COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
MANCHESTER DISTRICT REGISTRY
HIS HONOUR JUDGE PELLING QC
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE CARNWATH
LORD JUSTICE HOOPER
|KEITH JOHN WALL
|- and -
|BRIAN COLLINS & ANR
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Ian Foster (instructed by Messrs. Widdows Mason) for the Respondents
Hearing date : Wednesday 4th April, 2007
Crown Copyright ©
see also: Wall v Collins & Anor (Supplementary)  EWCA Civ 724 (17 July 2007)
LORD JUSTICE CARNWATH :
The history of the properties
"… the streets so far as the same be opposite to or extend over the said plot of land hereby demised may at all times during the said term be used as foot carriage and drift ways by the lessee and his tenants, lessees ad others deriving title through him…as well as the mortgagee and lessors, their respective heirs and assigns."
As the judge found, South Road did not exist at the time of that lease, and there was nothing to indicate that it was within the contemplation of that clause (para 10).
"TOGETHER with the right for the purchaser his executors administrators and assigns and tenants and occupiers for the time being of the premises hereby assigned and conveyed to pass and repass on foot or with horses carts and other vehicles over and along the road coloured yellow on the [plan annexed thereto] for the purposes of the convenient use and enjoyment of the premises hereby assigned and conveyed and for no other purpose whatsoever".
The "land coloured yellow" included Back Street and South Road. It is not in dispute that from that time until at least 1986 the occupiers of No 231 enjoyed a right of way over South Road.
"Normally adverse possession established by a tenant is established for the ultimate benefit of the freeholder. It seems likely that the effect of the transfer to the Greens of the freehold in number 231 was that the leasehold interest in the back land merged into the freehold interest when the freehold was transferred to the Greens with the result that the Greens became the freehold owners of the back land from that date. However, this has yet to be reflected on the register." (para 14)
The judgment below
i) He held that as a matter of law -a) the right of way granted by the 1911 assignment "could only attach to the leasehold interest in no 231 which was what was being assigned". (para 16)b) if a leasehold estate is merged with a freehold estate, any easements or covenants attached to the leasehold interest are extinguished. (para 17)
ii) He accepted that, following section 185 of the Law of Property Act 1925, merger is not automatic but depends on intention. Having reviewed the "sparse" evidence he concluded:"… on balance I consider the leasehold ceased to exist in 1988 by merger because thereafter all the transactions concerning number 231 concern the freehold and the freehold alone."He added that, even if there were no previous merger, the leasehold interest was "surrendered by operation of law" in 1999 when Mr Wall acquired the freehold in No 231. (paras 18-22)
iii) He accepted that, although it was intended that the leasehold and freehold titles would merge, the consequential effect on the right of way was probably unintended. However this was matter for those responsible for the conveyance to Mr Wall. Golden Lion Hotel v Carter  2 AllER 506 showed that there was "nothing unconscionable" in the Collins taking advantage of faulty conveyancing on the Greens' side. (para 21)
iv) He rejected Mr Wall's argument that the right had become attached to the freehold by the operation of section 62, either on the 1911 assignment, or on the 1986 conveyance of the freehold to the Greens (para 26-34). Finally he rejected Mr Wall's argument that he had acquired a right by prescription, either for No 231 itself or for the Back Land (para 35-7).
The effect of merger
"…a person cannot grant an easement for an estate greater than that which he holds in the property and… a person cannot take an easement for an estate greater than that which he holds in the dominant tenement. This means that if the [grantee] is a lessee at the time of the grant, but subsequently becomes the freeholder the easement should cease to exist since the leasehold interest to which it attached has merged in the freehold…"…."
In my view, the first part of that passage does not bear the interpretation the judge put on it, and the second is, with respect, wrong.
"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.""
"In the light of the analysis set out above I accept Mr Foster's submission that section 62 cannot be used impliedly to create a legal easement over land that the conveying party could not have created by express grant at the time of the conveyance or transfer of the land in question." (para 34)
"The real truth is that you do not consider the question of title to use, but the question of fact of user; you have to inquire whether the way was in fact used, not under what title has it been used, although you must of course take into consideration all the circumstances of the case…" (p 172).
"Easement or right in the strict sense there could not be, for the common ownership precluded the acquisition of any right or easement by the occupiers, but International Tea Stores Co. v. Hobbs shows that "a right" permissive at the date of the grant may become a legal right upon the grant by force of the general words in section 6 of the Conveyancing Act 1881. From this point of view the circumstances under which the quasi right was enjoyed became immaterial so long as it was actually enjoyed and was of a nature which could be granted, that is to say, a right known to the law: ..." (emphasis added)
"He was undoubtedly using the right of way at that time. It was certainly an easement, right or advantage "reputed to appertain to the first floor flat" and was enjoyed with that part "of the land, houses or other buildings conveyed." I can find nothing in the wording of section 62(2) of the Act to indicate that the 'land conveyed' cannot include land subject to a lease or an adverse right of occupation by a tenant protected by statute. The easement, right or advantage is enjoyed with and appertains to the land, not to the statutory right of occupation... The grant by which the right of way was originally created was a term of five years; but there were no specific limitations to that grant. I agree with what has already been said by May L.J. in relation to Mr. Reid's submissions that the judge erred in considering the user of the way by the vendor rather than the user of the right of way with the land…" (p 760-1, emphasis added)
"…though the leases no longer exist… a corresponding right to enforce the covenants in equity against the plaintiff remains attached to the houses until the date when the leases would have expired…"
"… though the old under-lease was gone it was clearly part of the arrangement that the defendant should remain subject to the covenant and that accordingly he remained bound by it in equity. "
It gave no support for the instant case in which the intention to merge was stated unequivocally. Cross J added:
"…it is possible, though no doubt unlikely, that (the relevant parties) intended to give up any right to enforce the covenant in the respective leases against the plaintiff, and even if one assumes—which is much more likely—that they did not so intend and that the positive declarations that the lease should merge in the freeholds were inserted per incuriam, there is nothing unconscionable in the plaintiff, who was not concerned in the matter, taking advantage of the faulty conveyancing." ( 3 All ER 506 at 509).
"It seems that no easement can be effectually granted in excess of the interest, if any, of the grantee of the dominant tenement."
The case is referred to in a footnote as turning on its "unusual circumstances".
"The true construction is that, so long as the Drummonds, or either of them, or the heirs or assigns of either of them were interested, this right of way was to subsist. The probability is, and it is not an unnatural inference to draw, that it was within the contemplation of the parties that the Drummonds might obtain the fee simple in one or more of the plots in which they had then only a limited interest, and that in that case the right of way should continue. I can see nothing illegal in such an agreement, and if that is the contract no such doctrine as that the covenant was with the reversioner, who has destroyed the reversion, arises…." (p 534-5)
Kent v Kavanagh
"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…"
"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…
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)." (para 54-6)
I have highlighted the part of the summary relating to house A, which is most relevant to this case. (The reference to section 10(2)(i) of the 1967 Act can be disregarded in the present context, since that provision dealt with rights other than rights of way: see para 31.) The importance for present purposes is that disappearance of the lease of house A did not affect the continued ability of the former tenant to enjoy his former rights in so far as they affected the tenancy of house B. The effect of section 62 was to supplement those rights by equivalent rights in respect of the freehold. The court does not appear to have been concerned by technical issues relating to the possible effect of merger. The approach appears identical to that which I have adopted in this case.
"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..…" (para 73, emphasis added)
The Back Land
"… cannot be said to be mere adjuncts to the honest user of the right of way for the purposes of [Whiteacre] … It is not a mere case of user of [Whiteacre] with some usual offices on [Blackacre] connected with the buildings on [Whiteacre]."
"'In our judgment the authorities to which we have referred, and in particular [Harris], also confirm that, where a court is being asked to declare whether the right to use a way comprises a right to use it to facilitate the cultivation of land other than the dominant tenement, the court is not concerned with any comparison between the amount of use made or to be made of the servient tenement and the amount of use made or that might lawfully be made within the scope of the grant. It is concerned with declaring the scope of the grant, having regard to its purposes and the identity of the dominant tenement. The authorities indicate that the burden on the owner of the servient tenement is not to be increased without his consent. But burden in this context does not refer to the number of journeys or the weight of the vehicles. Any use of the way is, in contemplation of law, a burden and one must ask whether the grantor agreed to the grantee making use of the way for that purpose…
… all three judges (in Harris) were addressing not the question of additional user, but the different question: whether the white land was being used for purposes which were not merely adjuncts to the honest use of the pink land (the dominant tenement); or, rephrasing the same question, whether the way was being used for the purposes of the white land as well as the dominant tenement….
It is in our judgment clear that the grantor did not authorise the use of the way for the purpose of cultivating the blue land. This can not sensibly be described as ancillary to the cultivation of [Whiteacre]." (paras 25-27, emphasis added)
"… for the purposes of the convenient use and enjoyment of (No 231) and for not any other purpose whatsoever".
For most purposes, as Mr Wall accepted, he has a more convenient means of access over Back Street, which is a public highway, and does not involve any need to open and close gates. There are no doubt more limited purposes for which he can make a reasonable case for use of South Road. For example, he mentioned wheel-chair access to the front of his house. We have no information about that. However, I would not regard his right over South Road as enabling him to use it for purposes for which he has an equally or more convenient access by another route. If this limitation is observed, it should be possible for the two neighbours to agree on a mode of use which meets Mr Wall's genuine needs without involving undue burden or loss of privacy for Mr and Mrs Collins.
Lord Justice Hooper :
Lord Justice Mummery :