. If, for example, the plot sold and the plot retained are both subject to a building scheme, the purchaser of a house standing on the plot sold will not be able to prevent the plot retained from being built upon so as to diminish his light; for the light was enjoyed "under such circumstances as to show that there could be no expectation of its continuance.""
The authority given for the last sentence is the Birmingham case at p. 307 per Cotton L.J. A similar comment based on the Birmingham case is made in Emmet on Title para. 17.076.
"Option Agreement on "Noosa Sound" which is to run from 28th February 2002 (six months assuming completion on 1st September 2001). After the Hotel sale and during the Option Period the current arrangement for Hotel guests to occasionally pass over "Noosa Sound" will discontinue, although our Clients may give consent from time to time strictly at their absolute discretion. Both "Noosa Sound" and the moorings are let at present but full vacant possession will be available on completion, unless your Clients wish to make their own arrangements with those concerned."
(2) Rights capable of being easements
Lord Justice Longmore:
"The attraction of the Broads for leisure activities is hard to understate; it is a Mecca for activities such as boating, walking, fishing and for those interested in nature and it is this that provide the main driving force for the business."