Clearer view emerges on the rights of light

ON 12 march 2008 the Court of Appeal handed down judgment in RHJ Ltd v (1) FT Patten (Holdings) Ltd (2) FT Patten Properties (Liverpool) Ltd [2008] EWCA Civ 151. This important and interesting judgment sheds light on the extent to which express reservations in leases need to refer specifically to light to prevent the acquisition of a right of light by enjoyment of light over a 20-year period pursuant to s3 of the Prescription Act 1832.

The building that the proceedings concerned is called Regian House which fronts onto Strand Street in Liverpool. On 26 February 1980 the freeholder, Liverpool City Council, granted a 99-year lease, to run from 1975, to Possfund Trustees Ltd (the 1980 lease). On the same date Possfund Trustees Ltd granted an underlease for the whole term, less 10 days. In May 2001 the claimant bought the freehold from the council at auction and has since acquired the interests under the lease and underlease.

The defendants owned neighbouring land which originally belonged to Liverpool Council but which it had sold to a predecessor in title of the defendants in 1989. The defendants were concerned to preserve the rights of light position, and light obstruction notices were registered against Regian House in 2006 but it seemed that by that stage the windows on the Strand Street side of Regian House had enjoyed light for more than 20 years. During that period, however, the 1980 lease was in existence and so the question that the court had to address was whether there was anything in the 1980 lease that amounted to an agreement or consent within the terms of s3 of the Prescription Act. If there was, the windows in question enjoyed light for part of the 20-year period by consent and therefore prescriptive rights of light could not arise under s3.

Paragraph (i) and also clause 2 of the 1980 lease were most relevant to the case. Paragraph (i) provided as follows: 'Except and reserving to the Lessor and its Lessees and others entitled to the like rights'¦ (i) the full and free right to erect build re-build and/or alter as they may think fit at any time and from time to time any buildings or bays or projections to buildings on any land adjoining the demised property and/or on the opposite sides of the adjoining streets and accessways'.

Clause 2 of the 1980 lease provided as follows: 'Provided always that nothing herein contained shall operate to grant by way of implication or otherwise any estate right or easement not hereby expressly granted or not hereafter expressly granted by the Lessor over or in respect of any land retained by or belonging to the Lessor whether now held on lease from the Lessor or not or over any land to be hereafter acquired by the Lessor'.

The case came on before Lewison J at first instance who concluded that the terms of the 1980 lease amounted to a consent or agreement within s3 of the 1832 Act and therefore prescriptive rights of light had not arisen. The appellant appealed to the Court of Appeal.

Section 3 of the 1832 Act provides as follows: 'When the access and use of light to and for any dwelling-house, workshop or other building shall have been actually enjoyed therewith for the full period of 20 years without interruption the right thereto shall be deemed absolute and indefeasible any local usage or accustomed to the contrary notwithstanding unless it shall appear that the same was enjoyed by some consent or agreement expressly made or given for that purpose by deed or writing'.

It is clear from this that prescriptive rights of light will not arise notwithstanding more than 20 years of enjoyment where there is a consent or agreement in writing by virtue of which the light was enjoyed, the agreement or consent being 'expressly made or given for that purpose'. The appellant's point, which was made in a number of interesting ways, was that neither paragraph (i) nor clause 2 of the 1980 lease made any express reference to light. There could not therefore be a provision 'expressly' made or given for the purpose of excluding rights of light.

The principal ways in which the appellant put its case were as follows:

1. Lewison J's decision was inconsistent with authority and in particular the decision of the Court of Appeal in Mitchell v Cantrill (1887) 37 ChD 36 which bound court to decide in the appellant's favour on the terms of the 1980 lease.

2. Section 3 of the 1832 Act requires an express reference to light in the particular reservation.

3. A lease should not be construed as cutting down rights in favour of a landlord which would otherwise be granted to or required by the tenant.

Mitchell v Cantrill

The court started by reminding itself that, although previous authority was plainly relevant, the question is always one of construction of each individual lease and to that extent the authorities relied upon by counsel were rather more applicable to the particular terms of each lease rather than setting down any general principle.

In Mitchell v Cantrill each lease contained an exception out of the demise of 'rights, if any, restricting the free use of any adjoining land or the conversion or appropriation at any time thereafter of such land for building or other purposes'. At first instance an application for an interlocutory injunction was dismissed by the judge who held that this amounted to an agreement or consent for the purposes of s3.

The Court of Appeal overturned that ruling and held that the effect of the drafting was to prevent there being any express grant of a right of light or by reference to the principle of non-delegation from grant. Counsel for the appellant submitted that Mitchell v Cantrill bound the court to find in the appellant's favour. The Court of Appeal disagreed. The clause in Mitchell v Cantrill was the equivalent of clause 2 in the 1980 lease, that is, it excluded the possibility of rights of light arising on the grant of the lease (for example, by implication) but did not deal with the position as to the future. Paragraph (i) of the 1980 lease sought to prevent rights arising in the future. As Mitchell v Cantrill did not deal with that kind of provision it was not binding on the court.

Must the provision refer expressly to light?

Counsel for the appellant submitted that the phrase in s3 of the 1832 Act 'expressly made or given for that purpose' amounted to a requirement that the consent or agreement must expressly refer to the enjoyment of light to any window. The Court of Appeal disagreed. In its view, that would produce the strange result that no matter how clearly a particular provision was intended to refer to enjoyment of light, it would fail to be effective to exclude prescriptive rights of light unless the word 'light' were used. This, thought the court, was contrary to the usual principle that a document is construed in accordance with the intentions of the parties.

The court took the view that parties to leases can make their intentions as to the exclusion of rights of light perfectly clear without actually using the word 'light'. That being the case, the actual use of the word was superfluous where the meaning is otherwise clear.

The correct interpretive approach to a relevant provision

It was contended on behalf of the appellant that where a provision of a lease is capable of being read as referring to something other than light, then it should be so read and hence should not satisfy s3 of the 1832 Act since to do so would wrongly cut down the bundle of rights that the tenant might acquire in future by reason of his occupation of the demised premises. The Court of Appeal had no difficulty in rejecting this inventive submission, holding that there is no rule of construction especially applicable to leases which requires a provision to be read one way or another rather than in accordance with the normal rule.

The true construction of the 1980 lease

Having dealt with all of the arguments advanced by counsel for the appellant, and having reminded itself as to the proper approach on construction, the Court of Appeal turned to construe provisions of paragraph (i). Counsel for the appellant had derived support from an earlier deed entered into in 1978 adjusting other not directly relevant rights (which was expressly referred to in the 1980 lease) which made it expressly clear that the prescriptive rights of light to the windows referred to in that deed were to be excluded. Counsel for the appellant submitted that if the parties had made themselves so clear in 1978 but not used the same drafting in 1980 then they should be taken to have intended something different. Otherwise why not use the same wording?

The Court of Appeal disagreed. The lease was granted for 99 years and at the time of the grant there were 94 years yet to run. The parties plainly appreciated that during that time the acquisition of the rights of light by prescription was (a) a possibility and (b) a significant impediment to the development of adjoining land. The court found that on its true construction paragraph (i) of the 1980 lease was intended to exclude rights of light, among other rights, notwithstanding that there was no express reference to light. The court considered it would be a perverse construction of paragraph (i) to hold that the parties had directed their minds to the exclusion of all other possible constraints upon future development by the landlord, but not light. This made paragraph (i) a consent or agreement pursuant to which light was enjoyed which prevented the accrual of rights of light under s3 of the 1832 Act.

This decision will come as some considerable relief to developers faced with potential rights of light issues. Although the case is essentially one that turns on the wording of the 1980 lease, it clarifies the law helpfully and re-emphasises that, so far as rights of light are concerned, construction can permit obstruction.