THE ADJUDICATOR TO HER MAJESTY’S LAND REGISTRY

Case Number:	REF/2005/1267

Title Number:	CL109582
		CL90604

Property:	Land and buildings at Hillhead, St Mawes TR2 5AL and South Dolphins Reach, Hillhead aforesaid

Applicants:	Christopher James Nevill and Annabel Lois Nevill

Respondents:	Harry Maitland Ledger Jean Nancy Ledger James Adam Ledger and Nancy Patricia Ledger

Heard at: 			Court 7 Procession House EC4 on 18th September 2006

Before: 			Mr Rhys sitting as Deputy Adjudicator

Applicant Representation:	Mr Gabriel Fadipe instructed by Tallents

Respondent Representation:	Mr Stephen Boyd instructed by Alfred Ledger & Sons

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D E C I S I O N
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Keywords:	Easement to park vehicles – Lease or Licence – Meaning of “Lease”- Forfeiture – Law of Property Act 1925 Sections 1(2), 1(4) and 146

Cases referred to in the decision:	Copeland v Greenhalf [1952] Ch 588 
Street v Mountford [1985] AC 809
					Dresden Estates v Collinson( 1987) 55 P & CR 47
					 Batchelor v Marlow (2001) 82 P & CR 459

1.	The first question that I have been asked to decide is whether the document dated 30th July 1993 and made between Mr Hancock (1) and Mr and Mrs Martin and Linda Jane McKeown (2) constitutes a Lease.   If it does, it is accepted that the Lease has not been validly forfeited since no Section 146 notice has been served.  In that event, and for the purposes of this reference, there is no ground for removing the entry against the Respondents’ Land Registry title relating to the document.

The document in question was executed as Deed, and the First Schedule purports to grant the following rights: 
“ALL THAT the right (in common with the Landlord) for the Tenant and his tenants and licensees to park one vehicle on the land situate at Hillhead St.Mawes …which land is for the purpose of identification only delineated on the plan annexed hereto and thereon shown edged red (“the land”)”
The rights are granted for a period of 999 years at a peppercorn rent.

2.	It is clear from paragraph (5) of the Second Schedule that the parking rights are ancillary to the use of the identified property known as South Dolphin’s Reach (defined as “the Property”).   By clause 5 of the Deed, the Landlord is entitled to serve a break clause at any time after the survivor of Mr and Mrs Martin ceases to reside at the Property, but only if he has made available to the Tenant a suitable alternative parking area and at his own expense executed a conveyance of that land to the Tenant.

3	Clause 4 of the Deed contains a proviso in the following terms: 
“Provided always that if any of the covenants on the part of the tenant herein contained shall not be observed and performed then and in any such case it shall be lawful for the Landlord at any time thereafter to serve written notice on the Tenant and thereupon the term hereby created shall absolutely determine…”

4.	The Second Schedule contains covenants by the Tenant, including a prohibition on underletting, a covenant not to assign the Lease other than to purchasers of the Property, and a covenant against obstructing the Landlord’s garage.

5.	In deciding whether a document amounts to a licence or a lease I have in mind the approach summarised at Woodfall 1-022 and the guidance given in Street v Mountford [1985] AC 809.  Generally, one must attempt to analyse the substance of the grant, as opposed to regarding the terminology as definitive.  The relevant distinction between a licence and a lease is that the former creates merely a personal right, whereas the latter creates an interest in land.  An interest in land is capable of enduring through a change of ownership, whereas a licence dies with the parties and terminates on a change of ownership.

6.	It will be clear from the above extracts from the Deed that it does not purport to be a grant of physical land or premises.  It is the grant of a right for the Tenant to park a car on the Landlord’s land.  It is accepted by the Respondents that, in principle, such a right may amount to an easement and indeed Mr Boyd, for the Respondents, accepts that the right granted in this case amounts to an easement.  The grant does not purport to oust the Landlord or servient owner from the servient land, nor does it do so in practice.  It does not therefore fall foul of the rule stated in cases such as Copeland v Greenhalf [1952] Ch 588 (or, in the parking context) Batchelor v Marlow (2001) 82 P & CR 459, to the effect that a grant which deprives the servient owner of all practical use of his land exceeds an easement and probably amount to possession by the dominant owner.

7.	It is common ground, therefore, that the Deed purports to grant an easement.  However, Mr Boyd submits that the Deed is not a lease of the easement, but a licence or some other hybrid.  He relies, first, on clause 5 of the Deed, which I have already recited above.  Mr Boyd says that this right for the Landlord to provide an alternative parking space is quite inconsistent with the grant of a Lease, as opposed to a licence, and cites the case of Dresden Estates v Collinson( 1987) 55 P & CR 47.  I cannot agree.  Clause 5 simply allows the Landlord to break the lease if certain conditions are met.  Most modern leases contain break clauses.  The provisions of the Licence agreement in the Dresden Estates case are entirely different.  Furthermore, it is clear from the judgment of Glidewell LJ at page 53 that he would not have regarded this type of break clause arrangement as inconsistent with a lease. It was the Licensor’s ability to re-designate the area of land occupied by the Licensee without terminating the agreement that he regarded as inconsistent with a lease.

8.	Secondly, Mr Boyd relies on the various provisions of the Second Schedule that make it clear that the right granted to the Tenant is not exclusive, but is to be enjoyed in common with the Landlord.  He submits that this necessarily prevents the Tenant from obtaining exclusive possession of the servient land.  Since, he argues, exclusive possession is a fundamental ingredient of a lease of land – unlike a licence – it follows that the Deed cannot amount to a lease.  

9.	It seems to me that this approach is based on a fundamental misapprehension.  In considering whether an agreement whereby one person is allowed to occupy another’s land is merely personal – ie a licence – or creates an interest in land – ie a lease – questions of exclusive possession are paramount.  However, such considerations are by definition irrelevant in construing the grant of an easement.  An easement necessarily falls short of a grant of exclusive possession.  The real question in this case does not depend on whether exclusive possession is granted, but whether the Deed does more than grant a merely personal right to the tenants to park their car on the servient land.  In my view, it is manifest that the Deed both purports to and does grant a legal easement to park, amounting to an interest in land.  The document grants rights enuring for 999 years, by Deed.  It prohibits sub-letting and gives the Tenant only a qualified right to assign.  It contains a proviso for re-entry and a break clause exercisable only if the Landlord conveys in fee simple an alternative parking space.  It seems to me virtually unarguable that the Deed was intended to create only a personal right to park, amounting to something other than an interest in land.   The terminology of the Deed – drafted by solicitors – is entirely inconsistent with that of a licence, but that is not of course a conclusive factor by any means.

10.	Accordingly, the Deed is a grant of a legal estate in land – this is the effect of section 1(2) and (4) of the Law of Property Act 1925 (“the LPA”).  However, Mr Boyd argues that it is not a lease.  Although it is expressly enacted by section 1(2) of the LPA that “an easement …. for an interest equivalent to … a term of years absolute” is a legal estate, he argued that it was not possible to grant a lease of an easement because of the absence of exclusive possession.  Indeed, he was unable to give me any example of an easement which could, on his argument, be the subject-matter of a lease.  With respect to Mr Boyd, I am unable to follow this argument for any distance.  It seems to me that section 1(2) makes it clear beyond peradventure that an easement may be granted for an interest equivalent to a term of years absolute.  If that sub-section is to mean anything, it must mean that leases of easements are permitted, indeed required, as one of only two methods of creating a legal easement – the other being an outright grant.  It may be that the word “equivalent” is used in the sub-section since the phrases “fee simple absolute in possession” or “a term of years absolute” relate primarily to physical or corporeal land granted by an instrument.  An easement is of course akin to an incorporeal hereditament, albeit that it falls within the definition of “land” under section 205 of the LPA.  I may add that this view – that easements may be granted by lease – is shared by the editors of Woodfall – see 1-047.

11.	Accordingly, in my judgment there is nothing in the substance of the Deed that detracts from its formal appearance, namely that of a 999-year lease of an interest in land, being an easement to park on the servient land.  The use of a Deed, and the grant of a term, means that the easement is a legal easement.  It follows that the Deed does not create a licence or any hybrid or lesser interest than a full legal easement.

12.	The next question to be decided is whether section 146 of the LPA applies to the Deed.  If it does, it is common ground that a section 146 notice has not been served, and accordingly any alleged forfeiture of the term is ineffective.  Mr Boyd rather half-heartedly submitted that the proviso in clause 4 of the Deed was not “a right of re-entry or forfeiture under any proviso or stipulation in a lease for a breach of any covenant or condition..”, but it seems to me that this is precisely what it is.   In my judgment, therefore, section 146 does apply, subject to the issue mentioned below. 

13.	As I had understood Mr Boyd’s skeleton argument, he had accepted that (if I found that the Deed was a Lease) section 146 applied.  In his reply, however, Mr Boyd began to develop what seems to me to be a slightly different point.  If I follow it correctly, the argument runs like this.  Although the Deed grants an easement for a term of years, it does not create a legal estate.  Section 1(2)(a) of the LPA refers to an easement for an interest “equivalent” to a term of years absolute.  The Deed, therefore, is only equivalent to a term of years absolute. As such, it is not a lease within the meaning of section 146 of the LPA, and there is no need to serve a section 146 notice. Since this is a letting of an easement only, it is said, section 146 does not apply.  No authority was cited by Mr Boyd in relation to or in support of this submission.

14.	In my judgment, it seems to me that on first principles this submission is wrong.  Section 146 applies to leases.  That word is not defined in the LPA, although the term is referred to in section 146(5).  What is a lease?   I regard a document executed in the form of a deed, whereby a legal estate in land is granted for a period of 999 years, at a rent, as a lease.  Once it is accepted that an easement can be the subject matter of a grant for less than a fee simple absolute, it seems obvious to me that the Deed is a Lease.  Furthermore, there appears to me to be no good reason why the word “lease” in section 146 should be construed in a restrictive way.  The mischief of the section is to protect tenants against the automatic loss of their property rights.  It matters not, in my view, whether the right consists of a defined area of land, or a house, or flat, or a right of way or other easement.  

15.	In my judgment, therefore, I conclude that section 146 does apply to the Deed, and, since its formalities have not been followed, the forfeiture is of no effect. I do not therefore have to consider the specific breaches alleged.  I shall direct the Chief Land Registrar to cancel the  Respondents’ application.

Dated Monday 18th September 2006

By Order of The Adjudicator to HM Land Registry