Midtown Ltd v City of London Real Property Company Ltd

JurisdictionEngland & Wales
JudgeTHE HONOURABLE MR JUSTICE PETER SMITH
Judgment Date20 January 2005
Neutral Citation[2005] EWHC 33 (Ch)
CourtChancery Division
Date20 January 2005
Docket NumberCase No: HC04C02537

[2005] EWHC 33 (Ch)

IN THE HIGH COURT OF JUSTICE

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before

The Honourable Mr Justice Peter Smith

Case No: HC04C02537

Case No: HC04C02549

Between
Midtown Limited
Claimant
and
City of London Real Property Company Limited
Defendant
(1) Colin Stuart Joseph
(2) David Richard Kendall
(3) Richard John Spiller
(4) Laurence Mark Harris
Claimant
and
City of London Real Property Company Limited
Defendant

Mr John McGhee QC and Mr Jonathan Karas (instructed by Wragge & Co LLP) for the Claimants

Mr Paul Morgan QC and Mr David Forsdick (instructed by Nabarro Nathanson) for the Defendant

Hearing dates: 15th to 20th December 2004

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

THE HONOURABLE MR JUSTICE PETER SMITH

Mr. Justice Peter Smith:

INTRODUCTION

1

The Claimant in case number HC0402537 ("Midtown") is the freehold owner of 43 Fetter Lane, London EC4 ("the Property"). The Property is let to Kendall Freeman, a firm of Solicitors. The lease of the Property is vested in the Claimants in case number HC04C02549, who are four of the partners in Kendall Freeman, who hold it upon trust for the partnership.

2

The Defendant is a member of the Land Securities Group of companies. Through its associated companies Cedric (New Fetter Lane) (No. 1) Ltd. and Cedric (New Fetter Lane) (No.2) Ltd., it has a long leasehold interest in a large site to the east of the Property on the other side of New Fetter Lane, known as the New Street Square Site ("the Site"). Subject to fulfilment of a number of conditions (including the conclusion of a section 106 agreement) the Local Planning Authority resolved to grant planning permission for a comprehensive development of the Site on 27 th April 2004. The Defendant has recently commenced a soft strip of the buildings on the site and proposes to commence full demolition in January 2005 and for the construction of new buildings on the Site to commence in June 2005.

3

Midtown and Kendall Freeman claim that they have a right to light acquired by prescription to windows on the south eastern side of the Property, which overlook the Site and this right to light would be interfered with to a substantial degree if the proposed development on the Site were allowed to proceed as planned. In particular they object to the erecting of one of the proposed buildings on the Site, which would be immediately adjacent to the Property on the east side of New Fetter Lane and is referred to variously as "Building A" or the "Triangle Building" (the shape of the footprint of the proposed building).

4

Midtown and Kendall Freeman seek injunctive relief to restrain the Defendant from erecting the Triangle Building or otherwise interfering with their right to light through the windows on the south eastern side of the Property. Alternatively, they seek damages in lieu of an injunction.

5

The Claim Forms were issued on 3 rd and 4 th August respectively. The Claimants applied for summary judgment, but on 13 th September 2004, by consent I made an order that the application be adjourned to a trial and directions were made, in effect, for a speedy trial on the question of liability and the Claimants' entitlement to injunctive relief. The question of the quantum of any damages to which the Claimants may be entitled if injunctive relief is refused was reserved to a separate enquiry after the trial.

THE CLAIMANTS RIGHT TO LIGHT

6

The Claimants claim that their right to light was acquired by prescription pursuant to section 3 of the Prescription Act 1832, which provides a right to light to a building is " absolute and indefeasible" if it " shall be naturally enjoyed therewith for a period of twenty years without obstruction". By section 4, the relevant period, is the period immediately before the commencement of the claim. Accordingly the Claimants need only show that light through the south eastern windows of the Property has been enjoyed since August 1984.

7

The Property was constructed in the late 1950's or early 1960's and does not appear to have materially altered since then. There is only evidence however, that the windows fronting New Fetter Lane have been there since 1982, when D J Freeman & Co. (now known as Kendall Freeman) took up occupation of the Property.

THE CLAIMANTS' TITLE TO THE PROPERTY

8

Midtown is registered as the proprietor of the freehold title of the Property under title number 410132.

9

Entry numbers 6 and 7 on the charges register show that the freehold is subject to leases dated 12 th January 1978 and 5 th March 1993 registered under title number NGL320354. The four Claimants in the Kendall Freeman claim are the registered proprietors of this title.

10

The 1978 lease was made between Navcot Shipping (Holdings) Ltd. and the Lummus Co. Ltd., and was for a term from 12 th January 1978 to 6 th August 2001. The 5 th March 1993 lease was a reversionary lease made between Exceptbreak Ltd. (1) and Messrs Solomon Joseph and Others (being the then partners in D J Freeman & Co.) in whom the remainder of the term of the 1978 was then vested. It was for a term commencing on the expiry of the 1978 lease on 6 th August 2001 itself expiring on 24 th March 2018. Since 1982, the 1978 lease and since 1993 the 1993 lease have been vested in four partners of D J Freeman and Co. and subsequently Kendall Freeman on trust for the Partnership.

11

In paragraph 8 of the Amended Defence in respect of the Kendall Freeman claim the Defendant contended that Kendall Freeman could not show twenty years enjoyment of light, since they could only rely on enjoyment pursuant to the current 1993 lease, the term of which commenced on 6 th August 2001. The point was not taken by the Defendant in the Midtown claim (for self evident reasons, in that Midtown derives title to succession of the freehold title).

12

The argument is based on the contention by the Defendant that an easement of light must be annexed to an estate. The estate in question can only be the 1993 lease and that commenced on 6 th August 2001. At the time of the expiration of the 1978 lease there is no evidence to show the requisite twenty years user. Further, the 1978 lease is an under lease. Kendall Freeman do not assert an express grant of a right of light by virtue of the under lease derived from the freehold or head leasehold interest. Nor do they assert the 1993 lease expressly granted any rights. If there were a right asserted to be granted by the 1978 lease, then it would be necessary to know whether the freeholder of 43 Fetter Lane has acquired a right to light by that time and it would also be necessary to know whether the freeholder granted the right to light to the head lessee when it granted the Head Lease. No deduction of the title was produced at the commencement of the trial.

13

Further, the Defendants submit that any rights granted under the 1978 lease would have then ended on the termination of the 1978 underlease on 6 th August 2001.

14

Kendall Freeman in their Reply, asserted that any rights that were in the process of being acquired under the Prescription Act by the time of the 1993 lease (but which had not by that time ripened into an absolute easement) would pass under section 62 of the Law of Property Act 1925. The objection by the Defendant to that is that there is no evidence showing Exceptbreak's known interest in the premises in 1993 and it is not know whether it was a freeholder or a head lessee and if a head lessee what was the date and terms of such head lease.

15

This argument undermines the Claimants' argument claiming to rely upon the combined user under the two successive leases. Mr McGhee QC points out in the skeleton argument for the Claimants, the enjoyment of a light or any other easement by a tenant is in law the enjoyment of the landlords ( Gayford v Moffatt [1868] 4 Ch. App 133 at 135). Further the enjoyment of the right by succession of tenants is sufficient; see Pugh v Savage [1970] 2 QB 373 at 380 G-H. This is also the case where a tenant's interest is assigned from time to time and even where it is surrendered and a new lease is granted:- Fear v Morgan [1906] 2 Ch 406 and Morgan v Fear [1907] AC 415 at 429. All of that of course ensures that Midtown as freeholder takes the benefit of the restrictive rights being acquired by the tenant interests derived from the freehold estate from time to time. It does not address Mr Morgan QC's point that Kendall Freeman need to establish how they acquired the interest. They cannot rely on the 1978 lease, because it has expired and at the time of the 1993 lease the freeholders were not in a position to grant any rights, because the rights on the evidence had not by then accrued. Whilst it is true that the benefit of the tenants actions accrue for the benefit of the landlord, the converse does not necessarily appear to me to be the same. It is slightly artificial, but nevertheless, for the tenant to establish the right it must establish either prescription in its own right by its user for the requisite period or alternatively, acquisition of rights by prescription acquired by the landlord and by virtue of some grant by the landlord, unless rights in the process of being acquired can be passed under section 62 LPA 1925 (see below).

16

Mr McGhee QC therefore submitted that rights that were in the course of being acquired under the Prescription Act 1832 were quite capable of passing under section 62 and that thus any rights that were in the process of being acquired by the freeholders passed by implication under section 62 on the occasion of the 1993 lease. He pointed to the ease with which rights to light are now...

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