Wall v Collins & Anor

The appellant, Mr Wall, is the registered owner of No 231 Leigh Road, West Houghton in Bolton. Mr and Mrs Collins are registered owners of the adjoining property to the south, No 233. They are semi-detached houses, lying on the east side of Leigh Road. They also have access over Back Street, which runs along the rear of their properties, parallel to Leigh Road. Back Street and Leigh Road are public highways. Mr Wall is also the registered owner of a leasehold interest in land to the rear of his property (“the Back Land”) on which he has built a garage.

The current dispute concerns Mr Wall’s claim to a right of way over a passageway (referred to in the judgment as “South Road”), which runs along the south side of No 233, and provides a link between Back Street and Leigh Road. The judge had to consider a number of other issues, including allegations of unneighbourly conduct on both sides, but happily we are not concerned with them. We owe a considerable debt to the judge for having enabled the outstanding issues to be cut down to this extent, after what must have been a very difficult case to handle.

Mr Wall appears before us in person, as he did below. Mr Ian Foster appears for Mr and Mrs Collins. Without (I hope) offence to Mr Wall, I would observe that his enthusiasm for legal research and his anxiety to advance his case on as many fronts as possible might have risked diverting attention from the relative simplicity of his best points. He and we should be particularly grateful to Mr Foster for his help in refining the issues.

The conveyancing history starts in 1910 with the grant of a lease by the freeholder, Mr Olliwell, over the undeveloped sites of the two properties for a term of 999 years from 12^th May 1909 (“the 1910 lease”). The lease was granted to a Mr Hurst, who covenanted to build two houses on the land. It contained a declaration that -

On 25 February 1911, following the construction of the houses, the unexpired lease in respect of number 231 was assigned to a Mr Morris. Mr Hurst retained the leasehold interest in number 233. The assignment to Mr Morris was granted

In 1946, the lease of No 231 was assigned to Mr. and Mrs. Green. At about the same time they took possession of the Back Land, which was owned by a third party whose name is unknown. They paid rent on the Back Land until 1970, but remained in occupation thereafter without paying rent. On 1^st January 1974 Westhoughton became an area of compulsory registration of title. In August 1977 the freehold reversionary estate in both properties was transferred to a company called Mardonian Limited subject to the 1910 Lease. This transfer led to the first registration on 14^th September 1977 of the freehold title to both properties.

The next important events came in 1986. It is common ground that up until that time the freehold of the two plots (including South Road) was in common ownership. In April 1986 Mr. and Mrs. Green acquired the freehold estate in No 231 from the common owner, and became registered as freehold proprietors, expressly subject to the 1910 Lease. At about the same time they swore a statutory declaration claiming a right to the Back Land by adverse possession. They became the first registered owners of a leasehold interest in that land under a separate entry, on the basis (as is noted in the register) that it was held “as an accretion to” the lease of No 231. The judge commented on the current status of the Back Land:

Turning to No 233, there is no information as to the chain of succession between 1911, when it was retained by Mr Hurst, and 1986. It seems that by 1986 gates had been erected at both ends of South Road, but not so as to prevent its use by the owner of No 231. In September 1986 Mr and Mrs Collins were registered as first registered proprietors of the leasehold estate in No 233 (including South Road). They did not acquire the freehold of No 233 until June 1995, when they were registered as the freehold proprietors of the Property, expressly subject to the 1910 Lease. They remained registered leasehold proprietors until August 2004, when the leasehold title in No 233 was closed. It is common ground that the leasehold title was then merged in the freehold.

Meanwhile, in March 1990, Mr. and Mrs. Green had transferred their interests in No 231 to Elaine Glennon, their daughter, by way of gift. She was registered in place of Mr. and Mrs. Green as the proprietor of the freehold in No 231 (still expressed to be subject to the 1910 Lease), and the leasehold interest in the Back Land.

On 23^rd February 1999 she transferred to Mr Wall her registered freehold title to No 231 and her registered leasehold title to the Back Land. This led to Mr Wall’s registration as proprietor in respect of each of those titles. The leasehold interest in No 231 was not separately registered, and the reference to the 1910 Lease in the Charges Register of the title was removed. According to Mr Wall’s original Particulars of Claim (dated 16^th March 2005) this was done by his conveyancing solicitor “as part of his tidying up of the estate”, but the judge made no specific finding on this point. Mr Wall has erected a double-garage on the Back Land.

On the question of the right of way over South Road, the judge’s conclusions can be summarised (I hope without distortion):

He held that as a matter of law -

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)

if a leasehold estate is merged with a freehold estate, any easements or covenants attached to the leasehold interest are extinguished. (para 17)

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:

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 [1965] 2 AllER 506 showed that there was “nothing unconscionable” in the Collins taking advantage of faulty conveyancing on the Greens’ side. (para 21)

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).

On the issue of merger (point (ii)), in the light of further evidence made available by Mr Wall, Mr Foster now fairly accepts that there was probably no merger in 1990, on the transfer by the Greens to their daughter. However, he supports the judge’s decision in respect of 1999, when on Mr Wall’s registration as proprietor of the freehold, the entry in the Charges Register of the title relating to the 1910 Lease was removed. He also refers to letters from HM Land Registry to the Claimant in 2004, which make it clear that his solicitor did indeed apply to merge the unregistered leasehold estate in the registered freehold estate. Although we did not hear Mr Wall on this point, I can see no obvious answer to the judge’s conclusion that there was merger in 1999, and I will proceed on that basis.

The premise of the judge’s reasoning was that the right of way was “attached to the lease”, and accordingly that when the lease was extinguished by merger, the right was lost. That approach was based on a passage from Sara, Boundaries and Easements: para 12.18

As to the scope of the right granted in 1911, it is clear that Mr Hurst could neither grant the benefit, nor accept the burden, of a right in excess of his then 999 year interest in each property. To that extent, the judge’s conclusion that the right granted at that stage could not benefit or burden the freehold reversion, in which Mr Hurst had no interest, is clearly right. I do not read the first part of the passage in Sara as intended to say more than that.

That is not the same as saying that the right was “attached to” the leasehold interest. An easement must be appurtenant to a dominant tenement, but not necessarily to any particular interest for the time-being. Thus, for example, the Law of Property Act 1925 provides that a legal easement may be created for the equivalent of a freehold interest, or for an interest “equivalent to… a term of years absolute” (s 1(2)(a)). In the latter case, there is nothing to suggest that an easement for a term of years has to be attached to a leasehold interest of equivalent duration. All that matters is that the grantee has an interest at least co-extensive with the period of the easement. (Footnote: ¹).

It follows, in my view, that merger of the lease into a larger interest in the dominant tenement is not in itself fatal to the continued existence of the easement, for the period for which it was granted. The dominant tenement remains unchanged and there is no legal impediment to the continued enjoyment of the easement by the occupier for the time-being of that tenement.

Mr Foster sought to support the judge’s reasoning, in reliance on the statement in Sara. Indeed he urged us that the contrary view was almost heretical. He also referred us to a letter to Mr Wall from the local Land Registry in April 2004, in which the Assistant Land Registrar stated that, as a consequence of the application to merge the lease, “the appurtenant easement also determined”. However, Mr Foster had to accept that no authority was cited in Sara in support of the proposition. Nor was he able to point to any statement to similar effect in any other authority or textbook. Although Gale does not in terms deal with the point, it is noteworthy that the list of the ways in which an easement may be lost does not include merger.

Mr Foster accepts, as I understand him, that in respect of the servient tenement, the merger of the leasehold with the freehold would not remove the burden of the easement, at least for the period of the original lease. This seems right as a matter of common sense. The owner of a servient tenement should not be able to escape the burden of an easement by dealings to which those interested in the dominant tenement are not parties. Equally, as a matter of common sense, it is difficult to see why a lessee should be worse off, so far as concerns an easement annexed to the land, merely because he has acquired a larger interest in the dominant tenement.

In my view, therefore, the premise of the judge’s reasoning was wrong. The merger of the lease in 1999 did not destroy the easement, at least to the extent of the 1911 grant. That is enough for Mr Wall, since, as he fairly accepts, a 999-year right is amply sufficient for his purposes.

I turn to the question whether an equivalent right passed with the conveyance of the freehold of No 231. Although this may be of only theoretical interest in the present case following my conclusion on the merger issue, it was addressed in detail by the judge, and in argument before us. In my view, in respectful disagreement with the judge, section 62 provides direct support for Mr Wall’s case that his right is not limited by the extent of his former leasehold interest.

Section 62(2) provides:

The crucial date for this purpose is April 1986, when the freehold interest in No 231 was sold to the Greens by the common owner. At that time, the access over the South Road was “a right or advantage” enjoyed with the house on No 231, which was capable of being the subject of an easement. Accordingly, in the absence of any indication of a contrary intention, it should in principle be treated as having passed with the freehold.

As I understood his argument, Mr Foster had two answers: first, the enjoyment of the way over South Road was specifically related to the leasehold interest, and there was no justification for attributing it to the freehold; secondly, the common owner of the freehold in 1986 was not competent to confer a right of way over South Road, no rights having been reserved in the still current leasehold interest of the occupier of No 231. The second point was in effect adopted by the judge. Having reviewed the authorities he said:

Neither argument in my view is well-founded. As to the first, the key to the operation of the section is enjoyment in fact, not title. As Farwell J said in the leading case, International Tea Stores v Hobbs [1903] 2 Ch 165:

That passage was cited by this court in Graham v Philcox [1984] 1 QB 747. It was held that a right of way, originally granted in connection with a five year tenancy of a part of a house, was converted by section 62 into a permanent right of way on the conveyance of the freehold. Reference was also made (at p 754, per May LJ) to a passage of Neville J in Lewis v Meredith. [1913] 1 Ch 571, 579 (on the predecessor to s 62):

The point was made even more clearly by Purchas LJ, in disagreeing with the judge’s view that the easement had come to an end at the same time as the lease. He regarded it as immaterial that the right had been enjoyed by the occupier first under a five year tenancy, and thereafter (up to the time of the relevant conveyance) as statutory tenant:

Often, as in the International Tea House case itself, the issue has been whether the use was too “precarious” to found a permanent right. In this case, the problem, if any, is the reverse. The suggestion is that because the right was attached to a 999 year lease, section 62 has no application. However, in principle, if the issue is enjoyment rather than title, the nature of the lease (if any) should be immaterial. Mr Foster accepts that, if there had been no lease of No 233, and if at the time of the conveyance the occupier of No 231 had enjoyed a permissive use of South Road, section 62 would have converted it into a right attached to the freehold. It is hard to see why the occupier of No 231 should be in a worse position because his enjoyment is not simply permissive, but is protected for 999 years. In my view the judge was right not to see this point as an obstacle to Mr Wall’s case.

On the second point, the judge was of course right that the common owner cannot be held to have given more by implication than he could have given by express grant (see s 62(5), which so provides in terms). Only the freehold in either property could be affected by an implied grant under section 62. But no more was needed. No 231 already had the benefit of a right of way binding upon the leasehold interest in No 233. The additional right did no more than bind the reversionary interest. I can see no reason why the grant of such was outside the competence of the common owner of the freehold.

It follows that, after the 1986 conveyance (and assuming no merger), the occupier of No 231 had the following: (i) a right over South Road derived from his 999 lease binding the identical leasehold interest in No 233, and (ii) an equivalent right derived from his reversionary freehold interest in No 231, binding the reversionary freehold interest in No 233. In the result all relevant interests in both properties were bound. On the view already expressed, the disappearance by merger of the lease of 231 in 1999 did not affect the continuation of the right for the benefit of the freehold. In any event, since the merger in 2004 of the leasehold interest in No 233, the interests in the two properties are now once again fully consistent with each other.

For completeness, I should mention two authorities, both at first instance, to which we have been referred: one in support of the judgment and one against. Neither, in my view, detracts from the approach I have adopted. In addition I should refer to a recent decision of this court, Kent v Kavanagh, not available to the judge, which gives some support to that approach, albeit in the different statutory context of leasehold enfranchisement.

The Golden Lion Hotel case (see above), which was referred to by the judge, concerned a restrictive covenant rather than an easement. A lease of a plot of land fronting a road contained a covenant by the lessor, who was also the owner of land with a hotel on the opposite side of the road, not to build on the hotel site except to a specified extent. Subsequently, the lessee acquired the freehold reversion. The successor to the hotel site brought an action for a declaration that, the lease having been extinguished by merger, the covenant was no longer enforceable. Cross J held that on the facts there had been merger, and that the covenant was accordingly unenforceable. He rejected the defendant’s argument that

He distinguished Birmingham Joint Stock Co v Lea (1877) 36 LT 843, where a similar argument had succeeded, because in that case the Vice-Chancellor had held -

It is unnecessary to consider whether that case was correctly decided on its own facts. Like the Birmingham Joint Stock case, which was distinguished by Cross J, it seems to have turned on the judge’s interpretation of the particular contractual arrangements. In any event both cases concerned restrictive covenants, which have a different legal pedigree, and are not necessarily subject to the same principles as easements.

Mr Foster also referred us to Rymer v. McIlroy [1897] 1 Ch. 528, but only for the purpose of submitting that it was wrong and should be overruled. It is closer to the present, since it related to a right of way. It is noted by Sara as a possible exception to their general proposition. In Gale on Easements 17^th Ed para 3-11, it is mentioned by way of qualification of the general statement that:

Adopting Mr Foster’s summary, B, the freehold owner of Blackacre, granted a right of way over it to A, the lessee of Three-acre; one year later A acquired the freehold title to Three-acre and his leasehold interest then merged in the freehold; he subsequently leased part of Three-acre to C who sought to exercise the right of way over Blackacre. B contended that C had no such right because it was attached only to A’s leasehold estate, which had been extinguished. That argument was rejected by Byrne J. who held that the right of way continued for the benefit of the freehold.

It had been argued for B that the grant could only have given an easement coextensive with the interest of the grantor, which had come to an end by merger; in so far the grant went beyond that it “was a grant of an easement in gross and invalid….” For C it was argued that the words of the grant showed an intention to benefit successors, and that there was “nothing to prevent a man covenanting that another shall have a right of way as long as he is owner of or interested in a tenement”.

The judge held that the right continued. Having regard to “the whole tone and tenour of the deed, and the fact that John Drummond shortly afterwards acquired the fee”, he concluded:

I find this decision of little assistance. In so far as it accepts that merger of the tenancy was not fatal, it supports the approach I have adopted. However, there was little discussion of that point, and again, the case seems to have turned principally on the construction of the particular arrangement.

Of more importance is the recent judgment of this court in Kent v Kavanagh [2007] Ch 1; [2006] EWCA Civ 162. The judgment was handed down after the argument before the judge in the present case had been completed. The case is complicated by the interaction of section 62 with the enfranchisement regime, under the Leasehold Reform Act 1967. However, on the main issue it provides a useful analogy for the present case.

In summary, it concerned two adjoining houses, A and B, built in 1907 by the common owner, and let under separate 99 year leases in 1909. There was a pathway between the two houses, giving access to their back gardens. The centre line of the pathway formed the boundary between the two leases. The leases contained no specific rights in respect of the pathway, but there was evidence of use “as of right” by occupiers of both houses (see judgment paras 12-16). In 1976 the current lessees of both properties acquired the respective freehold reversions under the 1967 Act from the same owner: A in May and B in October. It was held that both continued to enjoy the same rights as before, but as freeholders rather than lessees. As a matter of common sense, that answer may seem obvious, but the difficulty was to find an appropriate legal route to that conclusion. This result was achieved by the application of section 62 (which was preserved by the 1967 Act), even though the rights were not covered by the more specific provisions for easements in section 10(2) and (3) of the 1967 Act.

For present purposes it is sufficient to consider the position in respect of house A. (House B presented an additional complication, because by the time of that conveyance, the vendor had lost the right as freeholder to convey any interest in the half of the pathway attached to house A.) Immediately before the freehold of house A was acquired from the common owner, the lessee enjoyed a right of way over the path, as a benefit of his lease, and as a burden on the still extant lease on house B. It was held that, notwithstanding the failure of the lessee to “require” it, a right of way over the pathway passed with the freehold of house A under section 62. It was not seen as an obstacle that the enjoyment of the right had been related to an occupational lease of house A, nor house B itself remained subject to a 99 year occupational lease.

Chadwick LJ (with whom both Longmore LJ and Lewison J agreed) dealt first with the position assuming no lease of house B:

Later he considered the effect of house B being tenanted:

Mr Foster argues that Kent is distinguishable, because the common freeholder “was in a position to grant the right of way by reason of the implied reservations in his favour in the 1909 leases.” It is true that in that passage Chadwick LJ was dealing specifically with a case where there are “reciprocal rights”. However, that was in the context of the particular case, where there were no express rights, and where it was necessary to find reciprocal rights by implication. In a later part of his judgment he relied on the fact that the houses had been built under a building scheme initiated by the common owner, as a basis for the implication in both 1909 leases of “the necessary grant and reservation of reciprocal rights of way” (para 63). That does not detract, in my view, from the relevance of the case in the present context, where the rights were express. More generally, and consistently with earlier authorities, the case shows a broad approach to the construction of section 62 to overcome technicalities and ensure that the legal title reflects the reality.

For completeness, I should refer also to Lewison J’s analysis. Having indicated his agreement with Chadwick LJ, he added:

Thus, his emphasis was not so much on actual enjoyment as on the existence of a “bundle of rights” attached to the lease. (As I understand the judgment, he was referring to the implied “reciprocal rights” which Chadwick LJ had found, rather than to any specific grant: para 71). On this view, section 62 operated to attach that bundle of rights to the freehold which was the subject of the conveyance. Mr Foster fairly points out that in the present case the rights were not included in the original demise, to which the freeholder was a party, but in a later assignment by the first lessee of the two properties. However, on the wording of section 62, I am not convinced that this is a relevant distinction. It is the occupier’s “enjoyment” of the bundle of rights, rather than its legal source, which is material.

Finally, I must deal with Mr Foster’s argument that, even if there is an extant right of way attached to No 231, it cannot be used to benefit the Back Land.

As has been seen, the right to the Back Land was acquired by adverse possession by the Greens. It was registered in April 1986 as an accretion to the leasehold interest in No 231. Mr Wall later built his double garage on it. As already noted, the Land Register does not reflect the legal position analysed by the judge, that adverse possession by a tenant is for the ultimate benefit of the freehold owner and that the effect of the transfer to the Greens of the freehold of No 231 was that the leasehold in the Back Land merged in the freehold interest.

Mr Wall made a claim to a prescriptive right of way for the benefit of No 231 for the benefit of the back land or for both. The judge rejected the claim in respect of both (paras 35-37).. That conclusion is reflected in his order, which declares that Mr Wall has no right over South Road, in respect of either No 231 or the Back Land. It is not clear to me whether Mr Wall has effectively appealed against that ruling in respect of the Back Land, or if so on what grounds. However, in order to avoid further dispute, it is desirable that we should deal with the consequences for the Back Land of our holding (contrary to the judge) that there is still a right attached to No 231.

While I see no reason to question the judge’s conclusion on prescription, that is not the end of the issue. The authorities show that, even where the original dominant tenement is extended, the enjoyment of the easement may continue for the benefit of the enlarged property, if the additional use is merely “ancillary”. Mr Wall has helpfully referred us to the recent judgment of this court in Massey v Boulden [2003] 1 WLR 1792, in which the authorities are reviewed by Simon Brown LJ. In that case the dominant tenement had been increased by the addition of two rooms from an adjoining property. It was held that in so far as the use of the way served the two rooms it was purely “ancillary” to the use of the house (para 45).

Simon Brown LJ (para 39) cited the words of Vaughan-Williams LJ in the leading case of Harris v Flower (1904) 74 LJ Ch 127, 132, where the claim was rejected as excessive, on the basis that the uses for the additional land :

He also referred to the judgment of Schiemann LJ in Peacock v Custins [2002] 1 WLR 1815, 1824 (in which the court refused to allow a way granted for agricultural use of 15 acres, to be used for an additional 10 acres):

On the facts of Massey itself, Simon Brown LJ concluded that, in so far as the use of the way served the additional rooms, it was “ancillary” to its use the house.

Similarly, in the present case, on what we have been told I can see no reason for holding that the use of the garage on the Back Land is other than ancillary to (or an adjunct to) the ordinary residential use of No 231.

I would add one final comment. Although Mr Wall has succeeded in establishing his right of way over South Road, that right is not unlimited. Under the 1911 assignment the way was granted –

For these reasons, I would allow the appeal. I would accordingly vary paragraph 2 of the judge’s order. Subject to any submissions by the parties, the appropriate declaration would seem to be that the Claimant, as owner of No 231 and of the Back Land, enjoys a right of way over the passageway known as South Road, to the extent that it is reasonably required for the convenient enjoyment of the dwelling house on No 231.

It was agreed that we would defer issues of costs until after judgment, and that they would be decided on the basis of written submissions, if not otherwise agreed. Written submissions on costs should be exchanged and submitted to the court within one week of the handing down of this judgment, and any reply within one week thereafter. It may help if I indicate at this stage that I see much sense in Mr Foster’s suggestion (skeleton para 51) that the judge’s order should in any event be varied to attribute a fixed proportion of the overall costs to each issue or group of issues.

I agree. I add this only. There must be many properties, particularly in urban areas, which share a similar history to that of number 231 Leigh Road. If the effect of a merger of a leasehold estate with a freehold estate was that any easements or covenants attached to the leasehold interest were thereby extinguished, the consequences would be literally disastrous for many people. Without easements it may be very difficult if not impossible to enjoy the benefits of land ownership.

I also agree.