England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
(HIS HONOUR JUDGE WAKEFIELD )
CHY04104

		Royal Courts of Justice Strand, London, WC2A 2LL
		2nd March 2006

Lord Justice Chadwick :

1. This is an appeal from an order made on 14 March 2005 by His Honour Judge Wakefield, sitting in the Central London County Court, in proceedings brought by John Martin Kent and his wife, Philippa Kent, against their neighbours Matthew Kavanagh and his wife, Marianne Morgan Kavanagh.
2. Mr and Mrs Kent are the owners and occupiers of a dwelling house known as No 56 Dovercourt Road, London SE22. Mr and Mrs Kavanagh are the owners and occupiers of the house next door, No 58 Dovercourt Road. The dispute relates to a path which runs between the two properties, giving access from Dovercourt Road to their back gardens. It is now common ground that the boundary between the two properties is along the mid-line of the path. Put shortly, the issue for decision in this Court is whether (as the judge held) Mr and Mrs Kent are entitled to a right of way over that half of the path not within their ownership. That issue raises questions of some general importance in relation to the rights inter se of owners of neighbouring properties, formerly let under building leases pursuant to a scheme of development, where the freehold interests have been acquired on enfranchisement pursuant to the Leasehold Reform Act 1967.
3. At the time of the enfranchisement of the two properties in 1976, the Dulwich College Estate of which they formed part was subject to a management scheme which had been approved by the High Court pursuant to section 19 of the 1967 Act – see In re Dulwich College Estate's Application (1974) 231 EG 845. But it has not been suggested – and I have not been able to identify – any provision in that scheme which is of relevance to the present dispute. The issue falls to be decided without recourse to the management scheme

The underlying facts

4. At the beginning of the last century the Governors of Alleyn's College of God's Gift (commonly known as Dulwich College) entered into a building agreement with, and subsequently granted 99 year building leases to, HJ and AH Williams ("Messrs Williams") for the development of that part of the Dulwich Manor Estate which lies between Woodwarde Road (to the south) and Townley Road (to the north). The building agreement – as recorded in minutes of the Executive and Finance Committee dated 11 April 1907 - was for the erection of semi detached houses over a period of six years in accordance with plans to be submitted to and approved by the Governors.
5. The spine of the development was a new road. The even numbered plots lay to the west of the road; the odd numbered plots to the east. The road – to which (as reported to the Governors on 26 November 1908) Messrs Williams had given the name Dovercourt Road - was laid out in the form of a dog-leg; so that it ran north from its junction with Woodwarde Road for part of its length before turning to the northwest to join Townley Road. The building plots to the west of the road (other than that which became No 56 Dovercourt Road) were rectangular; having a frontage to the road of approximately 20 feet and a depth of approximately 150 feet.
6. The plot which became No 56 fronts onto Dovercourt Road at the point at which the road turns to the northwest. The long sides of the plots which lie to the south of No 56 (Nos 58 to 64) run from west to east: the long sides of the plots which lie to the north of No 56 run from southwest to north east. The effect is that the plot which became No 56 is wedge shaped. The point of the wedge is at its western end. From that point the long sides of the wedge run east and north-east to Dovercourt Road. The shape of that plot had the effect that, when built in or about 1910, the dwelling house at No 56 (which is aligned with the houses to the north) was set some way back from the common boundary between that plot and plot No 58.
7. As I have said, the building agreement provided for the erection of semi-detached houses. Effect was given to that intention by the erection of two pairs of semi-detached houses on the plots to the south of No 56 (plots 58 to 64). There was a passageway between No 60 and No 62, which gave access to the back garden of each. But the requirement was relaxed when plans for other houses were submitted to the Governors for approval in January 1908. The Surveyor reported to the Executive & Finance Committee on 9 January 1908 that: "these houses are not strictly semi-detached, that is to say they are all connected on the upper floor, but on that only. . . . In external appearance they appear to be semi-detached, and there is a clear way through from the front to the back gardens on the ground level." That revised proposal was approved by the Governors on 23 January 1908. Effect was given to the revised proposal when the houses to the north of No 56 were erected. They appear, on the Land Registry map dated 4 March 1910, as a terrace; but that, of course, is not inconsistent with there being "a clear way through from the front to the back gardens on the ground level" and the map gives some indication that there was a passage between each pair of houses.
8. The importance which the Surveyor attached to access to a rear or side entrance was emphasised in a report which he made to the Governors a year later, on 28 January 1909, in connection with Messrs Williams' request for approval of plans for two houses on the opposite side of Dovercourt Road (Nos 57 and 59). He advised that: "I think it very important that, even in small houses such as these, the main entrance to the street should not be used by tradesmen, street hawkers, etc; for the entrance of stores and fuel, or for carrying out dust, refuse, etc. As the front doors of each pair of houses are adjacent, the use of one of them for carrying in and out coal or dust might be distinctly objectionable to the occupant of the neighbouring house".
9. No 56 is the southern house in the row (or terrace) which fronts Dovercourt Road to the north of the point at which that road has turned to the northwest. Its pair is No 54. As I have said, the effect is that the plot on which No 56 has been erected is wedge-shaped. And it is clear from the 1910 Land Registry map that access from Dovercourt Road to the garden at the back of No 56 could readily be obtained over that part of the plot which lay between the dwelling house and the common boundary with No 58. Nevertheless, it is equally clear from that map that there was, at the date of that map, a defined passage between No 58 and No 56, equivalent to that between No 60 and No 62. The passage between No 56 and No 58 ran from east to west, along the flank wall of No 58. It was bounded to the north by a physical feature shown on the map; which, from other evidence, can be identified as a wooden fence. The features which I have described are evident, also, on the 1919 revision of the Ordinance Survey Map.
10. Access to the back garden of No 56 Dovercourt Road changed in or about 1930. The dwelling house on No 56 was extended to the south by the construction of a garage. Approval to the erection of the garage was obtained from the Governors on 13 March 1930. The Surveyor reported to the Executive and Finance Committee on that day that: "The alterations consist of removing a small single story annex containing the scullery and w.c., and building a new wall which will form part of the boundary between this house and No 58 . . . The boundary fence belongs to No 56." The report to the Committee was accompanied by (or, at least, prepared with the assistance of) plans which show the position clearly. The southern wall of the new garage was parallel to and about three feet from the northern flank wall of the dwelling house on No 58. A wooden fence extended the line of the garage wall eastward towards Dovercourt Road and westward towards the bottom of the back garden. The judge thought it likely that the fence had been there before the garage was constructed. He was right to take that view: the fence is in the position of the physical feature shown on the 1910 map to which I have already referred. But it is now common ground that the Surveyor was wrong to report that the new wall (and the fence) formed the boundary between No 56 and No 58. It is now common ground that the boundary lay along the mid-line of the pathway between the garage wall of No 56 (and the fence) and the northern flank wall of the dwelling house on No 58.
11. The position changed again in 1988. The garage of No 56 was then converted into an office and living space. The effect was that it then became impossible to gain access from Dovercourt Road to the back garden of No 56 without using the pathway. Access from the pathway to the garden was through a gate in the fence immediately to the west of the former garage. The judge found as a fact that the gate had been there when No 56 changed hands in August 1976. He went on to say (at paragraph 63 of his judgment) that he thought that "the gate did exist well before 1976" and that "it seems likely that the gate into the rear of number 56 was installed by some arrangement with the lessees after 1930". Again, it seems to me that the judge was right to take the view that the gate was installed soon after the erection of the garage in 1930. Although it would have been possible to gain access to the back garden of No 56 through the garage, that would not have been convenient (given the purpose for which the garage had been erected and the use to which it may be assumed to have been put). The pathway was there to be used; and the probability must be that the gate was installed so that use could be made of it.
12. No 56 Dovercourt Road was held under a building lease granted by the Governors to Messrs Williams on 17 December 1909. In the Surveyor's report to the Committee on 13 March 1930, there is reference to the applicant (Mr Tait) being "then in treaty for the purchase of the headlease of this property". That suggests that there may have been an underlease granted by Messrs Williams in or about 1909 to the original occupier of No 56; but no record of that has survived. In 1976, the then headlessee, Douglas Victor Clasper, took advantage of the rights to enfranchise conferred by the Leasehold Reform Act 1967. On 14 May 1976 the Governors transferred the freehold of No 56 to Mr Clasper. He sold on, in August 1976, to David Keith Oriel and his wife, Joan Julie Oriel. The first evidence of use of the pathway to gain access to the back garden of No 56 was that of their daughter, Susan Oriel. Her evidence was that there was always a gate from the rear of No 56 to the pathway from the time when she and her parents first lived in the house (August 1976) and that the pathway was used regularly and without permission. The judge accepted that evidence. He found Ms Oriel an independent and convincing witness.
13. The steps by which Mr and Mrs Kent derive title from Mr Clasper may be summarised as follows: (i) a transfer dated 13 August 1976 from Mr Clasper to Mr and Mrs Oriel; (ii) a transfer dated 16 February 1984 from Mr and Mrs Oriel to Helena Mary Blake (then, before her marriage, Helena Mary Foley); (iii) a transfer dated 23 October 1986 from Dr Blake to Peter Crome; (iv) a transfer dated 26 July 1994 from Professor Crome to Penny Fishlock; and (v) a transfer dated 22 January 2001 from Mrs Fishlock to Mr and Mrs Kent. The judge accepted the evidence of Dr Blake and of Professor Crome that the path had been used (without permission of the owners from time to time of No 58) to gain access to the back garden of No 56 during their ownership. He accepted, also, the evidence of use by Mrs Fishlock and her husband and by Mr and Mrs Kent; and he rejected evidence to the contrary given by witnesses called on behalf of Mr and Mrs Kavanagh. At paragraph 45 of his judgment the judge said this:

"On the evidence I find that the gate leading into number 56 was in position before August 1976 and that the gate and path were used as described by Ms Oriel and the Claimants' other witnesses thereafter".

14. No 58 Dovercourt Road was held under a building lease granted by the Governors to Messrs Williams on 12 November 1909 and an underlease granted by Messrs Williams to the first occupier (John Ward Daw) on 24 February 1910. The headlease has not survived; but the date (12 November 1909) appears from the acknowledgement, in the underlease, of the underlessee's right to production. The freehold of No 58 was transferred by the Governors on enfranchisement to the then underlessees, Ernest Dennis Reddin and his wife, Rose Emily Reddin, on 11 October 1976. Mr and Mrs Kavanagh derive title from Mr and Mrs Reddin. They acquired No 58 by a transfer dated 30 June 1995 from Edith Hargreaves, as executor of Graeme Harry Edwards. Mr Edwards had himself purchased from Mr and Mrs Reddin in 1985. The judge heard evidence from Mrs Caffrey, the daughter of Mr and Mrs Reddin, and from Mrs Hargreaves; but, as I have said, he did not accept that evidence where it was in conflict with the evidence given by the witnesses called on behalf of Mr and Mrs Kent. There is no appeal from the finding of fact made by the judge as to the continuous and apparent use of the path, from August 1976, to gain access to the back garden of No 56.
15. Nevertheless, the judge was not satisfied that the user had been as of right throughout the whole period from August 1976 until the commencement of these proceedings in February 2003. He made an important finding of fact as to a conversation between Mrs Kavanagh and Mrs Fishlock in July and August 1995. At paragraphs 47 and 48 of his judgment the judge set out Mrs Kavanagh's account of that conversation:

"We moved into No 58 on the day of completion, namely 30^th June 1995. The first or second week-end after we moved in we met our neighbours at number 56, Mr and Mrs Fishlock, over the boundary hedge at the front of our properties. Mrs Fishlock said, 'Is it all right if we continue to use the passageway, we were worried that you were going to move your gate forward'. She was referring to the wooden gate across the width of the passageway [giving access to the back garden of No 58] which can be opened from the passageway by punching in a security code. If we had moved it forward towards the road their gate in the boundary fence [giving access to the back garden of No 56] would have opened into our back garden. I remember being taken aback by her question as I simply did not know what she was talking about. Because of this I believe it is more likely than not that this conversation with Mrs Fishlock was the first time I became aware that there was a gate allowing the owners of number 56 access to the passageway. We said we had no plans to move the security gate forward and did not mind them using the passageway.

A few weeks later though, having thought it over, I told Mrs Fishlock that I was unhappy with unrestricted use of the passageway principally for reasons of security.

Mrs Fishlock understood all my concerns and promised she would ask me whenever she wanted to use the passageway. She asked whether the window cleaner could use the passageway when he came to clean the rear windows [of] the properties and also whether the gardener she employed at the time could use it, both of which I agreed to, but on every other occasion she came to knock at our front door whenever she or anyone else wanted to use the passageway. Mrs Fishlock once had a delivery to her back garden and on another occasion asked for permission for painters to use the passageway in order to have access to the rear of the house, but in general needed to use the passageway on very few occasions."

16. Mrs Fishlock denied that she had promised to ask permission whenever she wanted to use the pathway. But the judge accepted the substance of Mrs Kavanagh's evidence. He said this (at paragraph 60 of his judgment):

"On the balance of probabilities, I accept the evidence of Mrs Kavanagh that the alleged conversation in 1995 took place, or conversations substantially to that effect. I do not accept that on every occasion when the path was used by Mrs Fishlock or her visitors permission was asked. To that extent, there was an element of exaggeration in Mrs Kavanagh's evidence, but on the central point as to whether the conversation took place in 1995 I find in favour of the Defendants. "

These proceedings

17. As I have said, Mr and Mrs Kent purchased No 56 in January 2001. These proceedings were commenced on 18 February 2003 by the issue of a claim form in the Lambeth County Court. Mr and Mrs Kent sought a declaration that the true position of the boundary between No 56 and No 58 Dovercourt Road lay along the mid-line of the pathway. By amendment to the particulars of claim made on 30 May 2003, they sought, in addition, a declaration that they, as owners of No 56, were entitled to a right of way on foot over that part of the pathway within the title of No 58. By their defence and counterclaim, served on 8 May 2003 and amended on 8 July 2003, Mr and Mrs Kavanagh asserted that the whole width of the pathway was included in their title (or, in the alternative, that whatever title the owners of No 56 might have had to part of the pathway had been extinguished by adverse possession), a declaration to that effect and rectification of the claimants' title at HM Land Registry so as to exclude any part of the pathway. They denied that the claimants had any right to use the pathway; and sought an injunction restraining trespass.
18. The judge recorded, at paragraph 19 of his judgment, that it was conceded by counsel on behalf of the defendants, in the course of his closing submissions, that the boundary between the two properties – as defined by the headleases granted by the Governors, the underlease (or underleases) granted by Messrs Williams and the transfers on enfranchisement in 1976 – did lie along the mid-line of the pathway. The judge accepted that concession, which (as he said) accorded with the view he had formed. Nevertheless, it will be necessary (later in this judgment) to explain why counsel was right to make the concession that he did. But the concession was made subject to the contention that the claimants' paper title had been extinguished by adverse possession. At paragraph 25 of his judgment the judge rejected that contention. He gave effect to the concession and to his conclusion by the declaration in paragraph 1 of his order: the boundary between the two properties lies along the mid-line of the pathway. There is no challenge to that declaration.
19. The claim to a right of way "on foot for themselves and their licensees at all times and for all purposes connected with the use of No 56 as a dwellinghouse to pass and repass over that part of the pathway not within the freehold title of No 56 (subject to a like right in favour of the owners of No 58 over that part of the pathway within the freehold title of No 56)" was advanced on the various grounds set out in paragraph 11B of the amended particulars of claim. Those are: "(i) By implication in and from the lease of December 1909 and/or the conveyance of 14^th May 1976 by reason of the common law doctrine of non-derogation from grant and/or the rule in Wheeldon v Burrows; (ii) By implication in and from the lease of December 1909 and/or in the conveyance of 14^th May 1976 by reason of section 62 of the Law of Property Act 1925; (iii) By prescription and/or the doctrine of lost modern grant by reason of 20 years uninterrupted user as of right by the Claimants and their predecessors in title, from 1976 onwards; (iv) By necessity." In that context "the lease of December 1909" is a reference to the building lease granted by the Governors to Messrs Williams on 17 December 1909.
20. The judge rejected prescription as a basis for the right of way claimed. He was bound to do so in the light of his finding that, in 1995 Mrs Fishlock had asked permission to use the pathway. User as of right by one freehold owner against another – which is essential to the acquisition of a prescriptive right - could not have commenced before the properties were enfranchised 1976. Until enfranchisement the freeholds were in common ownership. The judge said this, at paragraph 61 of his judgment:

" . . . the prescription claim fails. Perhaps, in 1995, Mrs Fishlock was not entirely confident that there was a right of way. There was no formal documentary proof that there was a right. Perhaps, as an act of good neighbourliness, and realising that the use of the way might cause some inconvenience to the Kavanaghs, she asked permission. Whatever the reason, it would have conveyed to the mind of Mr and Mrs Kavanagh that the path was being used by the Fishlocks as a matter of permission and not as a matter of right."

The judge's conclusion that the effect of the conversations in July and August 1995 "rendered precarious what had been the previous 19 years user as of right" is challenged by the respondents.

21. The judge rejected, also, the claim that a right of way over the pathway was conferred by the general words to be implied into the transfer of 14 May 1976 by the general words of section 62 of the Law of Property Act 1925. Section 62 is in these terms, so far as material:

"(1) A conveyance of land shall be deemed to include and shall by virtue of this Act operate to convey with the land all . . . ways, . . . liberties, privileges, easements rights and advantages whatsoever, appertaining or reputed to appertain to the land, . . . , or, at the time of the 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 . . . ways, passages . . . liberties, privileges, easements, rights and advantages whatsoever, appertaining or reputed to appertain to the lands, houses or other buildings conveyed, or any of them, or any part thereof, or, at the time of the conveyance, demised occupied, or enjoyed with, or reputed or known as part or parcel of or appurtenant to the land, houses, other buildings conveyed, or any of them, or any part thereof."

22. The judge held that the general words could not assist the claimants because there was no evidence that the pathway was in use as access to the back garden of No 56 at the time of the transfer. He said this, at paragraph 63 of his judgment:

"I consider that the gate did exist well before 1976. After 1930 access through the house or garage of number 56 into the back garden would have been inconvenient, at any rate if materials or large objects had to be taken through. It seems likely that the gate into the rear of number 56 was installed by some arrangement with the lessees of number 58 after 1930. The arrangement, whatever it was, has been lost. Whilst I can assume that the gate was there well before 1976, I cannot assume that the path was being actually enjoyed as a way at the date of the transfer of 14^th May 1976. Although I have rejected the evidence of Mrs Caffrey, the evidence of user from Ms Oriel goes back only to August 1976. It is not open to me to presume that the path was being actually enjoyed or reputed to be enjoyed in May 1976, when the Oriels were not living at number 56."

23. The judge's conclusion that the general words in section 62 of the 1925 Act do not assist the claimants is challenged by respondents' notice. It is said that, even if the judge was right to hold that he could make no assumption as to use of the pathway before August 1976, section 62(2) of the Act has the effect that a right of way over that half of the pathway not within the ownership of No 56 would have been conveyed as a way, passage, privilege or right either appertaining or reputed to appertain to No 56 or as appurtenant to No 56.
24. The judge did not address, in terms, the claim based on necessity. We were told that that claim was not pursued before him at the trial. The decision not to pursue a claim based on necessity was, if I may say so, plainly correct. At paragraph 13 of his judgment the judge expressed himself as "confident" that "the lessee of number 56 could, at least until 1930, have gained access from his front garden to his rear garden without going through the house or going onto the pathway at the side of number 58". From 1930 until 1988 access to the back garden could be obtained through the garage. There was no necessity for a right of way over the pathway in 1976.
25. But, having rejected the claims based on prescription and on the general words implied by section 62 of the 1925 Act, the judge upheld the claim on the basis of non-derogation from grant or the rule in Wheeldon v Burrows (1879) 12 Ch D 31. His reasoning is set out at paragraphs 64 to 68 of his judgment:

"64. That leaves implied grant. It appears to me that the principle of Wheeldon v Burrows (1879) 12 Ch D 31 applies. There was, in May 1976, a gate leading into the rear of number 56 and the pathway was obviously a means of access to and from that gate. Moreover, after the garage was built by Mr Tait [in 1930] it was necessary for the reasonable enjoyment of number 56 to have a right of way on foot over the path to get to the small garden at the rear and also to carry out any necessary maintenance to the rear of the house.

65. It is no answer to say that access could be gained through the house or the garage. There are many examples in the decided cases where a right of way has been implied in such a case on these facts – see Goldberg v Edwards [1950] Ch 247, Brown v Alabaster (1888) 37 Ch D 490, Nicholls v Nicholls (1889) 81 LT 811, Donnelly v Adams [1905] 1 Irish Reports 154.

66. During his closing submissions I put this point to [counsel for the defendants]. He cited the existence of the underlease of number 56 and submitted that where the vendor of the quasi dominant land and quasi servient land is not in possession of the quasi servient land but has let it out to a third party, the principle of Wheeldon v Burrows has no application. Clearly the implied right of way, if it arises, cannot bind the lessee, or under-lessee, of the quasi servient land, but why should it not bind the vendor and his successors in title when the lease of the quasi-servient land falls in? When the lease merges on a sale of the servient land the purchaser will then be bound, as was the vendor himself.

67. The point arose for consideration in Cable v Bryant [1908] 1 Ch 259, a case of a right to ventilation enjoyed by land let to a tenant. It was argued that there could be no implied easement over adjoining property of a lessor where the adjoining property was already let out. It would be an easement in reversion. Neville J avoided a decision on the point by resort to the doctrine of non-derogation from grant, which prevented the lessor and his successors from interfering with the lessee's use of the dominant land after the lease of the servient land had fallen in.

68. In my judgment there is no legal impediment to the principle of Wheeldon v Burrows applying to this case. The facts clearly bring the principle into play and create an easement of way over the path within the title of number 58 for the benefit of number 56. It may be the case that the right could not have been exercised against Mr and Mrs Reddin, who were the lessees of number 58. That would have depended upon what arrangement existed between the lessees of both properties concerning the gate, but the Governors, as freeholders of number 58, were bound by the implied grant. The Reddins, as successors in title to the freehold, were also bound, as were their successors in title. The merger of the lease of number 58, at any rate after the Reddins had sold number 58, removed any legal obstacle to the exercise of the right of way. In my judgment the right of way existed as a legal easement even before the Reddins' lease was extinguished. The freehold of number 58 was a legal estate notwithstanding the existence of a lease – see the Law of Property Act 1925, s.1(1)(a). An easement granted out of that estate would therefore exist as a legal easement notwithstanding the existence of a prior leasehold interest – see s.1(2)(a). If I am wrong in holding that it was a legal easement, then it would have existed in any event as an equitable easement."

26. The first of the two propositions which, together, have become known as "the rule in Wheeldon v Burrows" was stated by Lord Justice Thesiger, in that case, in these terms (12 Ch D 31, 49):

" . . . on the grant by the owner of a tenement of part of that tenement as it is then used and enjoyed, there will pass to the grantee all those continuous and apparent easements (by which, of course, I mean quasi easements), or, in other words, all those easements which are necessary to the reasonable enjoyment of the property granted, and which have been and are at the time of the grant used by the owners of the entirety for the benefit of the part granted."

27. There is an obvious tension – which the judge did not find it necessary to confront or resolve – between the finding at paragraph 63 of the judgment (in the context of the claim based on section 62 of the 1925 Act) that it could not be assumed "that the path was being actually enjoyed as a way at the date of the transfer of 14^th May 1976" and the findings at paragraph 64 (in the context of the claim based on the rule in Wheeldon v Burrows) that "the pathway was obviously a means of access to and from [the] gate" and that "after the garage was built by Mr Tait it was necessary for the reasonable enjoyment of number 56 to have a right of way on foot over the path to get to the small garden at the rear and also to carry out any necessary maintenance to the rear of the house". It is difficult to see why, if access over the pathway was necessary for the reasonable enjoyment of No 56 – and was not impeded – it was not reasonable to assume that that "obvious means of access" was not being used. Alternatively, if it were not possible to assume that the pathway was actually being used in May 1976, it is difficult to see how the requirement (if the principle in Wheeldon v Burrows is to apply) that the quasi-easement is "at the time of the grant used by the owners of the entirety for the benefit of the part granted" could be satisfied.

This appeal

28. The judge refused permission to appeal. The appeal is brought with permission granted by this Court (Lord Justice Jonathan Parker) on 24 June 2005. The grounds of appeal are, first, that the rule in Wheeldon v Burrows can have no application at all on a conveyance made on enfranchisement under the Leasehold Reform Act 1967. Second, that the rule can have no application on a conveyance by a landlord of the freehold to his tenant so as to convert into an easement a right enjoyed by the tenant over the land of another tenant of the same landlord in circumstances where (i) there is no evidence that the landlord has consented to the exercise of that right or (ii) where it has not been shown that the right was being exercised at the time when the relevant conveyance was made. And, as I have said, the respondents seek to uphold the judge's conclusion not only on the ground which he adopted but also on the other grounds set out in their respondents' notice.

The Leasehold Reform Act 1967

29. Before addressing those grounds it is convenient to set out the relevant provisions of the Leasehold Reform Act 1967, as they were in 1976. The right to enfranchise is conferred by section 1 of the Act on a tenant holding under a long tenancy at a low rent. The right is exercisable by the tenant giving written notice ("a tenant's notice") to the landlord of his desire to have the freehold. Section 8 imposes the obligations which flow from such a notice. So far as material the section is in these terms:

"(1) Where a tenant of a house has under this Part of this Act a right to acquire the freehold, and give to the landlord written notice of his desire to have the freehold, then except as provided by this Part of this Act the landlord shall be bound to make to the tenant, and the tenant to accept, (at the price and on the conditions so provided) a grant of the house and premises for an estate in fee simple absolute, subject to the tenancy and to tenant's incumbrances, but otherwise free of incumbrances.

(2) For the purposes of this Part of this Act "incumbrances" includes rent-charges and, subject to subsection (3) below, personal liabilities attaching in respect of the ownership of land or an interest in land though not charged on that land or interest, and "tenant's incumbrances" includes any interest directly or indirectly derived out of the tenancy, and any incumbrance also on any interest reversionary on the tenancy).

(3) . . ."

30. Section 9 of the 1967 Act provides for the determination of the price payable by the tenant to the landlord. Section 10 is concerned with the content and effect of the conveyance to be executed on enfranchisement. Subsections (1) and (2) are in these terms (so far as material):

"(1) Except for the purpose of preserving or recognising any existing interest of the landlord in tenant's incumbrances or any existing right or interest of any other person, a conveyance executed to give effect to section 8 above shall not be framed so as to exclude or restrict the general words implied in conveyances under section 62 of the Law of Property Act 1925, . . .

(2) As regards rights of any of the following descriptions, that is to say, -

(a) rights of support for any building or part of a building;

(b) rights to the access of light and air to any building or part of a building;

(c) rights to the passage of water or of gas or other piped fuel, or to the drainage or disposal of water, sewage, smoke or fumes , or to the use or maintenance of pipes or other installations for such passage, drainage or disposal;

(d) rights to the use or maintenance of cables or other installations for the supply of electricity; for the telephone or for the receipt directly or by landline of visual or other wireless transmissions

a conveyance executed to give effect to section 8 above shall by virtue of this subsection (but without prejudice to any larger operation it may have apart from this subsection) have effect -

(i) to grant with the house and premises all such easements and rights over other property, so far as the landlord is capable of granting them, as are necessary to secure to the tenant as nearly as may be the same rights as at the relevant time were available to him under or by virtue of the tenancy or any agreement collateral thereto, or under or by virtue of any grant, reservation or agreement made on the severance of the house and premises or any part thereof from other property then comprised in the same tenancy; and

(ii) to make the house and premises subject to all such easements and rights for the benefit of other property as are capable of existing in law and are necessary to secure to the person interested in the other property as nearly as may be the same rights as at the relevant time were available against the tenant under or by virtue of the tenancy or any other agreement collateral thereto, or under or by virtue of any grant, reservation or agreement made as is mentioned in paragraph (i) above."

The "relevant time" in that context is the time when the tenant gives notice of his desire to have the freehold – section 37(1) of the Act.

31. Section 10(2) of the 1967 Act does not extend to rights of way. The Act makes provision for rights of way to be the subject of express grant or reservation in the conveyance. Section 10(3) of the Act is in these terms:

"(3) As regards rights of way, a conveyance executed to give effect to section 8 above shall include-

(a) such provisions (if any) as the tenant may require for the purpose of securing to him rights of way over property not conveyed, so far as the landlord is capable of granting them, being rights of way which are necessary for the reasonable enjoyment of the house and premises as they have been enjoyed during the tenancy and in accordance with its provisions; and

(b) such provisions (if any) as the landlord may require for the purpose of making the property conveyed subject to rights of way necessary for the reasonable enjoyment of other property, being property in which at the relevant time the landlord has an interest, or to rights of way granted or agreed to be granted before the relevant time by the landlord or by the person then entitled to the reversion on the tenancy."

Section 10(4) contains similar provisions in relation to restrictive covenants.

32. The provisions in section 10 of the 1967 Act may be seen as those which the legislature thought necessary to give effect to the underlying obligations imposed by section 8(1). The statutory scheme includes the following features:

(1) The conveyance executed to give effect to the tenant's right to enfranchise will operate to convey with the freehold the rights and easements which are within the general words of section 62(1) or (2) of the Law of Property Act 1925 – save as excepted by section 10(1) of the 1967 Act.

(2) The conveyance will have effect, without express words, (i) to grant with the freehold (in so far as lies within the power of the landlord) rights of support, etc. (within section 10(2) of the 1967 Act) which would not otherwise be conveyed by the general words in section 62 of the 1925 Act and (ii) to reserve out of the freehold rights of support, etc. (within section 10(2)) as (in the case of the grant) are necessary to secure to the tenant as nearly as may be the same rights as were available to him under the tenancy and (in the case of the reservation) as are necessary to secure for the benefit of other property as nearly as may be the same rights as were available against the tenant by virtue of the tenancy.

(3) Section 10(2) has no application to rights of way.

(4) The parties are entitled to require there to be included in the conveyance an express grant or reservation (as the case may be) of rights of way necessary for the reasonable enjoyment of the house and premises conveyed and of other (retained) property in which the landlord has an interest.

The Leasehold Reform (Enfranchisement and Extension) Regulations 1967

33. Sections 10(3) and 10(4) of the 1967 Act must be read with section 22(2) and the regulations were made under that section by the Leasehold Reform (Enfranchisement and Extension) Regulations 1967 (SI 1879/1967). Section 22(2) is in these terms, so far as material:

"Where a tenant having a right under this part of this Act to acquire the freehold . . . gives the landlord notice of his desire to have it, then except as otherwise provided by this Act, the procedure for giving effect to the notice, and the rights and obligations of all parties in relation to the investigation of title and other matters arising in giving effect to the notice, shall be such as maybe prescribed by regulations . . . and subject to or in the absence of provision made in such regulations as regards any matter shall be as nearly as may be the same as in the case of a contract of sale . . . freely negotiated between the parties"

Regulation 2 of the Regulations provides that:

"In any transactions undertaken to give effect to a tenant's notice of his desire to have a freehold the landlord and the tenant shall, unless they otherwise agree, be bound by the conditions laid down in Part I of the Schedule to these Regulations as if the conditions formed part of a contract between them."

34. Condition 5 in Part I of the schedule to the 1967 Regulations makes provision for the parties to require the inclusion in the conveyance of rights of way (in accordance with section 10(3) of the Act) or restrictive covenants (in accordance with section 10(4)). The condition is in these terms:

"(1) When or at any time after giving his notice in reply to the tenant's notice [of his desire to have the freehold] the landlord may by notice in writing given to the tenant require him within 4 weeks to state what rights of way and provisions concerning restrictive covenants he requires to be included in the conveyance in accordance with section 10 of the Act.

(2) At any time when under condition 3 the tenant would be entitled to require the landlord to deduce his title he may by notice in writing given to the landlord require him within 4 weeks to state what rights of way over the property and provisions concerning restrictive covenants he requires to be included in the conveyance in accordance with the provisions of the Act.

(3) A notice under this condition shall contain a statement as to the rights of way and provisions concerning restrictive covenants required by the person giving the notice to be included in the conveyance.

(4) If the tenant does not comply with a notice given under this condition within the time specified or, where no such notice has been given, does not communicate to the landlord a statement of the rights and provisions he requires to be included in the conveyance when or before serving a notice on the landlord under condition 3, the tenant shall be deemed to require no rights of way or provisions concerning restrictive covenants to be included in the conveyance.

(5) If the landlord does not comply with a notice given under this condition within the time specified or, where no such notice has been given, does not communicate to the tenant a statement of the rights and provisions he requires to be included in the conveyance at or before the time fixed for compliance with a notice served on him under condition 3, the landlord shall be deemed to require no rights of way or provisions concerning restrictive covenants to be included in the conveyance."

35. Condition 5 in the schedule to the 1967 Regulations is intended (at the least) to provide a convenient procedure for ensuring that the conveyance on enfranchisement does include the rights which each party is entitled, under section 10(3) of the Act, to require to be included in that conveyance. But I am not persuaded that the condition has any wider effect. In particular, although failure to comply with the procedure for which condition 5 provides will normally lead to the result that the conveyance does not include the rights which a party would have been entitled to require to be included – with the result that the party will not, thereafter, be able to rely on the express terms of the conveyance as the source of rights which he may wish to enforce – there is no reason to think that the legislature intended that the party would not be able to rely on the general words which the conveyance is deemed to include pursuant to section 62 of the 1925 Act.

Does the rule in Wheeldon v Burrows have any application to a conveyance on enfranchisement?

36. As I have said, the first ground of appeal is that the principle which has become known as "the rule in Wheeldon v Burrows" can have no application to a conveyance executed to give effect to the obligation imposed by section 8(1) of the 1967 Act. It is said, correctly, that the principle is based on the proposition that a man does not intend to derogate from his grant. As Lord Wilberforce observed in the consolidated appeals in Sovmots Investments Limited v Secretary of State for the Environment and others, and Brompton Securities Limited v Secretary of State for the Environment and others [1979] AC 144, 168H:

"He cannot grant or agree to grant land and at the same time deny to his grantee what is at the time of the grant obviously necessary for its reasonable enjoyment."

Put shortly, it is said that an intention not to derogate from grant cannot be imputed to a landlord whose obligation to convey the freehold is founded on an agreement which was imposed upon him by statute. There is no basis upon which to impute to an involuntary transferor an intention to grant any larger or further rights than those the statute expressly requires.

37. At first sight the submission finds support in the speeches of four of the members of the House of Lords in the Sovmots appeals. Lord Wilberforce rejected the submission that the rule in Wheeldon v Burrows could apply in a case where the conveyance was made pursuant to a compulsory purchase order (ibid, 168H-169A):

"To apply this to a case where a public authority is taking from an owner his land without his will is to stand the rule on its head: it means substituting for the intention of a reasonable voluntary grantor the unilateral, opposed, intention of the acquirer."

Lord Edmund-Davies took the same view. After setting out the familiar passage in the judgment of Lord Justice Thesiger in Wheeldon v Burrows (1879) 12 Ch D 31, 49, he said this ([1979] AC 144, 175E-F):

"The basis of such propositions is, as Lord Parker of Waddington stressed in Pwllbach Colliery Co Ltd v Woodman [1915] A.C. 624, 646, that "The law will readily imply the grant or reservation of such easements as may be necessary to give effect to the common intention of the parties to a grant of real property…" But there is no common intention between an acquiring authority and the party whose property is compulsorily taken from him, and the very basis of implied grants of easements is accordingly absent."

Lord Keith of Kinkel (with whose speech Lord Fraser of Tullybelton agreed in all respects) expressed the view (ibid, 183G) that both the rule in Wheeldon v Burrows and the provisions of section 62 of the 1925 Act had "no place in compulsory purchase".

38. It is important to keep in mind, however, that the statutory scheme for giving effect to a compulsory purchase order – formerly in the Acquisition of Land (Authorisation Procedure) Act 1946 and now found in the Acquisition of Land Act 1981 – is not the same as that for giving effect to the right to enfranchise under the 1967 Act. In particular, there is nothing in the compulsory purchase legislation comparable to the provisions of section 5(3) of the 1967 Act:

"In the event of any default by the landlord or the tenant in carrying out the obligations arising from [a tenant's notice served under section 5(1)], the other of them shall have the like rights and remedies as in the case of a contract freely entered into."

Nor is there anything in the compulsory purchase legislation comparable to the provisions of section 22(2) of the 1967 Act, to which I have already referred:

". . . the rights and obligations of all parties . . . in relation to . . . matters arising in giving effect to [a tenant's notice] . . . subject to or in the absence of provision made by any such regulation [made by statutory instrument under that section] . . . shall be as nearly as may be the same as in the case of a contract for sale . . . freely negotiated between the parties."

As Lord Denning, Master of the Rolls observed in Byrnlea Property Investments Ltd v Ramsay [1969] 2 QB 253, 263H:

"Once the notice is given, both parties are bound just as they are by an ordinary contract."

39. For my part, I would reject the submission that the reasoning in the Sovmots appeal compels the conclusion that the rule in Wheeldon v Burrows can have no application to a conveyance executed to give effect to the obligation imposed by section 8(1) of the 1967 Act. The observations of Lord Keith of Kinkel in Sovmots ([1979] AC 144, 183F-G) - that neither the rule in Wheeldon v Burrows nor the provisions of section 62 of the 1925 Act had any place in compulsory purchase – cannot have been made with the 1967 Act in mind. Section 62 of the 1925 Act plainly does have a place in the scheme for enfranchisement under the 1967 Act – see section 10(1) of the 1967 Act.
40. Nevertheless, the application of the rule is subject to the express provisions of the statutory scheme; and, if the rule is to have any application, it must be capable of being applied in the factual context within which the scheme has effect.
41. It is pertinent to keep in mind that, in his classic statement of the rule (12 Ch D 31, 49), Lord Justice Thesiger identified two propositions. The first is that which I have already set out earlier in this judgment;

" . . . on the grant by the owner of a tenement of part of that tenement as it is then used and enjoyed, there will pass to the grantee all those continuous and apparent easements (by which, of course, I mean quasi easements), or, in other words, all those easements which are necessary to the reasonable enjoyment of the property granted, and which have been and are at the time of the grant used by the owners of the entirety for the benefit of the part granted."

The second proposition is that:

". . . if the grantor intends to reserve any right over the tenement granted, it is his duty to reserve it expressly in the grant."

42. As Lord Justice Thesiger accepted, the second proposition is subject to exceptions. In Cory v Davies [1923] Ch 95, Mr Justice P O Lawrence held that, notwithstanding the second proposition, he should imply reciprocal rights and reservations into leases granted by a common landlord in pursuance of a building scheme. It has been suggested that section 10(2)(ii) of the 1967 Act may, perhaps, be seen as a statutory exception in relation to the rights of support, etc, to which section 10(2) applies – see Hague on Leasehold Enfranchisement (4^th Edition, 2003) paragraph 6-22.
43. The two propositions which, together, comprise the rule (or rules) in Wheeldon v Burrows are confined, in their application, to cases in which, by reason of the conveyance (or lease), land formerly in common ownership ceases to be owned by the same person. It is in cases of that nature that, in order to give effect to what must be taken to be the common intention of the grantor and the grantee, the conveyance (or lease) will operate as a grant (for the benefit of the land conveyed) of such easements over the land retained by the grantor as are necessary to the reasonable enjoyment of the land conveyed. But, because the principle is founded on the common intention of the parties, the easements necessary to the reasonable enjoyment of the land conveyed are those which reflect (and, following separation of ownership, are needed to give effect to) the use and enjoyment of the land conveyed at the time of the conveyance and while that land and the retained land were in the common ownership of the grantor.
44. It is necessary to ask how far either of the two propositions which Lord Justice Thesiger identified in Wheeldon v Burrows can have any application in a case where, at the time of the conveyance, the land conveyed and the land retained, although in common ownership, were not in common occupation. In particular, can either of the two propositions have any application where the land conveyed was occupied by a tenant holding under a lease from the common owner. Assuming, for the moment, that the land is not conveyed to the tenant, there are, of course, two distinct questions: (i) what easements over the retained land pass with the conveyance of the freehold and (ii) what easements are reserved out of the land conveyed for the benefit of the retained land. The rights of the tenant over the land retained; and the rights of the grantor (as owner of the land retained) over the land held under the lease are unaffected by the conveyance. Prima facie, those rights will depend on the terms of the lease – but may include rights which passed to the tenant under the first rule in Wheeldon v Burrows when the lease was granted.
45. In the absence of an express grant, the answer to the first of those questions - what easements over the retained land pass with the conveyance of the freehold – turns, as it seems to me, not on any application of the first rule in Wheeldon v Burrows but on the operation of section 62 of the Law of Property Act 1925. Under section 62 a conveyance of land operates to convey with the land "all ways, easements, rights, and advantages whatsoever, appertaining or reputed to appertain to the land . . . or, at the time of conveyance, demised . . . or enjoyed with . . . the land". I can see no reason why those words are not apt to convey, with the freehold, rights of way over the retained land which are, at the time of the conveyance, enjoyed by the tenant in occupation of the land conveyed. For my part, I find that analysis more attractive than one which relies upon the first rule in Wheeldon v Burrows. It seems to me an unnecessary and artificial construct to hold that the grantor, as common owner and the landlord of the land conveyed, is himself using the rights over the retained land which his tenant enjoys under the lease.
46. In reaching that conclusion I have had regard to the observations of Lord Wilberforce in the Sovmots appeal ([1979] AC 144, 169B-C) that:

". . . section 62 does not fit this case. The reason is that when land is under one ownership one cannot speak in any intelligible sense of rights, or privileges, or easements being exercised over one part for the benefit of another. Whatever the owner does, he does as owner and, until a separation occurs, of ownership or at least of occupation, the condition for the existence of rights, etc., does not exist: see Bolton v Bolton (1879) 11 ChD 968, 970 per Fry J and Long v Gowlett [1923] 2 Ch 177, 189, 198, in my opinion a correct decision."

As Lord Wilberforce pointed out, there can be no sensible concept of rights over one part of land for the benefit of another part while the two parts are in common ownership and occupation. But, once there is a separation of occupation (because part of land in common ownership is held by a tenant under a lease) there is no conceptual difficulty. There may well be rights over the untenanted part of the land for the benefit of the tenanted part. If there are, those rights are within the wide compass of section 62 of the 1925 Act.

47. Section 62 of the 1925 Act cannot operate to reserve rights out of the land conveyed for the benefit of the land retained. The words of the section cannot be given that effect. Nor can assistance be found in Wheeldon v Burrows. As I have said, the second rule stated by Lord Justice Thesiger is to the contrary effect: "if the grantor intends to reserve any right over the tenement granted, it is his duty to reserve it expressly in the grant." The position under the general law, as it seems to me, is that a grantor who, on the conveyance of a part of his land which is subject to an existing tenancy (and over which he has rights of way reserved in the lease), wishes to reserve those rights out of the freehold which he conveys (so that he can continue to exercise them after the lease has determined) must do so by express words of reservation.
48. I turn, then, to consider the position where that part of the land in common ownership which is subject to the tenancy (say, plot A) is conveyed to the tenant on enfranchisement under the 1967 Act. What rights of way over the landlord's retained land (plot B) pass to the tenant with the conveyance of the freehold of plot A – in circumstances where the tenant has not required an express grant under section 10(3)(a) of the Act? The answer, as it seems to me, is the same as it would be under the general law. Section 62 of the Law of Property Act 1925 operates to convey with the freehold of plot A, rights of way over plot B which are, at the time of the conveyance, enjoyed by the tenant in occupation of plot A. If that is the correct analysis, then - in relation to the rights of support, etc. to which section 10(2) of the 1967 Act applies (but not, of course, in relation to rights of way) - section 10(2)(i) may be seen as supplementing the general law. That, in my view, gives proper effect to the words which appear in parenthesis in section 10(2): "(but without prejudice to any larger operation [the conveyance] may have apart from this subsection)".
49. The second question – what rights of way are reserved on the conveyance on enfranchisement of plot A for the benefit of plot B in circumstances where the landlord has not required an express reservation under section 10(3)(b) of the 1967 Act – must, I think, receive an answer which differs from that under the general law.
50. The underlying obligations imposed by section 8(1) of the 1967 Act require the landlord to make and the tenant to accept a grant for an estate in fee simple absolute "subject to the tenancy and to tenants' incumbrances, but otherwise free of incumbrances". In that context "tenant's incumbrances" includes "any interest directly or indirectly derived out of the tenancy, and any incumbrance on the tenancy or any such interest (whether or not the same matter is an incumbrance also on any interest reversionary on the tenancy)" – section 8(2) of the Act. It was accepted in argument – rightly in my view – that a right in the nature of an easement, reserved out of the leasehold interest at time when the tenancy was granted, would be a "tenant's incumbrance" for the purposes of section 8.
51. It is clear that the obligations imposed by section 8(1) of the 1967 Act admit of the reservation out of the freehold estate conveyed of rights equivalent to those which had been reserved out of the leasehold interest – section 10(3)(b). And, as it seems to me, it is proper to construe a conveyance executed to give effect to section 8 of the Act – whether or not it contains express words of reservation – as being "subject to the tenancy and to tenant's incumbrances". That, after all, is the extent of the obligation imposed on the landlord under the statutory contract. The common intention to be attributed to the parties is that the conveyance will give effect to that obligation; they are not to be taken to have intended that the landlord would grant an estate in fee simple absolute which was free from tenant's incumbrances.
52. If that is the correct approach, then - in relation to the rights of support, etc. to which section 10(2) of the 1967 Act applies - section 10(2)(ii) may be seen as a statutory exception to the second rule in Wheeldon v Burrows; in that the conveyance operates to reserve rights out of the property conveyed without the need for express words. But, to my mind, the better view is that the conveyance, executed in order to give effect to a statutory obligation, is not to be taken to convey more than the due performance of that obligation requires. Again, that seems to me to give proper effect to the words "(but without prejudice to any larger operation [the conveyance] may have apart from this subsection)".
53. It follows that - albeit for reasons which differ from those advanced in argument on behalf of the appellants – I would accept that the first of the propositions commonly referred to as "the rule in Wheeldon v Burrows" has no application to a conveyance executed to give effect to the obligation imposed by section 8(1) of the 1967 Act. The question whether any (and if so what) easements pass to the tenant under the conveyance of the freehold (in the absence of an express grant to give effect to section 10(3)(a) of that Act) turns on the operation of section 62 of the Law of Property Act 1925, supplemented (so far as necessary) by section 10(2)(i) of the 1967 Act. I would accept, also, that the application of the second of the two propositions within the rule is limited (i) by the need to construe the conveyance executed so as to give effect to the common intention of the parties that the estate conveyed is an estate in fee simple subject to tenant's incumbrances and (ii) (so far as necessary) by section 10(2)(ii) of the 1967 Act.

The effect of a conveyance on the enfranchisement of one part of land in common ownership on the tenant of a retained part of that land

54. The second ground of appeal is that the rule in Wheeldon v Burrows cannot have effect, on a conveyance by a landlord of the freehold to one tenant on enfranchisement, so as to convert into an easement a right enjoyed by that tenant over the land of another tenant of the same landlord in circumstances where (i) there is no evidence that the landlord has consented to the exercise of that right or (ii) where it has not been shown that the right was being exercised at the time when the relevant conveyance was made. It follows from the views that I have already expressed that I accept that proposition. In particular, I accept that the first limb of the rule in Wheeldon v Burrows has no application on the enfranchisement of part of land in common ownership.
55. But that, of course, does not provide an answer to the question: what is the effect of a conveyance on the enfranchisement of one part of land in common ownership (plot A) on the retained part of that land (plot B), if plot B is tenanted. I have set out the reasons why I take the view (i) that the operation of section 62 of the Law of Property Act 1925, supplemented (so far as necessary) by section 10(2)(i) of the 1967 Act, gives to the conveyance the effect of a grant, with the freehold of plot A, of easements over the freehold of plot B and (ii) that the true construction of the conveyance in the light of the underlying obligation imposed by section 8(1) of the 1967 Act and (so far as necessary) the operation of section 10(2)(ii) of that Act gives to the conveyance the effect of reserving out of the freehold of plot A easements for the benefit of plot B; but there is no reason why the conveyance of plot A should subject the leasehold interest in plot B to any incumbrances (and, in particular, to any easements) to which it would not otherwise be subject in the absence of that conveyance. Nor, save in so far as section 10(2)(ii) of the 1967 Act has that effect, is there any reason why the conveyance of plot A should confer on the tenant of plot B any rights (and, in particular, any easements) over plot A.
56. Nevertheless, in a case where plot A and plot B have been held under tenancies from a common owner – and, in particular, where those tenancies were granted under a building scheme – it may well be that the tenant of each plot has rights over the leasehold interest in the other. In such a case the rights may well be reciprocal; as, for example, where the plots share a common access, part of which is leased with each holding. The position on the enfranchisement of one plot (plot A) may then, I think, be summarised as follows: (i) the former tenant of plot A will continue to enjoy the rights over the leasehold interest of plot B which he enjoyed as tenant of plot A, (ii) the former tenant of plot A will enjoy those rights over the freehold of plot B which are conveyed to him with the freehold of plot A by the operation of section 62 of the 1925 Act and section 10(2)(i) of the 1967 Act, (iii) the tenant of plot B will continue to enjoy the rights over plot A to which he is entitled under his lease - because those rights will be tenant's incumbrances to which the freehold of plot A will be subject – and (iv) the landlord of plot B (the former common owner) will continue to enjoy the rights over plot A which were reserved on the conveyance of that plot. Put more shortly: the former tenant of plot A will continue to enjoy the rights over plot B which he enjoyed under his lease (but in respect of both the freehold and the leasehold interests in plot B); and the tenant of plot B will continue to enjoy the rights over plot A which he has enjoyed under his lease (but in respect of the freehold as well as the former leasehold interest in plot A).

The position on the subsequent enfranchisement of the retained part.

57. It remains to consider the position on the subsequent enfranchisement of plot B. That position may, I think, be stated shortly. The conveyance of plot B to the former tenant operates to convey with the freehold the rights over plot A which had been reserved to the former common owner on the conveyance of plot A – section 62 of the 1925 Act. The conveyance of plot B is subject to the rights which the former tenant of plot A already enjoys – because the former common owner cannot convey free from those existing rights.
58. The effect, therefore, is that - after enfranchisement of both plots A and B – the former tenants of those plots (as owners of the freehold) continue to enjoy the same rights over each others' plots as they did while they were each tenants of those plots. If they were entitled to reciprocal easements under the former leases, those easements are (in effect) enfranchised. They subsist for the benefit of (and as a burden on) the respective freehold interests. And it is immaterial which of the two plots was the first to be enfranchised.

Were the plots entitled to reciprocal rights of way under the former leases.

59. With these considerations in mind, the outcome of the present appeal turns, as it seems to me, on whether plots 56 and 58 Dovercourt Road were entitled, under the leases granted in 1909, to reciprocal rights of way over the pathway which lies between them. If they were so entitled, then it will follow from the analysis which I have set out in this judgment that each will enjoy a right of way over that half of the pathway which is in the ownership of the other. But if either plot was not entitled, under the lease upon which it was held at the time of enfranchisement, to a right of way over the other half of the pathway, then that plot did not acquire a right of way over the pathway when the two plots were enfranchised in 1976. The reason is that the other plot was not, then, subject to a tenant's incumbrance. In such a case, the right of way could only be acquired (if at all) by prescription since 1976.
60. In the course of argument in this Court, that analysis came to be accepted by counsel for the appellants. Although it was not in dispute that his clients (as owners of No 58 Dovercourt Road) were entitled to a right of way over that half of the pathway which was in the ownership of the respondents (as owners of No 56), it was pertinent to ask how that right had arisen. Counsel was minded, at first, to submit that the appellants enjoyed the right of way over the respondents' land by reason only of prescriptive use since 1976. But, after further consideration, he abandoned that position. He contended that No 58 had been entitled to a right of way over No 56 by virtue of the 1909 lease; and that, on enfranchisement of No 58 in 1976, the right of way had become annexed to the freehold. That, he said, was the effect of the general words in section 62 of the 1925 Act. And he accepted – as he was bound to do – that, if the general words had that effect on the enfranchisement of No 58, they did so because the right of way had been reserved (as a tenant's incumbrance) out of the freehold of No 56 on the enfranchisement of that plot.
61. Nevertheless, it was denied that a comparable analysis supported the respondents' claim to a right of way over that half of the path which is in the ownership of the appellants. Counsel for the appellants contended that, although No 58 had been entitled to a right of way over No 56 by virtue of the lease of No 58, there had been no reciprocal right in favour of No 56. That, as it seems to me, is a position which cannot be maintained on the facts of this case.
62. I have explained, earlier in this judgment, that the appellants (Mr and Mrs Kavanagh) had asserted in their defence and counterclaim that the whole width of the pathway was included in their title; but that that assertion had been abandoned at the trial. It was conceded, at trial, that the boundary between the two properties – as defined by the headleases granted by the Governors, the underlease (or underleases) granted by Messrs Williams and the transfers on enfranchisement in 1976 – did lie along the mid-line of the pathway. That concession was correctly made. It is plain from the plans annexed to the headlease of No 56 (dated 17 December 1909) and the underlease of No 58 (dated 24 February 1910) that the common boundary between the two properties is straight: there is no deviation from the straight line at the end of the passageway. It is plain, also, that neither the northern flank wall of No 58 nor the fence (and, subsequently, the southern wall of the garage) on No 56 are on the common boundary: each is a short distance from it. The position is shown clearly on the Land Registry map dated 4 March 1910 in respect of title No 170424 – the leasehold title under which No 58 was held prior to 1976. The contemporary evidence is unequivocal. It leads to the conclusion that the Surveyor to the Governors was wrong in 1930; and that the plan upon which his report was based – which is not a title plan – cannot be relied upon to define the common boundary.
63. The position, therefore, is that, at the time when headleases of the two plots were granted at the end of 1909, the landlord (as common owner) chose to include in each lease one half of the pathway which lay between the two properties. Given that the whole width of the pathway was and is only three feet, it must have been appreciated that the pathway could not be used by the lessee of either plot without passing over the half which was included in the other lease; and it must have been the intention to the parties to those leases that that is how the pathway would be used. In those circumstances there was, as it seems to me, no difficulty in implying into each lease the necessary grant and reservation of reciprocal rights of way so as to enable the pathway to be used as intended. If authority for that course be needed, it can be found in the judgment of Mr Justice P O Lawrence to which I have already referred – Cory v Davies [1923] 2 Ch 95, 108-110.
64. Counsel for the appellants accepts that the necessary grant and reservation can be implied in the 1909 leases so as confer on the tenants of No 58 a right of way over No 56; but he submits that there is no basis for reciprocity. He points out, correctly, that the configuration and layout of the two plots was such that, in 1909, access to the rear of plot No 56 could be obtained without using the pathway. But that, as it seems to me, provides no answer. If it were the intention of the parties, in 1909, that the tenant of plot No 58 should have exclusive use of the pathway, then the obvious course was to include the whole of the pathway in the lease of No 58. The reason for including any part of the pathway in the lease of No 56 must have been that the tenant of No 56 should be able to use it. No other reason has been suggested; and, as it seems to me, no other reason could be suggested. And, as I have explained, it was the policy of the Governors that access should be obtained to the rear of each pair of semi-detached houses on the estate. The necessary inference must be that pathway was there for that purpose; notwithstanding that, on one view, it might not have been needed to gain access to the rear of plot No 56 at the time when the plots were laid out.
65. It follows that I would hold that the tenants of plot No 56 did enjoy a right of way, under the lease of 17 December 1909, over that half of the pathway which had been included in the lease of plot No 58 when the headlease of that plot was granted a few weeks earlier (on 12 November 1909). The underlease of plot No 58, granted on 24 February 1910, was subject to that right of way. And it follows that I would hold that the respondents enjoy that right as owners of No 56 Dovercourt Road following enfranchisement of the two properties in 1976.

Conclusion

66. I would dismiss the appeal on the ground that the judge was correct to uphold the claim to a right of way over the pathway – albeit that he reached that end by a route which I have not found it possible to follow. The true basis of the claim was, I think, that advanced in combination at paragraphs 11B(i) and (ii) of the amended particulars of claim: the right of way arose by implication in and from the lease of December 1909 (by reason of the common law doctrine of non-derogation from grant) and the conveyance of 14 May 1976 (by reason of section 62 of the Law of Property Act 1925).
67. That conclusion makes it unnecessary for me to attempt to resolve the apparent inconsistency between the judge's finding (at paragraph 63 of his judgment) that it could not be assumed that the path was actually being enjoyed as a way at the date of the transfer in May 1976 and his finding (at paragraph 64) that the pathway was obviously a means of access to and from the gate into the back garden of No 56. It is enough that the right of way was, at the time of the 1976 conveyance, an easement demised with No 56 under the terms of the 1909 lease. It is unnecessary, also, for me to express any view whether the judge was correct to find – on the basis of the conversations with Mrs Fishlock on 1995 – that use of the pathway, at that date, was precarious. On a true analysis the user was as of right under a grant.

Lord Justice Longmore:

68. I agree.

Mr Justice Lewison:

69. I have had the advantage of reading in draft the judgment of Lord Justice Chadwick. I agree both with his conclusion and with his reasons. I add some short observations of my own in deference to the careful argument of Mr Harpum.
70. The social policy underlying the Leasehold Reform Act 1967 is that "the land belongs in equity to the landowner and the house belongs in equity to the occupying leaseholder" (see Official Custodian for Charities v. Goldridge (1973) 26 P & CR 191, 204 per Lord Denning MR quoting the Government White Paper Cmnd No 2916). One would expect, therefore, that when a leaseholder of a house acquires the freehold of that house in exercise of his rights under the Act, both the rights which he enjoyed and the rights which bound him in his capacity as leaseholder of the house would be carried through into his new status as freeholder when he acquires the land on which the house is built.
71. So the starting point is to identify the rights which the tenant enjoyed and to which he was subject as leaseholder of the house. For the reasons that Lord Justice Chadwick has explained, and with which I agree, the original lessees of plots 56 and 58 Dovercourt Road were entitled to reciprocal rights of way over that half of the pathway that had not been leased to them. Does the scheme of the Leasehold Reform Act 1967 cause any of those rights to fall into a legal black hole?
72. It would be tempting to conclude that section 10 (3) (a), in speaking of "such provisions … as the tenant may require for the purpose of securing to him rights of way which are necessary for the reasonable enjoyment of the house and premises.." is speaking of an objective test. Such an interpretation would not depend on whether the individual enfranchising tenant has actually articulated a requirement. Likewise it would be tempting to conclude that section 10 (3) (b) in speaking of "such provisions as the landlord may require for the purpose of making the property conveyed subject to such rights of way as are necessary for the reasonable enjoyment of other property" is also speaking of an objective test. However, in the light of condition 5 of the schedule to the regulations (to which Lord Justice Chadwick has referred) I do not consider that such a construction is possible.
73. It is clear from section 10 (1) of the Leasehold Reform Act 1967 that the conveyance cannot exclude or restrict section 62 of the Law of Property Act 1925, unless the tenant expressly consents. Accordingly, where the landlord conveys the freehold to the tenant, subject to the tenancy, section 62 will operate to convey with the freehold easements, liberties, rights and privileges "demised with" the land conveyed. Since there is diversity of occupation immediately before the conveyance, there is no impediment to the application of section 62. This means that any right enjoyed by the tenant under his lease is converted into a like right, enjoyed with the newly conveyed freehold. A right may be enjoyed, for this purpose, if it is part of the bundle of rights comprised in the leasehold estate, even though it is not exercised. The only limitation on this effect of section 62 is that section 62 does not give the tenant any better title than the landlord could have expressly conveyed: section 62 (5) of the Law of Property Act 1925, repeated in section 10 (1) of the Leasehold Reform Act 1967. In practice, therefore, this effect will be produced where the rights enjoyed by the tenant under his lease are exercised over his landlord's adjoining land; or where rights enjoyed by the tenant are also enjoyed by the freeholder. That, then, deals with rights enjoyed by the leaseholder.
74. So far as rights binding the tenant are concerned, section 10 (1) of the Leasehold Reform Act 1967 recognises that the purpose of the conveyance is "to give effect to section 8 (1)". Section 8 (1), in turn, obliges the landlord to convey to the tenant the house and premises "subject to the tenancy and to tenant's incumbrances". If, therefore, the landlord complies with his obligation, the conveyance will take effect subject to rights which are tenant's incumbrances. Tenant's incumbrances include "any incumbrance on the tenancy". I agree with Lord Justice Chadwick that a conveyance executed to give effect to section 8 should be construed as having this effect. It follows, therefore, that any right which binds the tenant in his capacity as tenant will continue to bind him once he has become the freeholder. The benefit of the rights which have thus been reserved will be vested in the former freeholder who has made the conveyance.
75. Accordingly, on any subsequent conveyance by that freeholder, the rights reserved to him will be capable of being conveyed to a new purchaser. They will in fact be conveyed by the operation of section 62. That is exactly as one would expect where a lessee takes the opportunity given to him by the Act to convert his leasehold interest into a freehold interest.
76. I therefore agree with Lord Justice Chadwick that it does not matter which of two adjoining leasehold properties in enfranchised first. Both enfranchising tenants will continue to be bound by the rights which bound them as leaseholders and will continue to enjoy the rights that they enjoyed as leaseholders. All that has changed is that they enjoy and are bound by those rights as freeholders rather than as leaseholders.
77. It follows that the judge reached the correct conclusion, albeit by a different route. I, too, would dismiss the appeal.
78. I would only add that this case demonstrates how important it is for any conveyancer concerned with enfranchisement to consider carefully the rights and obligations to be contained in the conveyance executed to give effect to the tenant's right to enfranchise; and to ensure that the correct rights are both granted and reserved.