London Tara Hotel Ltd v Kensington Close Hotel Ltd

This claim involves a dispute between two major London hotels concerning the right of the one to use a private service road which belongs to the other. The Copthorne Tara Hotel (“the Tara Hotel”) and the Kensington Close Hotel (“the KCH”) are situated on adjoining land south of Kensington High Street in London. The private service road that goes around the main building of the Tara Hotel, known as the Tara Ring Road (“TRR”), is on land belonging to the claimant. The KCH has been using the TRR since the Tara Hotel was constructed and the defendant asserts that it has acquired the right to continue to do so.

The KCH is much the older of the two hotels. It was built in 1937-1939, originally as a block of flats referred to as a “residential club”, which in modern parlance would be called serviced apartments. It started to operate as a hotel in the late 1950s and it was gradually converted from residential use to hotel use. The general manager of the KCH from 1967 to 1979 explained that when he started there it was about half-and-half residential occupancy and hotel rooms but by the mid-1970s it was fully a hotel. It now has 550 bedrooms.

The land now occupied by the Tara Hotel was previously a railway depot and goods yard. The Tara Hotel was constructed over 1971-1973 and formally opened in February 1973. It now has some 850 bedrooms.

The main approach to both hotels from Kensington High Street is down a road called Wrights Lane. At the end of Wrights Lane, turning to the left (east) brings one into Scarsdale Place, which abuts the front of the KCH. However, Scarsdale Place ends just short of the eastern end of the KCH. From there, the private TRR leads to the large entrance forecourt of the Tara Hotel and continues around the building. Appended to this judgment is a plan which illustrates the layout of the two hotels and the TRR. The KCH has an underground car park, for which the entrance is at the western end of the hotel frontage (opposite the end of Wrights Lane) and the exit is over on the eastern side, as shown on the plan. The exit from the car park comes out into the KCH’s narrow service road, which leads up to an eastern archway out of the premises. The TRR, as its name suggests, goes right around the Tara Hotel building, passing a parking area on the south-east where there are bays for coaches. Where the TRR abuts the KCH land, there are two service gates as between the TRR and the KCH internal service road. The KCH has a service area on its internal road located between those two service gates, where there is a good delivery entrance into the KCH building. I had the opportunity to visit the site and view these features, accompanied by the representatives of both sides, on the third day of the trial.

The claimant was originally a subsidiary of the Aer Lingus airline group, and indeed the Aer Lingus flight crews in London used to stay in the Tara Hotel. In October 1987, Aer Lingus acquired the Copthorne group of hotels, and the management of the Tara Hotel was consolidated into that group although its ownership remained in the claimant as a distinct company. In 1995, Aer Lingus sold the Copthorne Tara group (as it had become known) to City Developments Ltd, which combined those hotels with its other hotel assets into Millenium & Copthorne Hotels Ltd. That company went public the following year and the claimant then became a subsidiary of Millenium & Copthorne Hotels Plc. Although the head office of that group is in Horley, many of the management staff are based in the Tara Hotel.

It is necessary to set out the history of the ownership of the KCH in some detail. When the KCH was constructed in the 1930s, it was owned by Home Flats Ltd, which later changed its name to Kensington Close Ltd (“KCL”). In 1969, KCL was acquired by Trust Houses Forte Ltd and so became part of the Trust Houses Forte group (“THF”), but the ownership and operation of the KCH continued in the hands of KCL until 1978. On 31 October 1978, KCL ceased trading and the KCH business was transferred to Trusthouse Forte Hotels Ltd; the freehold land of the KCH was similarly transferred on 29 May 1980. KCL was eventually dissolved on 14 July 1988. There were further transfers of the freehold interest in the KCH. In May 1985, Trusthouse Forte Hotels Ltd transferred the land to Trusthouse Forte (UK) Ltd, which later changed its name to Forte (UK) Ltd. In early 1996, in a hostile takeover that attracted much publicity, Granada Group plc acquired THF and in September 1996 the freehold of the KCH land was transferred to Post Houses Ltd (which soon after changed its name to Posthouse Hotels Ltd). On 27 September 2002, the KCH was acquired by its present owner, the defendant, which is a subsidiary of Cola Holdings Ltd.

There are two discrete legal instruments that are critical to the claims made in this case. The first goes back to the time of the construction of the KCH. When the site was acquired for the purpose of construction of a “residential club”, the vendors did not own a small rectangle of land in the north eastern corner of the site, nor were they able to grant a right of way connecting that point with the highway (i.e. what is now Scarsdale Place). Accordingly, they agreed to buy that rectangular plot together with a right of way for the site from the railway company that owned the depot and goods yard. As a result, by a conveyance dated 18 November 1938 (“the 1938 Conveyance”), the London Midland & Scottish Railway Company conveyed a rectangular piece of land measuring 440 square feet, which was coloured red on the plan attached to the conveyance and effectively supplied the “missing” corner of the KCH site,

“together with a right of way for all purposes for the Purchaser and all persons authorised by him in common with the Vendors and all persons authorised by them over the piece of land delineated and coloured blue on the said plan between the roadway in part coloured green and in part hatched red on the said plan on the one hand and any building erected on the pieces of land coloured red and edged green respectively on the said plan on the other hand …”

The land coloured red and the land edged green together comprise the whole of the land to which I have referred as the KCH land. The land coloured blue over which this right of way is granted is a triangular area that abuts what is now the eastern archway of the KCH on the one side and the public highway of Scarsdale Place on the other, western side. I shall refer to it, as it was referred to at trial, as “the blue triangle” and it is indicated on the attached plan. Dependent upon the scope of this right of way, it would enable a vehicle to gain access to or exit from the KCH through the eastern archway from or to Scarsdale Place. The eastern archway was originally 2.7 metres wide at its narrowest point, sufficient to accommodate a car or small van. In late 2007 the defendant carried out works to widen this archway and it is now a minimum of 3.7 metres wide, thereby permitting the passage of much larger vehicles (but not coaches because of the height of the archway). It is common ground that the defendant enjoys the benefit of the right of way granted by the 1938 Conveyance. The issue between the parties is as to the scope of this right. That is a question of construction of the 1938 Conveyance.

The second instrument is a licence dated 30 January 1973 (“the 1973 Licence”) between Aerlinte Eireann Teoranta, the then owner of the site of the Tara Hotel, and KCL granting KCL a right to use the TRR “for the purpose of ingress to and egress from the [KCH land] with or without vehicles.”. It will be necessary to set out the terms of the 1973 Licence in more detail below. The licence was for one year, and thereafter from year to year unless determined for breach or by 4 weeks notice before any anniversary, and in consideration of the payment of £1 a year “if demanded as an acknowledgment that the enjoyment of the said way is under this Agreement and not otherwise.”

It is now common ground that this licence was personal to KCL. Accordingly, the 1973 Licence terminated on the dissolution of KCL on 14 July 1988. Furthermore, usage of the TRR by or for the benefit of the KCH could not have been pursuant to this licence after 31 October 1978, when KCL ceased trading, or at least after 29 May 1980, when KCL ceased to be the owner of the KCH site.

The TRR was used for deliveries to the KCH from 1973 onwards, on a daily basis. This included all the usual kind of deliveries and servicing one would expect for a major hotel: for example, food and beverage supplies, laundry and waste collection. Service vehicles would go clockwise round the TRR and then enter the KCH service area through the south service gate. At least at one stage, smaller vehicles then continued up the internal KCH service road to exit through the eastern archway; but most vehicles returned to the TRR through the north service gate and continued up the TRR to the public roadway of Scarsdale Place. There was dispute as to whether, and to what extent, the TRR was also used by coaches serving the KCH.

Use of the TRR by vehicles serving the KCH did not in general cause a problem, save that there were occasional discussions of the kind one would expect when the TRR became congested by traffic or unloading. On the whole, throughout a long period, there were very good and cooperative relations between the managements of the two neighbouring hotels. However, by letter dated 10 August 2007, the solicitors to the claimant wrote to the managing director of the defendant asserting that it had no rights of access over the TRR and that use of the TRR by the KCH and its agents constituted a trespass that should cease with immediate effect. The letter asserted that as the 1973 Licence was personal to KCL, it cannot assist the defendant, but in the alternative gave notice terminating that licence as from 30 January 2008.

It appears the claimant’s solicitors’ letter was not occasioned by any issue that arose over use of the TRR but followed the breakdown of discussions between the owners of the claimant and the defendant for a joint project to develop the combined sites of the two hotels. But that is by way of background: it is not material to any issues which I have to decide.

In response to this solicitors’ letter, the defendant contended that it has acquired by prescription a right of way over the TRR; and, although very much as second best, that it has by the 1938 Conveyance a right of way over the blue triangle.

By its claim issued on 24 September 2007, the claimant seeks an injunction to restrain the defendant, its servants agents or invitees, from trespassing on the TRR, and damages for trespass. It similarly claims that the defendant has been crossing the blue triangle with vehicles larger than those that would have fitted through the archway prior to the widening of the archway which use is also alleged to constitute a trespass.

By its defence, the defendant contends that it has acquired an easement by prescription over the TRR, either under the Prescription Act 1832 or by lost modern grant. At least 20 years continuous use of the TRR is alleged as from 31 October 1978 (when KCL ceased trading), alternatively 29 May 1980 (when KCL ceased to own the land), although in its closing at trial the defendant based its case only on the period after May 1980. The defence also contends that the right over the blue triangle granted by the 1938 Conveyance is not restricted to vehicles of any particular size. In its pleaded defence, the defendant also alleges in the alternative that it acquired a right over the blue triangle by prescription, but that allegation did not feature in the argument, no doubt since on the facts no wider right could be acquired by prescription than would arise under the 1938 Conveyance. The defendant counterclaims for declarations that it has “a pedestrian and vehicular right of way” for the purpose of gaining access to the KCH, over the TRR and also over the blue triangle.

By order of 21 October 2009, the trial was to cover all issues other than the quantum of any damages. The main issues, as they emerged in the course of the trial, that fall to be decided are as follows:

I received evidence from no less than 34 factual witnesses, of whom five gave statements covered by notices under the Civil Evidence Act 1995 and a further five were not challenged and thus not called to give oral testimony. That included evidence from managers and staff of the two hotels going back very many years. It is a tribute to the management of both hotels that they have retained the loyalty of so many of their staff, at all levels, for such a long period.

In fact, there was much common ground and very few areas of factual dispute. Such dispute as there was I consider of limited relevance. I find that all the factual witnesses were doing their best genuinely to recall matters, many of which were from long ago and some of which related to questions of detail.

I also heard evidence from two experts on traffic management. Between them, they produced a plethora of photographs and diagrams. While the photographs and plans were certainly helpful, as regards the substance of their evidence on only very few points did I find it of any assistance on the matters I have to resolve.

I set out below the factual findings, additional to those already stated in the Introduction, that are relevant to the legal analysis and conclusions. These concern: (a) knowledge of the 1973 Licence; (b) knowledge of the changes in ownership of the KCH; and (c) the use of the TRR by coaches and small vans.

After the entry into the 1973 Licence, over many years most of those involved in the management of the two hotels do not appear to have given it any thought, insofar as they were aware of it at all, and no one actually looked at its terms before an in-house solicitor at Millenium & Copthorne Hotels Plc was asked to check the basis on which the KCH used the TRR in August 2006.

On the Tara Hotel side, there was evidence that Mr Eion Dillon, the hotel’s general manager until 1992, referred in discussions with his senior managers to the fact that the use by the KCH of the TRR was pursuant to an agreement, and that when problems arose over congestion of the TRR caused by vehicles servicing the KCH he raised the prospect of terminating the agreement. But there is no evidence that he ever made such a threat to the KCH management or that he ever looked at the terms of the 1973 Licence or sought advice about it. Those involved in the management of the Tara Hotel knew that the TRR was on their land, and their general view was that there was some sort of agreement which permitted the KCH to use it. No one appears to have appreciated that the original licence agreement was personal to the original owners of the KCH such that it would not apply if and when they ceased to operate the hotel or, at the latest, own the KCH land. Indeed, even when the in-house solicitor actually looked at the document in August 2006, she did not appreciate that the 1973 Licence was personal to KCL.

On the KCH side, KCL was obviously involved in negotiating the Licence in 1973. But the defendant was able to call evidence going back to 1967 in the form of Mr William Lemon, the hotel’s general manager over the period 1967-79. He also assumed that the use of the TRR was by mutual agreement with the owners of the Tara Hotel, but he was not aware of the express licence. Although he came to know Mr Dillon well over the years, he was clear that Mr Dillon never mentioned the possibility of restricting KCH’s use of the TRR, something that he said he would have recalled as it would have so surprised him. Mr Lemon’s successors as general manager, Mr Andreas Voegl and Mr Brian Murphy, both said that they were wholly unaware of there being any written agreement governing use of the TRR or that permission to use it could be withdrawn or restricted. Only Mr Ian Philip, who was general manager of the KCH from 2002 to 2006, said that he understood that the KCH vehicles using the TRR did so by permission from the Tara Hotel because Mr Bakir Cola, the chairman of Cola Holdings Ltd, told him that it was a right which the Tara Hotel could withdraw. Mr Cola denied ever having said that but for reasons that will appear below, I do not consider it necessary to resolve that conflict of evidence.

As I have mentioned, the relations between the management of the KCH and Tara Hotel were good throughout. In particular, when either hotel was over-booked, something that doubtless occurred more at particular times of the year but nonetheless appears not to have been unusual and was referred to by virtually all the managers who gave evidence, then it was the practice to ask the other hotel to accommodate those guests. In those circumstances, the accommodating hotel would send an invoice to the hotel which made the request. The invoices from the KCH would bear the VAT number of the company operating the hotel, and they were dealt with routinely in the accounts department of the Tara Hotel. Presumably the invoices would reflect the change in the VAT number when ownership of the KCH passed to a different company in the THF group; unsurprisingly, it was not possible after this length of time to produce a paper trail of such documentation reflecting these changes. At some time in the 1990s, the Tara Hotel started to make such payments by BACS transfer; previously individual cheques would have been sent.

Although some employees in the Tara Hotel accounts department must therefore at certain points have become aware that a different company had become involved in the running of the KCH, I do not regard that knowledge as attributable to more senior management, still less to the directing minds of the claimant. I find that none of the senior managers were actually aware of the various intra-group transfers regarding the KCH that took place within THF before 1996. On the evidence, I do not consider that these involved any significant or noticeable re-branding of the hotel. The management of the Tara Hotel was well aware of the hostile takeover of THF by Granada in early 1996. As one of the claimant’s witnesses observed, everyone in the hotel industry knew about that. As the Granada takeover was a shareholding acquisition, it did not necessarily involve a change in the company directly owning the hotel. However, the transfer to Post Houses Ltd, which took place some months after the Granada takeover, led not only to significant refurbishment but also to rebranding the hotel as a Posthouse that involved changing all the hotel signage. Mr Redmond Walsh, who was general manager of the KCH following the Granada acquisition until April 1999, said in his (unchallenged) evidence:

“I think that Tara would have noticed the transfer of ownership from Forte (UK) Limited to Posthouses Limited in 1996 because of the rebranding, and through invoicing and correspondence. I remember also that during this period various planning notices were on display outside the Hotel relating to the works being carried out. These notices may have featured the name of Posthouses Limited as the owner of the Hotel at the time. I think that these would have come to Tara’s attention.”

The correspondence to which Mr Walsh referred included his letters as chairman of the Kensington High Street Association that he wrote on the KCH’s headed notepaper which bore the name of the corporate owner and which would always go to the Tara Hotel.

Mr Michael Smal, who had been financial controller at the Tara Hotel but had left by this stage, accepted in general terms that rebranding could put one on notice that there was possibly a change in the owner. Some of the defendant’s witnesses who worked at the Tara Hotel at the time said that they regarded “Posthouse” as just another THF brand, there was little evidence from those involved in senior management of the Tara Hotel as at 1996. Whether or not the management of the Tara Hotel, such as Mr Walsh’s counterpart there as general manager, actually realised that the ownership of the KCH changed following the Granada takeover, I consider that there was sufficient in the circumstances I have described to put them on notice that this may be the case.

Further, upon the acquisition of the KCH by the Cola group in 2002 there was, on the evidence, express knowledge on the part of the claimant regarding a change in ownership of KCH.

It is agreed that the original width of the eastern archway to the KCH was 2.7 metres, at its narrowest point. That was sufficient to permit easy exit by cars leaving the hotel car park, but it clearly limited the size of commercial vehicle that could use the archway for entry and egress. Mr Liddell, the claimant’s expert, accepted that a vehicle up to a 4.6 tonne van would have been able to exit through the unwidened archway. Larger vans and coaches could not use the archway. It is necessary to determine whether and to what extent the TRR was used by coaches serving the KCH and also by small vans of a kind that could have passed through the unwidened eastern archway.

I have explained above that the KCH originally provided serviced apartments and that only in the mid-1970s did it become fully a hotel. However, by that stage, it is clear that a significant number of coaches were coming to deliver and pick up guests at the hotel on a regular basis. They have continued to do so ever since.

It is obviously possible for a coach approaching the KCH down Wrights Lane to turn right and then reverse back into Scarsdale Place to reach the hotel; or to turn left into Scarsdale Place and then depart by reversing back up Cheniston Gardens before turning left up Wrights Lane. There was evidence that coaches sometimes performed these manoeuvres. Mr Lemon, the general manager of the KCH from 1967 to early 1979, said he was sure that coaches serving the KCH did not use the TRR during the time that he was there; and his successor, Mr Voegl, who stayed until November 1980, thought that this remained the position. However, while I accept that was the case during the earlier period I am entirely satisfied that there was regular use of the TRR by coaches serving the KCH from the late 1970s to at least the commencement of these proceedings (i.e., September 2007). I reach that conclusion on the basis of the evidence of the coach drivers and in particular Mr David Pink, who has been taking passengers to the KCH (as well as to the Tara Hotel) since the mid-1970s and who was very clear and unequivocal in his account: he said that he would only occasionally use one of the other means to turn, if there was a lot of traffic on the TRR. Mr Phillip Seaward, whose evidence was not challenged, gave a very similar account, as someone who had driven coaches to the KCH from 1992 to about 2007, often once or twice a day. He said:

“When I delivered passengers to the Kensington Close Hotel I would always use the Tara Ring Road to turn around my vehicle. My method would always be to arrive [at] Scarsdale Place, enter the Tara Ring Road, use it to turn the coach around and then drop off the passengers in front of the Kensington Close Hotel when my coach was away from the London Tara Hotel. I did this because there was a single yellow line directly in front of the Kensington Close Hotel which would be used for drop offs. I believe all or most of the coach drivers going to the Kensington Close Hotel did the same.”

And he added:

“I would also say that the use by coaches of the Tara Ring Road was pretty obvious. When we pulled up outside the Kensington Close Hotel after having turned around, our drop-off at the Kensington Close Hotel would have been clear to see. In fact there are occasions when coaches queue[d] up to drop off at the Kensington Close having used the Tara Ring Road to turn around and this happens on the Ring Road just before it joins Scarsdale Place, which is very visible to Tara staff.”

Although neither Mr Seaward nor the third coach driver to give evidence, Mr Cassell, cover the years before 1990, there is no discernible reason to suppose that they introduced a new method of dropping off passengers at the KCH that had not been used by coach drivers before, and Mr Pink’s evidence fully supports the inference that they were continuing an existing practice. Moreover, that is fully borne out by Mr Billy Boyle, a witness called by the claimant who has been the doorman at the Tara Hotel from 1976 to the present. He was therefore generally stationed outside the main entrance of the Tara Hotel, in an ideal position to observe the pattern of coach traffic. He said that he saw “KCH coaches” using the TRR “all the time”. Insofar as it is necessary to decide as between the evidence of the two general managers of the KCH (and in particular Mr Voegl for the period January 1979 – November 1980) on the one hand and that of the coach drivers and the doorman at the Tara Hotel on the other, I prefer the latter since they were more directly involved whereas the route taken by coaches was hardly a matter of particular concern to the KCH general manager. I note also that Mr Voegl’s successor at the KCH, Mr Murphy, believed that most coaches serving the hotel went round the TRR.

Small vans

Small vans could fit through the unwidened archway but there was evidence that from a certain stage a rubbish compactor stood on the internal KCH service road between the service gates and the exit from the basement car park. Several of the witnesses were clear (and I so find) that this compactor made it impossible for small vans to drive straight on up the internal KCH road towards the archway and that they accordingly had to leave by the north service gate back onto the TRR. Although Mr John Brocking, who was a surveyor working for THF, considered that the rubbish compactor was kept further south and permitted vans to drive around it, he dealt with the KCH only up to 1979 and accepted that he visited the hotel relatively infrequently. By contrast, Mr John Williams, who worked at the Tara Hotel in the maintenance department from the opening of the hotel until 2002 and was thus often outside the building, said that the compactor was located between the two service gates from the late 1970s; and Mr Keith Johnson, who worked at the KCH since 1982, at first in the food and beverage department where he regularly dealt with incoming deliveries, similarly recalled that the food waste was placed in a large bin south of the exit from the hotel car park that blocked the passage for vans up the internal service road towards the archway, and necessitated their exit through the service gates onto the TRR. His recollection was that this went on for many years until the 1990s. The evidence of Mr Robert Stanbridge, who worked in security and was thus often checking on matters outside the building until 1994, supported this account.

Moreover, there was unchallenged evidence from three independent bakery delivery drivers who delivered to the KCH virtually on a daily basis, covering the period from 1985 onwards, that they had to exit the KCH service area through the gates to the TRR since the route up to the arch was blocked by a skip or waste from the hotel.

Accordingly, I find that egress for vans up to the archway was blocked in this way at least from 1979 until at least 2001; and that small vans delivering to the KCH therefore regularly exited by one of the service gates onto the TRR and not by continuing straight on and out through the archway.

The TRR is defined in the 1973 Licence as the area hatched green, brown and yellow on an attached plan. The green area is that section of private road to the north and east, adjoining the forecourt of the Tara Hotel that permits access between the ring road and Scarsdale Place. The brown area is that part of the TRR on the western side from point of the southern service gate up to the start of the green area. The rest of the TRR on the plan is coloured yellow.

Clause 2 of the Licence provides, insofar as material:

“(a)

[KCL] hereby admits that it has no right to use the [TRR] or any part thereof except by the licence of the [Licensor].

(b)

The [Licensor] hereby grants unto [KCL] licence to use and enjoy the [TRR] for the purpose of ingress to and egress from the [KCH land] with or without vehicles for the limit of one year from the date hereof and so on from year to year unless and until the licence hereby granted shall be determined in manner hereinafter appearing.

(c)

In consideration of the foregoing [KCL] will on the thirty-first day of January in every year during the subsistence of the licence hereby granted pay to the [Licensor] the sum of One pound (£1) if demanded as an acknowledgement that the enjoyment of the said way is had under this Agreement and not otherwise.”

The Schedule includes the following important restrictions and stipulations:

“1.

No person shall be entitled to exercise the rights hereby granted except [KCL] its servants and agents and those having bona fide and lawful business with [KCL] (other than residents of or visitors to the said Kensington Close Hotel).

…

4.

The rights granted in respect of that part of the [TRR] shown hatched brown on the said plan “A” shall not be exercised except for the purpose of permitting the egress from the [KCH] of those vehicles as are of such size as to be unable to leave the [KCH land] by any other exit.”

There is also provision to the effect that use of the TRR must be made in a clockwise direction; that KCL shall make good at its own expense any damage to the Tara Hotel property caused by its use of the TRR; and that the KCL shall indemnify the licensor against any claims brought against it by reason of the exercise of the rights granted under the Licence.

It is thus clear that the right to use the TRR was not granted to guests staying at the hotel or their visitors. That obviously excludes private cars and it was accepted for the claimant that taxis are similarly excluded. In my view, the exclusion also applies to coaches carrying guests to the hotel. I reach that view both as a matter of wording, since I do not see a logical distinction between guests being carried by a taxi or friend and guests being carried by a coach, and having regard to the factual background at the time the Licence was entered into. That is explained in a witness statement of the Tara Hotel’s architect, Mr Maurice Phillips, who sadly died during the course of this trial.

Mr Phillips realised that access off Scarsdale Place posed problems for the Tara site. In his words:

“The KCH service entrance adjacent to the Tara entrance, was completely unsuitable, mainly because of the size of the arch entrance and the lack of turning space within their service area. This resulted in congestion in Scarsdale Place with vehicles delivering to or collecting up from the KCH waiting or actually unloading in the street causing blockages and what would be a potentially unsightly introduction to the Tara site.

The solution to relieving the congestion this caused in Scarsdale Place, (which was a solution I identified and suggested), was to give the KCH access to their service yard from our intended ring road through the boundary between the two sites. … I saw no reason why Aer Lingus should not also allow KCH to use this road if that would resolve the problem caused by their delivery vehicles obstructing Scarsdale Place.”

It is clear, as Mr Phillips indeed states, that his suggestion was taken up and led to the grant of the 1973 Licence.

Moreover, I consider that this interpretation is confirmed by paragraph 4 of the Schedule and the restriction on use of the brown section of the TRR. It is to be used only for “egress from the [KCH] premises” of vehicles that could not pass through the KCH eastern archway. That directly reflects the background to the Licence, namely the restriction on service vehicles using the KCH service area which resulted from the size of that archway. Hence smaller vans that could leave through the archway were not allowed back onto the TRR after making their delivery or collection in the KCH service area. But coaches would not use that service area at all: they would drop off and pick up guests at the hotel entrance. Thus any potential use by coaches of the brown section of the TRR would not be for egress from the KCH but as part of a continuous ring road used as a turning area – as indeed subsequently occurred. The reason for the Licence was to deal specifically with the problem of service vehicles and the exclusion in clause 2(a) is to be interpreted accordingly.

As already indicated, the defendant alleges that it has acquired a right to use the TRR by prescription, either under section 2 of the Prescription Act 1832 (“the 1832 Act”) or by a lost modern grant. The difference between those two grounds is that under the 1832 Act, the use by the defendant must have been for 20 years before action brought whereas under the doctrine of a lost modern grant the period of 20 years can expire at an earlier time. Indeed, the requirement under the 1832 Act to show 20 years’ enjoyment immediately before action brought has been explained as resulting from the draftsman’s confusion of the working of a system of limitation of actions with a system of acquisitive prescription: see Simpson, A History of the Land Law (2^nd edn, 1986), p. 268.

The law on the acquisition of a right by prescription has been authoritatively considered in a trilogy of recent cases, two in the House of Lords and one in the Supreme Court, where it is in effect brought back to first principles: R v Oxfordshire CC, ex p Sunningwell PC [2000] 1 AC 335; R (Beresford) v Sunderland City Council [2003] UKHL 60, [2004] 1 AC 889; and R (Lewis) v Redcar & Cleveland BC (No 2) [2010] UKSC 11, [2010] 2 WLR 653. Although all these cases concerned the question of the registration of a village green under statute, the terms of the relevant statute incorporate considerations derived directly from the law on prescription. The earlier decisions on prescription, and in particular general formulations which they contain, must now be read subject to the statements in these recent judgments of highest authority.

The doctrine concerning the acquisition of an easement by prescription, whether under the doctrine of the lost modern grant or under the 1832 Act, rests on the fiction of an assumed grant of the right. As Lord Hoffmann states in his magisterial judgment in Sunningwell (with which the other members of the House of Lords agreed), the law came to focus in that regard on the quality of the 20-year user that would justify recognition of such a prescriptive right:

“It became established that such user had to be, in the Latin phrase, nec vi, nec clam, nec precario: not by force, nor stealth, nor the licence of the owner…. The unifying element in these three vitiating circumstances was that each constituted a reason why it would not have been reasonable to expect the owner to resist the exercise of the right - in the first case, because rights should not be acquired by the use of force, in the second, because the owner would not have known of the user and in the third, because he had consented to the user, but for a limited period. So in Dalton v. Angus & Co. (1881) 6 App.Cas. 740, 773, Fry J. (advising the House of Lords) was able to rationalise the law of prescription as follows:

“the whole-law of prescription and the whole law which governs the presumption or inference of a grant or covenant rest upon acquiescence. The courts and the judges have had recourse to various expedients for quieting the possession of persons in the exercise of rights which have not been resisted by the persons against whom they are exercised, but in all cases it appears to me that acquiescence and nothing else is the principle upon which these expedients rest.” ”

After referring to the 1832 Act, Lord Hoffmann continued:

“Thus in a claim under the Act, what mattered was the quality of enjoyment during the 20-year period. It had to be by a person "claiming right thereto" or, in the language of section 5 of the same Act (as amended by the Act of 1888), which dealt with the forms of pleadings, "as of right." In Bright v. Walker (1834) 1 C.M. & R. 211, 219, two years after the passing of the Act, Parke B. explained what these words meant. He said that the right must have been enjoyed "openly and in the manner that a person rightfully entitled would have used it" and not by stealth or by licence. In Gardner v. Hodgson's Kingston Brewery Co. Ltd. [1903] A.C. 229, 239, Lord Lindley said that the words "as of right" were intended "to have the same meaning as the older expression nec vi, nec clam, nec precario." (See also per Cotton L.J. in Earl De la Warr v. Miles (1881) 17 Ch. D. 535, 596.)”

Lord Hoffmann accordingly held that, as the English doctrine of prescription depends on acquiescence by the servient landowner, an inquiry into the state of mind of the user of the right of way is irrelevant. He stated (at 355H-356D):

“There is in my view an unbroken line of descent from the common law concept of nec vi, nec clam, nec precario to the term "as of right" in the Acts of 1832, 1932 and 1965. It is perhaps worth observing that when the Act of 1832 was passed, the parties to an action were not even competent witnesses and I think that Parke B. would have been startled by the proposition that a plaintiff asserting a private right of way on the basis of his user had to prove his subjective state of mind. In the case of public rights, evidence of reputation of the existence of the right was always admissible and formed the subject of a special exception to the hearsay rule. But that is not at all the same thing as evidence of the individual states of mind of people who used the way. In the normal case, of course, outward appearance and inward belief will coincide. A person who believes he has the right to use a footpath will use it in the way in which a person having such a right would use it. But user which is apparently as of right cannot be discounted merely because, as will often be the case, many of the users over a long period were subjectively indifferent as to whether a right existed, or even had private knowledge that it did not. Where Parliament has provided for the creation of rights by 20 years' user, it is almost inevitable that user in the earlier years will have been without any very confident belief in the existence of a legal right. But that does not mean that it must be ignored.”

As Lord Walker observed in Beresford, user “as of right” does not mean user “of right” and it has been suggested that its meaning is closer to “as if of right.”

Moreover, the licence or permission of the servient owner to use his land requires some unequivocal, overt act to that effect on his part if it is to preclude such use being “as of right”; mere tolerance of the use without objection is not sufficient. In Beresford, the City Council resisted the registration of an area of parkland as a village green on the basis that it had mowed the lawn and erected seating around the perimeter for the public, thereby encouraging the use of the area for recreation and, the Council argued, impliedly giving a licence to local inhabitants to use the land in this way. That argument was unanimously rejected by the House of Lords. Lord Bingham accepted that in principle an implied licence could be found where the facts justified this, but he explained (at [5]-[6]):

“A landowner may so conduct himself as to make clear, even in the absence of any express statement, notice or record, that the inhabitants' use of the land is pursuant to his permission. This may be done, for example, by excluding the inhabitants when the landowner wishes to use the land for his own purposes, or by excluding the inhabitants on occasional days: the landowner in this way asserts his right to exclude, and so makes plain that the inhabitants' use on other occasions occurs because he does not choose on those occasions to exercise his right to exclude and so permits such use.

Authority, however, establishes that a licence to use land cannot be implied from mere inaction of a landowner with knowledge of the use to which his land is being put.”

Among the cases cited by Lord Bingham is the Court of Appeal decision in Mills v Silver [1991] Ch 271, from which he quoted with approval the statement by Parker LJ (at 290):

"The true approach is to determine the character of the acts of user or enjoyment relied on. If they are sufficient to amount to an assertion of a continuous right, continue for the requisite period, are actually or presumptively known to the owner of the servient tenement and such owner does nothing that is sufficient ... I add only this, that any statement that the enjoyment must be against the will of the servient owner cannot mean more than 'without objection by the servient owner'. If it did, a claimant would have to prove that the right was contested and thereby defeat his own claim."

Lords Hutton, Rodger and Walker agreed with Lord Bingham’s judgment, and Lord Rodger gave his own judgment (with which Lords Bingham, Hutton and Walker in turn agreed) in which he said (at [60]-[61]):

“In the present case the owners did not expressly license the use of the land by the public. The council rely on two circumstances, however, as justifying the inference that those who used the sports arena did so precario, merely by licence from the owners of the land. The first is that the owners cut the grass. But that is at least equally explicable on the basis that the owners were concerned, as many owners would be, for the appearance of such a large and prominent area of open land in the heart of the town. Like charity, care of amenities begins at home. The second matter relied on is the, now rather dilapidated, wooden seating along the perimeter. Whatever may have been its original purpose, the continued existence of the seating is consistent with the owners of the land having acquiesced, perhaps quite happily, in people using the area for football or other games which their friends or relatives would wish, or feel obliged, to watch. To an extent the owners may thus have encouraged these activities. The mere fact that a landowner encourages an activity on his land does not indicate, however, that it takes place only by virtue of his revocable permission. In brief, neither cutting the grass nor constructing and leaving the seating in place justifies an inference that the owners of the sports arena positively granted a licence to local residents and others, who were then to be regarded as using the land by virtue of that licence, which the owners could withdraw at any time.

In these circumstances I would conclude that local people used the land nec precario.”

Lord Walker in his judgment (with which Lords Bingham, Hutton and Rodger agreed) emphasised the importance when deciding whether user was by permission of looking at the overt conduct of those involved, including “what the landowner [of the servient land] said and did from time to time during the period which the court has to examine”. Hence the making of a charge for entry to land would constitute an overt act demonstrating that such entry was not as of right, as would the occasional closure of access to the land. But “[a] landowner who wishes to stop the acquisition of prescriptive rights over his land must not acquiesce and suffer in silence”. Lord Walker continued (at [79]):

“Acquiescence, by contrast, denotes passive inactivity. The law sometimes treats acquiescence as equivalent in its effect to actual consent. In particular, acquiescence may lead to a person losing his right to complain of something just as if he had agreed to it beforehand. In this area of the law it would be quite wrong, in my opinion, to treat a landowner's silent passive acquiescence in persons using his land as having the same effect as permission communicated (whether in writing, by spoken words, or by overt and unequivocal conduct) to those persons. To do so would be to reward inactivity; despite his failing to act, and indeed simply by his failure to act, the landowner would change the quality of the use being made of his land from use as of right to use which is (in the sense of the Latin maxim) precarious.”

In the Redcar case, an important issue was whether the effect of statutory registration as a village green would enlarge the manner in which the local inhabitants were entitled to use the land, to the detriment of the landowner. The Supreme Court unanimously held that it would not, but the question of whether a high test had to be imposed before user could be “as of right” so as to qualify for registration was considered in the context where it was argued that registration would bring such extreme consequences. A group of local inhabitants sought registration as a village green of land on the basis of more than 20 years continuous user for dog-walking and recreation, where the land had formed part of a golf course. Registration was resisted on the basis that members of the public used to defer to the golfers, waiting until play had passed or the golfers waved them across, and that such deference was inconsistent with user being “as of right”.

That submission was rejected by all the Supreme Court Justices, who emphasised that it was necessary to focus on the quality of the user. Lord Walker JSC said, at [36]:

“… I have no difficulty in accepting that Lord Hoffmann was absolutely right, in Sunningwell  [2000] 1 AC 335, to say that the English theory of prescription is concerned with "how the matter would have appeared to the owner of the land" (or if there was an absentee owner, to a reasonable owner who was on the spot). But I have great difficulty in seeing how a reasonable owner would have concluded that the residents were not asserting a right to take recreation on the disputed land, simply because they normally showed civility (or, in the inspector's word, deference) towards members of the golf club who were out playing golf. It is not as if the residents took to their heels and vacated the land whenever they saw a golfer. They simply acted (as all the members of the court agree, in much the same terms) with courtesy and common sense. But courteous and sensible though they were (with occasional exceptions) the fact remains that they were regularly, in large numbers, crossing the fairways as well as walking on the rough, and often (it seems) failing to clear up after their dogs when they defecated. A reasonably alert owner of the land could not have failed to recognise that this user was the assertion of a right and would mature into an established right unless the owner took action to stop it ….”

Lord Hope DPSC noted that the inhabitants must have been indulging in sports or pastimes on the land “as of right” and continued (at [67]):

“that is to say, openly and in the manner that a person rightfully entitled would have used it. If the user for at least 20 years was of such amount and in such manner as would reasonably be regarded as being the assertion of a public right (see  R (Beresford) v Sunderland City Council  [2004] 1 AC 889, paras 6, 77), the owner will be taken to have acquiesced in it- unless he can claim that one of the three vitiating circumstances applied in his case. If he does, the second question is whether that claim can be made out. Once the second question is out of the way- either because it has not been asked, or because it has been answered against the owner- that is an end of the matter. There is no third question.”

That is a reference to the issue raised as to whether it was necessary to ask the further question, “whether it would have appeared to a reasonable landowner that users were asserting a right to use the land for the lawful sports and pastimes in which they were indulging”: see at [53].

Lord Rodger JSC considered (at [87]) that the Latin expression nec vi, nec clam, nec precario “is perhaps best captured by putting the point more positively: the user must be peaceable, open and not based on any licence from the owner of the land.” Since the use by the inhabitants fulfilled those criteria, “prima facie, the inhabitants did everything that was necessary to bring home to the council, if they were reasonably alert, that the inhabitants were using the land for recreation ‘as of right’": [93]. The fact that they deferred to the golfers could not be regarded as creating the inference that they were not asserting a right over the land. It could not be inferred that they were aware of the legal position or that they were deferring to the golfers “because of a conscious decision on their part to respect the superior rights of the owners of the land”: [95]. That could only be the case if there were no other plausible explanation for their conduct.

Lord Brown JSC held, at [107]:

“I see no good reason whatever to superimpose upon the conventional tripartite test for the registration of land which has been extensively used by local inhabitants for recreational purposes a further requirement that it would appear to a reasonable landowner that the users were asserting a right to use the land for the lawful sports and pastimes in which they were indulging. As Lord Walker of Gestingthorpe JSC has explained, there is nothing in the extensive jurisprudence on this subject to compel the imposition of any such additional test. Rather, as Lord Hope of Craighead DPSC, Lord Walker and Lord Kerr of Tonaghmore JJSC make plain, the focus must always be on the way the land has been used by the locals and, above all, the quality of that user.”

Finally, Lord Kerr JSC stated (at [114]) that he was

“in emphatic agreement with Lord Hope DPSC in his view that one must focus on the way in which the lands have been used by the inhabitants. Have they used them as if they had the right to use them? This question does not require any examination of whether they believed that they had the right. That is irrelevant. The question is whether they acted in a way that was comparable to the exercise of an existing right?”

And he concluded (at [116]):

“… I am content to accept and agree with the judgments of Lord Hope DPSC, Lord Walker and Lord Brown JJSC that no overarching requirement concerning the outward appearance of the manner in which the local inhabitants used the land is to be imported into the tripartite test. The inhabitants must have used it as if of right but that requirement is satisfied if the use has been open in the sense that they have used it as one would expect those who had the right to do so would have used it; that the use of the lands did not take place in secret; and that it was not on foot of permission from the owner. If the use of the lands has taken place in such circumstances, it is unnecessary to inquire further as to whether it would be reasonable for the owner to resist the local inhabitants' use of the lands. Put simply, if confronted by such use over a period of 20 years, it is ipso facto reasonable to expect an owner to resist or restrict the use if he wishes to avoid the possibility of registration.”

It may be that some of the observations in Redcar should not be applied to private rights of way and there are perhaps some differences of emphasis as between the five judgments. But I consider that the relevant principle for present purposes is that open use, in the way in which someone who had the right to do so would exercise that right, will constitute use “as of right” if it is nec vi, nec clam, nec precario. Hence, if the user or users expressly indicate that they do not intend to assert a right, then their use will not be “as of right”, and the same applies if the nature of the use clearly establishes that inference.

In the present case, the assertion of a prescriptive right of way depends on use in the period after KCL transferred the freehold of the KCH land in May 1980. There is no question of deference. I can detect nothing in the way those serving the KCH used the TRR that is different from the manner “that a person rightfully entitled would have used it” (adopting Lord Hope’s words). There is no suggestion that it was vi, that is to say by force or contentious. So the critical issues are whether it should be regarded as precario and/or clam.

The claimant asserts that the use was precario as the character of the use was in effect a continuation of that which subsisted under the 1973 Licence, albeit that the licence as such no longer governed the position. There was nothing to suggest to the claimant that the identity of the owner of the KCH had changed and therefore the claimant had no reason to resist or object to the continued user.

However, use of the TRR by and for the benefit of the KCH after May 1980 was either pursuant to permission from the claimant or it was not. I do not see that a mistaken belief that the use was governed by an express agreement granting a licence when as a matter of fact or law it was not can affect the position. That would introduce into the operation of prescription a subjective element which forms no part of this area of the law and would add to its complication. Presumably, it would then be necessary to ask whether the mistake was reasonable. If, as I have held, use of the TRR by coaches was never within the terms of the 1973 Licence, was it reasonable for the claimant to have believed that it was; and does that depend on whether the claimant should have taken legal advice? In my judgment, the determination of a prescriptive right does not involve considerations of that kind.

The claimant relied in particular on Healey v Hawkins [1968] 1 WLR 1967, and the statement by Goff J (at 1973C) that:

“In principle it seems to me that once permission has been given, the user must remain permissive and not be capable of ripening into a right save where the permission is oral and the user has continued for 40 or 60 years, unless and until, having been given for a limited period only, it expires or, being general, it is revoked, or there is a change in circumstances from which revocation may fairly be implied.”

However, that passage is not to be read and applied as if it was a statute. It was expressed in the context of a case where the defendant’s predecessor in title had originally used a driveway on the plaintiff’s land only occasionally in wet weather, when he had been given permission to do so; but the judge found that after his purchase of a motor-car in 1938 he had regularly used the driveway without permission. In those circumstances, the judge could readily determine that the original permission no longer applied, a determination which, as Goff J made clear, was a question of fact depending on the evidence. Goff J’s statement of the wider circumstances in which permission would continue was accordingly obiter. But in any event, he there expressed the view that use after the expiry of a licence granted for a limited period would not be permissive. Accordingly, if a licence was granted for, say, 10 years but a right of way continued to be exercised thereafter without objection because the owner of the servient land did not realise that the licence had expired but believed that it continued to apply, that later use would not be precario and could (if it continued for 20 years) establish a prescriptive right. In my view the position should in general be the same if the licence was a personal licence to a particular user, and the right of way continued to be exercised without objection after a change in the identity of the occupier of the dominant land, because the owner of the servient land had not realised that the identity of his neighbour had changed but believed that the licence continued to apply. The only difference between the two situations is that in the former case the licensor would know from the outset that the licence would cease to apply after a fixed period of years and would not need to make any further inquiry, whereas in the latter case he would know that there was a real possibility that the licence would cease to apply at some point in the future and he may need to make occasional inquiry of the person exercising the right to establish if this had happened. I do not regard that as a principled basis of distinction as regards the precario condition, especially bearing in mind that the foundation of the doctrine of prescription is acquiescence and that mere inactivity by the servient owner can lead to the acquisition of a prescriptive right.

I do not see that this interpretation of the law involves any hardship for the claimant. The 1973 Licence was expressly framed as a personal licence and no doubt for good reason, since the positive obligations in the licence regarding payment for damage and indemnification would probably not be enforceable against a successor in title to KCL. The Licence provided for payment of consideration of £1 a year, and if the claimant had been concerned to protect the permissive character of the use, it could simply have asked for this payment. That would have established an implied licence should there be any risk that the express licence had lapsed: see per Lord Walker in Beresford. However, there is no suggestion that it ever troubled to do so. Alternatively, the claimant would need only to ask the KCH management once every 20 years about the identity of the company owning the land and running the hotel.

In my view, the reality in the present case is that the claimant never appreciated that the 1973 Licence was personal and thus the prospect that it might lapse, until the events that precipitated this litigation in 2007. Had it done so, it might have been prompted to make inquiry after the Granada takeover of THF in January 1996, which was self-evidently a time when a corporate re-structuring might occur; and it would at the very least have realised that the licence ceased to apply after 2002, when the KCH was acquired from THF by the Cola group. Its conduct in 1996 or 2002 of course cannot be “related back” to 1980 so as to attribute to the earlier period acquiescence by the claimant in use of the TRR that was not covered by the 1973 Licence. Nonetheless, the fact that the claimant did not review the position regarding the use of the TRR by the KCH in either 1996 or 2002 is revealing as to the claimant’s lack of appreciation of the implications of a change in the identity of the company that operated the KCH and exercised the right of way.

I do not think that this conclusion is disturbed by the mid-19^th century case of Gaved v Martyn (1865) 19 CB (NS) 732, to which Goff J made reference and on which the claimant strongly relied. The easement there at issue was the right to a watercourse. The plaintiff’s predecessor (Hooper) got permission from the defendant’s predecessor (Geach) to cut a “leat” or stream to carry water from a natural brook on Geach’s land to his land. In 1835, the plaintiff acquired a tenancy to the land and enjoyed the water from this stream until 1855, when the defendant sought to block the flow of water. The trial judge (Channell B) left for the jury the question whether the plaintiff enjoyed the stream as of right, and their verdict was that he did not. The plaintiff sought to set aside that verdict and in the Court of Common Pleas Erle CJ stated: “The question is whether that enjoyment in fact for more than twenty years established an indefeasible right in the plaintiff, or left it as a question for the jury whether the plaintiff was not limited to the same right as Hooper had, viz. by virtue of his agreement with Geach.” Erle CJ continued (at 744-745):

“I think there was evidence from which the jury were warranted in finding that there had not been any enjoyment for twenty years previously to the commencement of the action, by the plaintiff or those through whom he claimed, as of right; but that the enjoyment was precarious, and procured by the permission of the owner of the soil. I do not lay it down as a matter of law that the plaintiff is affected by the licence which Hooper had; but only that the learned judge was bound to leave the question to the jury, and that they were warranted in acting upon it as they have done.”

Willes and Byle JJ agreed with the Chief Justice, but added brief reasoning of their own. Willes J notably stated (at 745):

“If the learned Baron had told the jury that the effect of the agreement between Hooper and Geach was to stamp the character of precariousness on the enjoyment by Gaved, Hooper’s successor, his direction might have been objectionable.”

But the judge had not given such a direction; instead he had left the matter open as a question for the jury on the evidence. The question was therefore:

“…whether there was any evidence from which the jury might properly find that the enjoyment of the leat in question was precarious. A plaintiff who is seeking to establish an enjoyment for the statutable period of twenty years, must, - with this exception, that he need not satisfy the jury of the fact of there having been a lost grant, or that the enjoyment commenced before the time of legal memory, - make out that his enjoyment has been under a claim of right. And I apprehend it would clearly be competent, in answer to such a claim, to shew that the enjoyment originated under an agreement with the tenant or owner of the servient tenement, and therefore was precarious and not as of right: and, upon proof of that fact, it would be for the jury to say whether the tenant of the dominant tenement had not continued the enjoyment in pursuance of a similar agreement, and whether it was not precarious.”

Byles J stated (at 747-748):

“The question left, as far as the foul leat is concerned, was, ‘Has the plaintiff or those through whom he claims had an uninterrupted enjoyment of the leat as of right for more than twenty years?’ The answer is in the negative. It seems to me that the question was rightly put to the jury, and that there was abundant evidence to warrant their answer. The rule was also moved on the ground that the verdict was against the evidence. I think that, if the plaintiff had notice of the circumstance under which Hooper’s enjoyment of the leat began, his subsequent enjoyment was not under a claim of right.”

Insofar as Byles J’s final observation depends on the subjective knowledge of the plaintiff, it cannot stand in the light of Sunningwell But the essential ratio of the case, in my view, is that when there was originally a personal licence granted to the dominant owner, it may be possible to infer the grant of a similar licence to his successor. However, that is not necessarily the position: it is a question of fact, and hence in Gaved v Martyn it was a question for the jury.

Applying that approach to the present case, the question is whether there was an implied licence by the claimant to the owners of the KCH, whether in 1978 or 1980 or at some point in the following 20 years. The claimant indeed advanced its case at trial on the basis of such an implied licence and although such an allegation is not clearly pleaded, it is perhaps the central issue in the case. But the question of an implied licence has now to be considered in the light of the very full judgments in Beresford. The claimant sought to distinguish Beresford on the basis that it was not a case in which prior use had been by an express licence. That is of course correct, but in my judgment it does not provide a basis to ignore the fundamental theme running through the judgments in Beresford that for a licence to be implied there must be some positive, overt act by the servient owner; mere inactivity will not do. In my view, the fact that a carefully drafted personal licence was granted to a particular licensee in 1973 cannot be regarded as a positive act evidencing an implied licence from a different servient owner in 1978 or 1980 (or any time thereafter) for use by a party not within the terms of the earlier licence. And there was no other positive act on which the claimant could rely.

The other authorities referred to by the claimant do not assist on this point. In Bridle v Ruby [1989] QB 169, the plaintiff and his predecessor-in-title used a driveway over adjoining property in the belief that they were entitled to do so by reason of an express grant in the original conveyance of the property by the developers. In fact, they were mistaken: there had been no such express grant. But their use was continuous and uninterrupted for over 20 years, and in those circumstances the Court of Appeal held that their mistaken belief that it was by express grant did not prevent their acquiring a right by prescription. Analysing the earlier cases on mistaken belief, Parker LJ summarised the position as follows (at 177D-E):

“The true position, as exemplified in the  Chamber Colliery  case, 32 Ch.D. 549, is that user in an asserted but mistaken belief that it is justified on a right of limited duration, which belief is acquiesced in, cannot be made the foundation of a grant of unlimited duration. To go as far as saying that no user based on a mistaken belief in a right could found a claim to prescription would be to say that the law will only presume a grant or allow a claim to prescription at common law in favour of someone who is aware that he is a wrongdoer” [my emphasis].

Ralph Gibson LJ agreed, and expressed himself to similar effect (at 178E-F):

“For mistake as to the origin of the right asserted by the user to be relevant, it seems to me that it must be such as to be capable of affecting the way in which the user of the right is conducted by the claimant or in which that user is seen by the owner of the land over which the right is asserted. The requirement that user be "as of right" means that the owner of the land, over which the right is exercised, is given sufficient opportunity of knowing that the claimant by his conduct is asserting the right to do what he is doing without the owner's permission. If the owner is not going to submit to the claim, he has the opportunity to take advice and to decide whether to question the asserted right. The fact that the claimant mistakenly thinks that he derived the right, which he is openly asserting, from a particular source, such as the conveyance to him of his property, does not by itself show that the nature of the user was materially different or would be seen by the owner of the land as other than user as of right.”

Here, there is nothing to suggest an assertion by the owners of the KCH land after 1980 that they were using the TRR pursuant to the 1973 Licence, or indeed some other licence granted by the claimant, in which assertion the claimant could therefore acquiesce. Instead, the claimant simply believed, insofar as it gave the matter any thought at all, that the use by the KCH of the TRR was pursuant to an earlier express licence, without regard to any assumption on the part of the owners of the KCH. The closest the claimant can come to suggest any assertion by the KCH was the registration on 29 October 2002 by the defendant of the benefit of the 1973 Licence in the property registers of the defendant’s title after the defendant had acquired the KCH from THF. There is no evidence that the claimant was aware of this at the time, but even if this could be regarded as sufficient to constitute an assertion of a permissive right, it came after 20 years of continuous use since 1980 such as to create a prescriptive right by lost modern grant. And of course there was nothing in the conduct of the owner of the KCH, as regards the manner in which it used the TRR, which showed that it believed that it was doing so only by reason of the 1973 Licence. On the contrary, the use of the TRR by KCH coaches and small vans would have shown, if anyone had troubled to consider the matter, that the use was not confined to the terms of the 1973 Licence. That is something to which I shall return.

In Jones v Price and Morgan (1992) 64 P & CR, the trial judge found that use of a track across a neighbouring farm for the driving of sheep was originally by oral permission, and that although the permission was not expressly renewed “there was a tacit understanding that did not need to be expressed overtly between neighbours, then on good terms” that when the one farm made arrangements to bring sheep along the track “it was on the assumption on both sides that the permission to do so was still in force.” The judge also found that other farmers, who could not by reason of the location of their land prescribe for an easement, similarly used the track. In the light of those findings, it is unsurprising that the Court of Appeal upheld the judge’s conclusion that the use was permissive so as to preclude a prescriptive easement being acquired. As Parker LJ stated (at 407):

“Oral permission given within the period will of course negative user as of right or any claim to user as of right, but so also, in my view, will a user which continues on a common understanding that the user is and continues to be permissive. If both parties have such a common understanding it cannot be, in my judgment, that there is an assertion to a claim as of right, nor could any such user bring home to the mind of the alleged servient owner that a claim of right was being asserted. This common understanding has been found by the judge, and there was ample evidence on which he could so find.”

That decision accordingly rested on the particular finding of fact. Oral permission of that nature, especially as between neighbouring farmers, is not something that one necessarily expects would regularly be renewed for it still to apply. In that case, it was found that the original permission did continue to apply, a finding buttressed by the fact that other farmers also used the track on a permissive basis. The situation is very different here where it is clear, and indeed alleged by the claimant, that the original permission in the form of the 1973 Licence did not continue to apply. Moreover, a carefully drafted written agreement in circumscribed terms between two large companies is about as different a situation from an oral agreement between two Welsh sheep farmers as it is possible to imagine. I should also emphasise that the Court of Appeal in Jones v Price and Morgan did not hold that mere toleration by the one farmer of use of the track by the other farmer established the common understanding: such a holding would have been inconsistent with Mills v Silver, decided less than two years previously by two of the same judges, and which was subsequently approved by the House of Lords in Beresford.

Here, the claimant also argued that there was a “common understanding” whereby the owners and operators of the two hotels were independently under the impression that use of the TRR was by virtue of the 1973 Licence. However, whatever may have been the understanding among the management of the Tara Hotel, there was no evidence to support any such understanding on the part of the owners and operators of the KCH after the departure of Mr Lemon as general manager of the KCH in 1979, and before the acquisition of the KCH by the defendant in 2002. Mr Lemon thought there was a mutual agreement entitling the KCH to use the TRR, but even he was not aware of its terms. His successors, Mr Voegl (1979-1980), Mr Murphy (1980-1982) and Mr Walsh (1996-1999), all said that they were wholly unaware of any agreement and would have been very surprised to be told that the Tara Hotel could prevent the KCH continuing to use the TRR. Accordingly, even if such a common understanding would be relevant to the issue of precario or open user “as of right” in the sense explained in Redcar, I find that it is not made out as regards the period of 20 years from 1980. It is therefore unnecessary to consider separately the position after 2002, when the defendant registered the 1973 Licence and there was the alleged, but disputed, conversation between Mr Cola and Mr Philip.

In the direct meaning of the term, the use by the KCH was self-evidently not clam. It was open and frequent use, for all at the Tara Hotel to see. It is not in issue that the management of the Tara Hotel was well aware that the TRR was being used by service vehicles supplying the KCH and I find that it also had actual knowledge that the TRR was being used from at least 1980 by coaches serving the KCH. No objection to this use was taken until the events giving rise to this claim.

For the defendant, it was submitted that only the physical character of the user is relevant to this condition for the acquisition of a prescriptive right, and that this therefore disposes of the argument about clam. However, I do not accept that the concept of clam can never apply as regards the identity of the person exercising the right. For example, if ownership of the dominant land was transferred within a family, with no outward sign that this had occurred and no basis on which the owner of the servient land could have contemplated such a transfer, it may be that the continuing use of a right of way after such a transfer could properly be regarded as clam insofar as it was use by, or for the benefit of, the transferee. However, I need not reach a firm view on that point: the governing principle is that the enjoyment will not be clam if it is of “such a character that an ordinary owner of the land, diligent in the protection of his interests, would have, or must be taken to have, a reasonable opportunity of becoming aware of that enjoyment”: per Romer LJ in Union Lighterage Co v London Graving Dock Co [1902] 2 Ch 557, 570.

Not only was there nothing surreptitious in the fact that ownership of the KCH, and thus use of the TRR, passed away from KCL but I find that such a corporate transfer at some time within at the very least a 20 year period was something that should reasonably have been in the contemplation of the claimant and which, if it had been diligent in the protection of its interests, it would have checked. As Mr David Cook, the former finance director of Millenium & Copthorne group, who had some 40 years experience in the hotel industry, acknowledged, when hotels are owned by a group there are sometimes transfers from one company to another, and the actual operating company of a hotel may change over time. He accepted that these are things which would be readily appreciated and understood by anyone in the hotel industry. As I have already observed, all that the claimant had to do to establish the position was to make inquiry of the management of the KCH. Of course, if it had not been given a true answer or the KCH management had engaged in deception, very different considerations would arise: see per Lord Selborne LC in Dalton v Angus (1881) 6 App Cas 740 at 802. There was naturally no suggestion of that here.

The decision in Sunningwell established conclusively that the subjective belief of the user of the right is irrelevant. The focus is on how the matter would have appeared to the owner of the servient land. Here, the right of way was exercised over the TRR openly and continuously. The claimant had a copy of the 1973 Licence in its possession and therefore had every opportunity look at it and take appropriate legal advice. Had it done so, it would have realised that this was a personal licence; and thus that the use of the TRR could not be pursuant to the 1973 Licence if there had been a change in the corporate ownership of the KCH land. The fact that, whether through inadvertence or indifference, or for whatever reason, no one appears to have looked at the Licence or make such inquiry until much later cannot, in my judgment, change the way in which, on an objective view, the matter would have been regarded by a “reasonably alert owner” (to adopt Lord Walker’s expression in Redcar) “diligent in the protection of his interests”. Accordingly, the fact that the change(s) in the corporate ownership of the KCH may not have been obvious or on display does not, in my judgment, preclude the inference, on an objective view, of acquiescence on the part of the claimant such as to establish a prescriptive right.

For the claimant, it was submitted that although it might have been sensible for the claimant occasionally to check on the ownership of the KCH, the onus should be on each new owner of the KCH – and thus on the defendant – to come to the claimant and “denounce” the 1973 Licence and seek a fresh licence, so as to avoid being a trespasser. If the question were whether, say, Posthouse Hotels Ltd after 1996 was a trespasser, that may well be correct. But on the question of the acquisition of a prescriptive right, this submission underlines the fallacy in the claimant’s argument. Those acquiring a right of way by prescription will, ex hypothesi, not have a right to pass over the land before the end of the 20 year period and frequently will not believe, at least in the earlier part of the period, that they have such a right. If they were for that reason required to seek permission of the owner to use the way, that would preclude them from ever acquiring a prescriptive right. As Lord Walker observed in Beresford (at [72]), there is a paradox in this area of the law in that “a trespasser (so long as he acts peaceably and openly) is in a position to acquire rights by prescription, whereas a licensee, who enters land with the owner’s permission, is unlikely to acquire such rights.”

In view of the above conclusion, the alternative ground that was advanced for the acquisition of a prescriptive right, on the basis of the use of the TRR by coaches and small vans, does not require decision, but as the matter was fully argued I shall address it.

On my factual findings, there was frequent use by coaches and small vans from at least 1980. And on my construction of the 1973 Licence, the use by coaches was outside its terms. As regards the use by small vans, it is accepted that their use of the brown section of the TRR was not covered by the Licence. As counsel for the claimant acknowledged, such use as is found to have been made of the TRR by coaches and small vans was manifestly open use: there is no question of clam.

As regards the use by coaches, the claimant submitted that this was not use by the KCH: it was not on the instruction of the management of the KCH or authorised by them, but the independent decision of the drivers. Accordingly, it was argued that such use does not accommodate the dominant tenement in the manner required to establish a prescriptive right. In that regard, reliance was placed on Central Midlands Estates Ltd v Leicester Dyers Ltd [2003] All ER (D) 141, a decision of Mr Robert Englehart QC (sitting as a deputy High Court judge). There, the defendant contended that it had acquired rights by prescription to a strip of wasteland owned by the plaintiff, which had been used by the defendant’s employees working at its clothing factory for parking their cars. The claim failed on the facts, since the judge was not satisfied that there had been regular parking as alleged before the mid-1990s. But the judge added, as one of the further grounds for rejecting the prescriptive claim (at [30]):

“…, I am unable to accept that such parking as there was, whether by Leicester Dyers employees or delivery men when making deliveries, can properly be categorised as user as of right by Leicester Dyers itself. It must be remembered that, where an easement exists, it can only do so for the benefit of the dominant tenement. The personal convenience of individual employees or delivery men is not enough.”

However, in that case, on the particular facts the use of the wasteland by employees to park their cars, as opposed to parking somewhere else, did not benefit Leicester Dyers’ use of its land as a factory. By contrast, in the present case, the use of the TRR by coaches picking up or dropping off guests at the KCH was for the direct benefit of the KCH. As one of the coach drivers explained, they wanted to drop off, and pick up, the KCH guests in front of the hotel, and not on the other side of Scarsdale Place where the coach would be in the roadway out from the kerb, since the kerbside had a taxi rank, and the hotel guests, who may have luggage, would have to cross the road. Although there was the alternative of turning into Cheniston Gardens and reversing back up Scarsdale Place, one of the very experienced coach drivers who gave evidence considered this was “a dangerous manoeuvre” in a long coach; and another of the drivers explained that using the TRR was “the safest way” to bring the coach in front of the hotel for the convenience of the hotel guests. Accordingly, I consider that the use of the TRR by coaches serving the KCH was for the benefit of the guests of the KCH.

There is no requirement that the use of the right of way has to be by the occupier of the dominant land or his agents: it is sufficient that the use accommodates, or benefits, the dominant land, in the sense of being closely connected with the normal enjoyment of the dominant land: Gale on Easements (18^th edn, 2008), paras 1-23 to 1-29; see now also Polo Woods Foundation v Shelton-Agar [2009] EWHC 1361 (Ch) (a case concerning profits, but the test is the same). Here, having regard to the fact that the dominant land was throughout occupied by a hotel, I am satisfied that use of the TRR by coaches picking up and dropping off guests at the hotel accommodated the normal enjoyment of the KCH land.

As regard the use by vans, the claimant submitted that although such use was “in breach” of the restriction in the 1973 Licence, this breach was waived by the claimant and the use therefore remained permissive: as the claimant put it in its written closing submissions, it was “the result of neighbourly tolerance arising out of a wish to be helpful and cooperative”. It is somewhat paradoxical to speak of use in breach of the terms of a licence which, on the claimant’s primary case, no longer applied in any event. Moreover, it is clear that there was never an express waiver. Any such waiver would therefore have to be implied and Beresford clearly establishes that implied permission in this context requires some overt act. Here there was none, as regards use which I have found was not merely occasional but very frequent – indeed as regards the bakery deliveries it was at least once a day. As regards “neighbourly tolerance”, in Redcar Lord Walker approved the dicta of the Court of Appeal of Ontario in Henderson v Volk (1982) 35 OR (2d) 379 at 384, concerning private rights of way, that neighbourly acquiescence to the use of a pavement “during inclement weather or in times of emergency such as a last minute attempt to catch a bus, should not be too readily accepted as submission to the use”. However, that kind of situation is far removed from regular and frequent use of a driveway by commercial vehicles for the benefit of a major hotel.

At the end of the claimant’s oral closing, the alternative argument was advanced that if use by small vans could establish a prescriptive right of way on this basis, that right would extend only to the brown section of the TRR. Technically, I think that must be correct, although as there was not the slightest evidence that anyone in the claimant considered that there was any distinction between different parts of the TRR, this only demonstrates how artificial it would be to find that use by small vans of the remainder of the TRR was either precario or clam.

Accordingly, if I were wrong in finding that a right of way was acquired by the overall use of the TRR, I would hold that a right of way was acquired through its use by coaches and further, as regards the brown section, through use by small vans. In theory, the right could therefore be limited to this extent. However, such limitation of the easement would be very artificial and the claimant did not address any argument to the court in support of a limitation to use by coaches. I would only add that if I had determined that the right was limited in this way, on the question of remedy I would then have declined to grant an injunction restricting use of the TRR by other commercial vehicles serving the hotel. This would, in my judgment, constitute an exceptional circumstance within the principles set out in Shelfer v City of London Electric Lighting Co. [1895] 1 Ch 287 at 322-323, since once coaches could use the whole of the TRR and small vans could use part of it, the hardship caused to the defendant by prohibiting use of the whole of the TRR by commercial vehicles would far outweigh any additional hardship caused to the claimant by such further use. I should emphasise that I would reach that view because of the implications for the claimant and the defendant, and not on the basis of wider considerations concerning the effect on the public or planning matters that were advanced in argument.

In the light of my findings regarding the acquisition of a right of way by prescription, this aspect of the case is largely academic. However, in case I should be wrong on the prescriptive right, I shall express my views upon it.

The issue turns on the construction of the 1938 Conveyance. The question is whether the right of way over the blue triangle granted under that conveyance is limited to use by vehicles of a size reasonably capable of passing through the Eastern Archway as originally constructed.

The terms of the grant in the 1938 Conveyance are set out in paragraph 7 above. The claimant accepted that the physical extent of the blue triangle is defined by the conveyance and the conveyance plan; and that the conveyance plan is clear as to the physical extent of the blue triangle.

The grant is of “a right of way for all purposes” over the blue triangle as between what is now Scarsdale Place and “any building erected on the pieces of land” that are now the KCH (my emphasis). There is no dispute as to the correct approach to construction of the conveyance. As the Court of Appeal stated in St Edmunsbury v Clark (No 2) [1975] 1 WLR 468 at 476H:

“We feel no doubt that the proper approach is that upon which the court construes all documents; that is to say, one must construe the document according to the natural meaning of the words contained in the document as a whole, read in the light of the surrounding circumstances.”

In the St Edmunsbury case, the grant was simply of “a right of way”, and thus the surrounding circumstances were important to determine the scope of the grant. But as the Court there stated (at 477E):

“… one may have words so unambiguous that no surrounding circumstances could affect their construction.”

That was not the position in that case, but in my judgment it is the position here. To limit the right of way to vehicles of a size that could pass through the archway of a particular building then in the course of construction would be inconsistent with the clear words of the grant that refer to “any building”.

It is therefore unnecessary to consider the surrounding circumstances, but if one does so they only reinforce this interpretation. As at 18 November 1938 construction of the building that became the KCH was not yet completed. There was no evidence as to when in the course of construction of the whole building the Eastern Archway was built, but as it was erected on the red rectangular piece of land that was only conveyed by the railway company as vendors by the 1938 Conveyance, it is hard to imagine that this would have been before the execution of the conveyance.

Moreover, this interpretation accords with common sense. Were it otherwise, then if and when the owners of the KCH land replaced the original building with another, the delimitation of the vehicles that could pass over the blue triangle would have to be determined according to a historical assessment of the width of vehicle that could reasonably have passed through a no longer existing archway in a demolished building. The fact that such an investigation would involve the kind of elaborate expert evidence, with reference even to the effect of projecting wing mirrors, that the court heard in the present trial, demonstrates the utter implausibility of such an interpretation.

Accordingly, I find that the defendant has acquired by a lost modern grant, on the basis of 20 years use since about 1980, a right of way over the TRR. The Counterclaim seeks a declaration that the right is to an unrestricted pedestrian and vehicular right of way. The issue of pedestrians was not canvassed in argument at all and I suspect is of no practical significance since it is hard to see why pedestrians would wish to use the TRR save when a vehicle breaks down. However, as regards vehicles, the 1973 Licence had excluded use by private cars and private hire vehicles. There was no evidence that private cars, taxis or minicabs carrying guests of the KCH have ever used the TRR. It seems to me that such use could significantly increase the density of traffic on the TRR and thus increase the problems of congestion that have occasionally occurred. I therefore hold that the right of way acquired by prescription is for commercial vehicles and coaches only, excluding private cars, taxis and minicabs.

Secondly, I hold that the 1938 Conveyance on its true construction entitles the defendant to a pedestrian and vehicular right of way for all purposes over the blue triangle for the purpose of access to the KCH or any building that may be erected in its place on the KCH land.

Finally, I express my appreciation to all four counsel, Mr Jonathan Gaunt QC and Mr Kenneth Munro for the claimant, and Mr Nicholas Dowding QC and Mr Stephen Jourdan QC for the defendant, for the clarity and efficiency with which the oral and written arguments were presented. That was of great assistance to the court in a case that raised some difficult issues, and enabled the trial to be completed in less than its time estimate.