Duchess of Bedford House RTM Company Ltd and Others v Campden Hill Gate Ltd

Hearing date: 22 November 2023

Approved Judgment

This judgment was handed down remotely at 10.30am on 8 December 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

This appeal is concerned with the proper interpretation of a reservation of rights clause in a head lease. The underlying dispute is about car parking.

The Appellants are the owners of long leases of flats at a property known as Duchess of Bedford House in Holland Park. Duchess of Bedford House is a 1930s mansion block which faces onto a private road known as Sheldrake Place East. Sheldrake Place East is part of a garden square known as Sheldrake Place. In the middle of Sheldrake Place are two other mansion blocks known as Campden Hill Gate. The Respondent, Campden Hill Gate Limited (“Campden Hill”), is the head lessee of Campden Hill Gate as well as other parts of Sheldrake Place, including the roads and central gardens.

The Appellants, Duchess of Bedford House RTM Company Limited and four individuals, Fouad Ibrahim, Nikos Kaloyeropoulos, Khosrow Moaveni and Daniela Toledo Hernandez, whom I shall refer to together as the “Appellants”, sought a declaration as to their parking rights in Sheldrake Place. HHJ Gerald found in their favour in relation to parking on Sheldrake Place East. Where necessary, I shall refer to HHJ Gerald's judgment as “the first judgment”.

Campden Hill appealed. Adam Johnson J allowed the appeal. Amongst other things, he made a declaration that the Appellants (Respondents before him), as flat owners in Duchess of Bedford House, have no right to park on any part of Sheldrake Place. The citation for his careful judgment is [2022] EWHC 2489 (Ch). Where necessary, I shall refer to the Judge's judgment, as “the judgment”.

Relevant Background

The background to this matter is set out at [8]–[17] of the judgment. The essential details are as follows. At all material times, the freehold title to Duchess of Bedford House, Campden Hill Gate and Sheldrake Place has been held by the trustees of the Phillimore Kensington Estate (the “Phillimore Estate”). The Phillimore Estate had granted a long lease of Duchess of Bedford House in 1938 having executed an agreement for a lease in 1929. By 1969, most if not all of the individual flats in Duchess of Bedford House were let out under short, three-year, Rent Act protected tenancies.

In August 1969, the whole of Campden Hill Gate and the roads, garage block and central gardens of Sheldrake Place were demised by the Phillimore Estate to Campden Hill's predecessor in title, Keston Securities Limited, under a long headlease (with a term of 95 ¹/₂ years) dated 11 August 1969 (“the 1969 Headlease”).

Under the 1969 Headlease certain rights were reserved to the Phillimore Estate, as lessor. The precise form of the reservation is central to the appeal and to the way in which this matter was put both before HHJ Gerald and before the Judge. I will set it out in full below.

In October 1973, an application was made for planning permission by the then owner of the 1969 Headlease, Courtfield Securities Limited, to carry out alterations to Sheldrake Place which involved the installation of lockable diagonal parking bays down the western side of Sheldrake Place East (on the side of the road opposite Duchess of Bedford House). The purpose was said to be to control the haphazard parking of cars and a haphazard parking situation. The application was opposed and was refused in March 1974. A subsequent appeal was dismissed. The nature of what was proposed is said to be relevant when applying an iterative approach to the provisions which both HHJ Gerald and the Judge were required to construe.

Also in March 1974, the leasehold structure in relation to Duchess of Bedford House changed. The 1938 leases were surrendered, and the Phillimore Estate entered into a new long lease of Duchess of Bedford House dated 15 March 1974 with London Midland Associated Properties Limited as the headlessee (the “1974 Headlease””).

Over time, the short, Rent Act protected tenancies which had been granted in relation to the flats at Duchess of Bedford House were replaced by long underleases, entered into between about 1974 and 1979. The Appellants are lessees under such long underleases. It was common ground before the Judge that if, in fact, the right to park was passed down to the headlessee of Duchess of Bedford House by means of the 1974 Headlease, then it was further passed down to the individual flat owners on the grant of the long underleases to them over time.

The Clauses in question and section 62

Before turning to the judgment, the grounds of appeal and the Respondent's Notice, it is helpful to have both section 62 Law of Property Act 1925 and the terms of the relevant clauses in the 1969 and 1974 Headleases in mind. First, section 62(2) provides as follows:

“A conveyance of land, having houses or other buildings thereon, shall be deemed to include and shall by virtue of this Act operate to convey, with the land, houses, or other buildings, all outhouses, erections, fixtures, cellars, areas, courts, courtyards, cisterns, sewers, gutters, drains, ways, passages, lights, watercourses, liberties, privileges, easements, rights, and advantages whatsoever, appertaining or reputed to appertain to the land, houses, or other buildings conveyed, or any of them, or any part thereof, or, at the time of conveyance, demised, occupied, or enjoyed with, or reputed or known as part or parcel of or appurtenant to, the land, houses, or other buildings conveyed, or any of them, or any part thereof.”

Section 62(4) provides that:

“This section applies only if and as far as a contrary intention is not expressed in the conveyance, and has effect subject to the terms of the conveyance and to the provisions therein contained.”

It is accepted that clear words are necessary in order to express such a contrary intention.: Wood v Waddington [2015] EWCA Civ 538, 2 P&CR 11 and Gale on Easements 21 ^st ed. para 3–50.

As I have already mentioned, the 1969 Headlease contained a reservation by which the Phillimore Estate reserved to itself, amongst other things:

“(i) the free running of water and soil gas and electricity coming from any other buildings or land upon or forming part of the Phillimore Kensington Estate aforesaid in and through the sewers and drains pipes and cables or connections with sewers and drains pipes and cables made or to be made upon or under the demised premises or any adjoining roadway … (ii) full rights of way for the Lessors in common with all persons entitled to the same whether granted or acquired by prescription at all times and for all purposes over Sheldrake Place aforesaid, shown coloured brown on the said plan (iii) all other easements quasi-easements and rights belonging to or enjoyed by any adjoining or neighbouring premises.”

It is the reservation at (iii) which is of particular significance. It is said that the settled practice of parking, to which I shall refer below, was an easement, a quasi-easement, or a right belonging to or enjoyed by Duchess of Bedford House (being an adjoining or neighbouring premises), its residents and their visitors and, therefore, was reserved to the freeholder, Phillimore Estate by the 1969 Headlease. As the Judge pointed out at [78] of the judgment, the parties were agreed that, if a right to park had been reserved under the 1969 Headlease, although it would otherwise have passed to London Midland Associated Properties upon the grant of the 1974 Headlease, whether automatically under the general law or by operation of section 62(2) LPA 1925, that would not be the case if it had been expressly excluded under the terms of the 1974 Headlease. It was necessary, therefore, to determine the proper interpretation of the exclusion or “carve-out” in the 1974 Headlease.

Before turning to the language of the “carve-out”, it is important to note that the following was expressly included within the demise with which the 1974 Headlease was concerned, namely:

“ ALL THAT piece and parcel of ground forming part of the Phillimore Kensington Estate situate in the Duchess of Bedford's Walk in the Royal Borough of Kensington and Chelsea TOGETHER with the brick built buildings comprising flats and garages erected thereon or upon some part thereof and known as Duchess of Bedford House … TOGETHER with a right to pass and repass with or without vehicles (in common with the Lessors and all persons for the time being authorised by the Lessors or having similar rights) over that part of the roadway commonly and hereinafter called Sheldrake Place on to which the demised premises abut … .”

In addition to the demise of the parcel of land and the buildings referred to, therefore, there was an express grant of a right of way over Sheldrake Place. It was this right of way which formed a significant part of HHJ Gerald's reasoning. The demise was followed by a number of reservations, including the following:

“ EXCEPT AND ALWAYS RESERVED unto the Lessors (i) the free running of water soil gas and electricity coming from any other buildings or land upon or forming part of the Phillimore Kensington...