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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Gorst & Anor v Knight  EWHC 613 (Ch) (28 March 2018)
Cite as:  EWHC 613 (Ch)
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On appeal from Master Price
Rolls Building, Fetter Lane,
London, EC4A 1NL
B e f o r e :
(sitting as a Judge of the High Court)
| Brenda Anna Gorst
|- and -
|Anabel Mary Louise Knight
Alan Steinfeld QC and Owen Curry (instructed by Seddons Solicitors) for the Respondent
Hearing dates: 22 February 2018
Crown Copyright ©
HHJ Paul Matthews :
"1. In consideration of the sum of £17,500 … paid to the Landlord on or before the execution hereof … and the rents and covenants hereinafter reserved and contained and on the part of the Tenant to be paid and observed and performed the Landlord HEREBY DEMISES unto the Tenant with full title guarantee ALL THAT the property devised by the Existing Lease ("the Premises") TOGETHER WITH the rights set out in the Existing Lease in common with the Landlord and all those authorised by the Landlord AND EXCEPT AND RESERVING in favour of the Landlord and all persons authorised by the Landlord the rights and easements set out in the Existing Lease and the right to apply to the Court for an order entitling the Landlord to resume possession of the Property pursuant to section 61 of the Act as provided in clause 6(c) of this Lease TO HOLD the Property to the Tenant for the term of 189 years from the 24th June 1992 YIELDING AND PAYING the following rents:
FIRSTLY from the date hereof the yearly son of one peppercorn (if demanded) and SECONDLY the other or further or additional rents including service charge and other sums reserved by the Existing Lease as though repeated in this lease mutatis mutandis.
2. Except as to the term of years granted the rent reserved and the express provisions of this Lease this demise is made subject to and on the same covenants on the parts of the Landlord and the Tenant and to the same provisos agreements stipulations and conditions as contained in the Existing Lease as though they had been repeated in this Lease mutatis mutandis save as amended by this Lease and as if the names of the parties to this Lease had been respectively substituted for those in the Existing Lease
3. The Existing Lease shall merge and be extinguished in this Lease".
1.1 In consideration of the rent and covenants on the part of the Tenant hereinafter contained THE LANDLORD HEREBY DEMISES unto the Tenant ALL THAT Maisonette shown edged red on the plan annexed hereto and known as Flat 1, 88 Tunis Road in the London Borough of Hammersmith & Fulham ("the Maisonette") being on the ground floor of the building edged blue on the plan ("the Building") including the external walls coextensive with the Maisonette and including one half part in depth of the joists between the ground and the first floors of the Building and one half width of the walls dividing the Building from the adjacent property and repairable as party walls from the same level as aforesaid and generally including all parts of the building in the case of an upper maisonette above and in the case of a lower maisonette below the line dividing equally the joists between the ground and first floors (all which premises hereinbefore described hereinafter called "the Demised Premises")
1.1.1 TOGETHER with
(a) the full right and liberty (in common with the Landlord and all others who have or may hereafter have the like right) to the free right of passage and running of water soil gas electricity telephone and other services from and to the Demised Premises through all sewers drains water courses water pipes systems gutters gas pipes electric wires cables and other conduits which now are or may hereafter be laid through in or under the neighbouring or adjoining property of the landlord including the Upper Maisonette known as Flat 2, 88 Tunis Road aforesaid ("the Other Maisonette")
(b) the right for the Tenant and the Tenant's agents and workmen at all reasonable times in the day time to enter upon the Other Maisonette for the purposes of cleansing and/or executing any repairs and alterations or other work to or in connection with the Demised Premises or any part thereof as and when the same shall be necessary (the Tenant making good forthwith all damage thereby occasioned)
[ ... ]
(e) the right to collect on demand from either the Tenant of the Other Maisonette (if a lease containing covenants substantially in the same form as the terms hereof shall have been granted) or the Landlord (if no such lease has been granted) a contribution of one half of the cost to the Tenant of repairing renewing maintaining and decorating the structure and exterior (including appurtenances such as gutters and rainwater pipes) only of the Maisonette
[ … ]
1.1.2 EXCEPTED AND RESERVED unto the Landlord
(a) the free passage of water soil gas electricity telephone and other services from and to the Other Maisonette and from and to any buildings adjoining or near to the Demised Premises through the sewers drains water courses water pipes systems gutters gas pipes electric wires cables and conduits which are now or may hereafter during the Term be in or under the Demised Premises
[ ... ]
(c) the right for the Landlord and the tenants and occupiers of the adjoining premises including the Other Maisonette or any person or persons authorised by them respectively upon prior written notice (save in cases of emergency) to enter upon the Demised Premises or any part thereof at all reasonable times for the purpose of cleansing and/or executing any repairs and alterations or other work to or in connection with such adjoining premises as and when the same shall be necessary the party so executing such works making good forthwith to the Tenant all damage thereby occasioned
[ … ]
2.0 Tenants covenants
The Tenant hereby covenants with the Landlord as follows: –
[ ... ]
2.4 Contribution to joint expenses
2.4.1 At all times during the Term to pay and contribute a rateable or due proportion of the expense of repairing and maintaining supporting and rebuilding all ways passageways pathways staircases sewers drains pipes water courses water pipes systems walls and structures party walls party structures fences and appurtenances (including gutters and rainwater pipes) serving the Demised Premises or used or capable of being used by the Tenant in common with the Landlord or the tenants or occupiers of the premises near to or adjoining the Demised Premises or of which the Demised Premises form part…
[ … ]
2.5.1 Well and substantially to repair and keep in repair the interior and exterior of the Demised Premises and every part thereof and all other buildings and erections which at any time during the Term may be upon any part of the Demised Premises
2.5.2 Jointly with the Tenant of the Other Maisonette to maintain and keep in good and substantial repair and condition the communal access shown coloured brown on the plan
2.5.3 PROVIDED ALWAYS the Landlord may if it is considered necessary so to do (but without being obliged so to do) in its absolute discretion elect to carry out any works to the common parts and to the joint passageway coloured brown on the plan and to the cellar and the foundations being part of the Demised Premises and to the roof being part of the Other Maisonette such works not to prevent access unless the works cannot otherwise be carried out and to keep any disturbance to a minimum…
[ … ]
2.11.1 Not without the consent in writing of the Landlord first obtained to make any alteration in the plan or elevation of the Demised Premises or in any of the party walls or the principal or bearing walls or timbers thereof or erect or place any additional building or erection on any part of the Demised Premises
[ … ]
4.0 Agreements and declarations
It is hereby agreed and declared that: –
[ ... ]
4.5.4 In clause 1 hereof the expression "the maisonette" shall (in the case of an upper maisonette) include reference to the roof and (in the case of a lower maisonette) include reference to the foundations and the void or cellar below the ground floor."
Construction of the lease
"9. It is not appropriate in this case to reformulate the guidance given in the Rainy Sky and Arnold cases; the legal profession has sufficient judicial statements of this nature. But it may assist if I explain briefly why I do not accept the proposition that the Arnold case involved a recalibration of the approach summarised in the Rainy Sky case.
10. The court's task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement. It has long been accepted that this is not a literalist exercise focused solely on a parsing of the wording of the particular clause but that the court must consider the contract as a whole and, depending on the nature, formality and quality of drafting of the contract, give more or less weight to elements of the wider context in reaching its view as to that objective meaning. In Prenn v Simmonds  1 WLR 1381, 1383H–1385D and in Reardon Smith Line Ltd v Yngvar Hansen-Tangen  1 WLR 989, 997, Lord Wilberforce affirmed the potential relevance to the task of interpreting the parties' contract of the factual background known to the parties at or before the date of the contract, excluding evidence of the prior negotiations. When in his celebrated judgment in Investors Compensation Scheme Ltd v West Bromwich Building Society  1 WLR 896, 912–913, Lord Hoffmann reformulated the principles of contractual interpretation, some saw his second principle, which allowed consideration of the whole relevant factual background available to the parties at the time of the contract, as signalling a break with the past. But Lord Bingham of Cornhill in an extra-judicial writing, "A New Thing Under the Sun? The Interpretation of Contracts and the ICS decision" (2008) 12 Edin LR 374, persuasively demonstrated that the idea of the court putting itself in the shoes of the contracting parties had a long pedigree.
11. Lord Clarke of Stone-cum-Ebony JSC elegantly summarised the approach to construction in the Rainy Sky case  1 WLR 2900, para 21f. In the Arnold case  AC 1619 all of the judgments confirmed the approach in the Rainy Sky case: Lord Neuberger of Abbotsbury PSC, paras 13–14; Lord Hodge JSC, para 76 and Lord Carnwath JSC, para 108. Interpretation is, as Lord Clarke JSC stated in the Rainy Sky case (para 21), a unitary exercise; where there are rival meanings, the court can give weight to the implications of rival constructions by reaching a view as to which construction is more consistent with business common sense. But, in striking a balance between the indications given by the language and the implications of the competing constructions the court must consider the quality of drafting of the clause (the Rainy Sky case, para 26, citing Mance LJ in Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd (No 2)  2 All ER (Comm) 299, paras 13, 16); and it must also be alive to the possibility that one side may have agreed to something which with hindsight did not serve his interest: the Arnold case, paras 20, 77. Similarly, the court must not lose sight of the possibility that a provision may be a negotiated compromise or that the negotiators were not able to agree more precise terms.
12. This unitary exercise involves an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated: the Arnold case, para 77, citing In re Sigma Finance Corpn  1 All ER 571, para 12, per Lord Mance JSC. To my mind once one has read the language in dispute and the relevant parts of the contract that provide its context, it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each.
13. Textualism and contextualism are not conflicting paradigms in a battle for exclusive occupation of the field of contractual interpretation. Rather, the lawyer and the judge, when interpreting any contract, can use them as tools to ascertain the objective meaning of the language which the parties have chosen to express their agreement. The extent to which each tool will assist the court in its task will vary according to the circumstances of the particular agreement or agreements. Some agreements may be successfully interpreted principally by textual analysis, for example because of their sophistication and complexity and because they have been negotiated and prepared with the assistance of skilled professionals. The correct interpretation of other contracts may be achieved by a greater emphasis on the factual matrix, for example because of their informality, brevity or the absence of skilled professional assistance. But negotiators of complex formal contracts may often not achieve a logical and coherent text because of, for example, the conflicting aims of the parties, failures of communication, differing drafting practices, or deadlines which require the parties to compromise in order to reach agreement. There may often therefore be provisions in a detailed professionally drawn contract which lack clarity and the lawyer or judge in interpreting such provisions may be particularly helped by considering the factual matrix and the purpose of similar provisions in contracts of the same type. The iterative process, of which Lord Mance JSC spoke in Sigma Finance Corpn  1 All ER 571, para 12, assists the lawyer or judge to ascertain the objective meaning of disputed provisions.
14. On the approach to contractual interpretation, the Rainy Sky and Arnold case were saying the same thing."
The presumption of ownership of airspace and subsoil
"9. Bocardo's case is that it is trite law that a conveyance of land includes the surface and everything below it, unless there have been exceptions from the grant such as commonly occurs in the case of minerals. Star do not dispute this proposition as a general rule that applies where the rights of the surface owner are interfered with. But they maintain that it does not extend to the depth at which the operations were and are being carried out in this case. The minimum depth was 800 feet, while for the most part the depths were greatly in excess of this. Mr Michael Driscoll QC for Star said that he accepted that in law the surface owner owned the substrata to some depth, but not that far. He submitted that the wells and their tubes and casing did not interfere with or enter upon land in any meaningful way at all. Moreover the right to search, bore for and get the petroleum was vested in the Crown. Bocardo did not own, and had no right to possess, the petroleum.
10. It has often been said that prima facie the owner of the surface is entitled to the surface itself and everything below it down to the centre of the earth: see, for example, Rowbotham v Wilson (1860) 8 HL Cas 348, 360, per Lord Wensleydale; Bowser v Maclean (1860) 2 De G F&J 415, 419, per Lord Campbell LC; Pountney v Clayton (1883) 11 QBD 820, 838, per Bowen LJ; Elwes v Brigg Gas Co (1886) 33 ChD 562, 568, per Chitty J and National Carriers Ltd v Panalpina (Northern) Ltd  AC 675, 708, per Lord Russell of Killowen. The proposition that prima facie everything below the surface belongs to the surface owner is often linked to the proposition that everything above it belongs to him too: "everything up to the sky", as Sir William James V-C put it in Corbett v Hill (1870) LR 9 Eq 671, 673, or "everything under the sky" in the words of Bowen LJ in Pountney v Clayton. In Mitchell v Mosley  1 Ch 438, 450, Cozens-Hardy MR said that the grant of the land includes the surface and all that is supra – houses, trees and the like – and everything that is infra – mines, earth and clay, etc. Agreeing with him, Swinfen Eady LJ and Phillimore LJ said that this was a recognised rule of law. Plainly, the source for these remarks was the well-known Latin brocard cuius est solum, eius est usque ad coelum et ad inferos."
Application of the presumption to a demise
"50. Having considered these authorities, I conclude that there is nothing in them to prevent me giving effect to the provisional view I expressed in paragraph 45 above. Indeed, the authorities seem to me to provide support for that view. Whether one says that there is a presumption to be applied, I consider that where one is dealing with a demise of a building, where the wording of the demise is expressed by reference to a vertical division, and there is no wording expressing any horizontal division, it is natural to react to that wording by holding that there is no horizontal cut off which excludes the airspace above the building or, for that matter, the sub-soil below the building. My final view is that, in this case, the demise of a garage includes the airspace above the garage."
"The factual position now … is that the building or buildings 67 to 81 Mortimer Street form part of a terraced block. On those simple facts, for my part I can see no escape from the conclusion that the demise was of the whole of the building or buildings 67 to 81 Mortimer Street shown on the plan including, as part of that building or those buildings, the roof of the relevant two-storey area and the roof of the rest of the building or buildings and, in the normal way, the air space above those roofs. … I add that this lease, being a long lease of a whole building or whole buildings, is quite different from a lease or tenancy of a top-floor flat of a building which has been divided horizontally into flats" (emphasis supplied).
"In my view, the answer to this argument by Mr. Bickford-Smith is capable of being shortly stated. On a demise of this sort of premises which includes the roof space and the roof, the demise includes the air space above the roof and, accordingly, there is no trespass involved in carrying out an alteration which alters the profile of the roof so as to protrude further into the air space above the existing roof. Mr. Bickford-Smith submits to the contrary that the air space above the roof is not included in the demise and he does so because he submits a different principle applies where one is dealing with a property which is divided into flats. He submits that, in a case where a property is so divided, all that is in fact included in the demise is the actual area occupied by the flat. The demise is restricted laterally by the extent of the flat. He accepts, and clearly rightly accepts, that, if this was not a demise of a flat but a demise of the whole building, it would have included the air space above the roof, but he submits a different situation exists because this was merely a demise of a flat.
I can well see that, in a different situation where one is considering a block of flats containing a number of different premises occupied by different tenants where no tenant has included in his demise the roof, a position different from that which I have indicated could exist. However, in the situation that we are dealing with here of what was once a single residential unit which has been divided into two flats, in my view, Mr. Bickford-Smith's submission has no application. The roof space and the roof was included in the demise and the logical intent would be that the air space above should be included in that demise. Were the position otherwise one can easily see that all sorts of absurd results would follow: if the tenant of the upper flat wished to alter his chimney he would not be in a position to do so; if he wished to erect an aerial on the roof he would not be in a position to do so; if he wished to change the flow on the roof because of changes in building practices he would not be in a position to do so without the consent of the lessor, and the lessor would have a completely unfettered discretion to refuse that consent. Such a result would, in my view, be wholly contrary to the intent of section 19(2) of the 1927 Act which, read together with the clause dealing with the alterations in this lease, was intended to make the requirement of consent subject to the proviso that it should not be unreasonably withheld."
"The only point I make is that, if the demise of the top floor flat includes the roof and roof space, then the same rule applies as to the demise of the whole building."
In other words, Sir Roger Ormrod interpreted the words used by Nicholls LJ in a certain way, so as to prevent there being any inconsistency between what Nicholls LJ said and what the Court was saying in Davies v Yadegar.
"43. In my opinion, the authorities do not support the proposition advanced by Mr. Harpum that there is a presumption in any lease of, or including, a roof that it extends upwards to the full height of the airspace available to the lessor. Davies v Yadegar was a case in which the demise included the whole of the top floor and the whole of the roof. The passage emphasised in the judgment of Woolf LJ above suggests that, where the demise is of the roof of a small part of the building, in circumstances in which its use could affect tenants on other floors, no such presumption applies. I agree with Lewison on Interpretation of Contacts, 4th ed. at §11-12 that there are no clear presumptions relating to divisions of individual parts of a building."
"The Lessor hereby demises unto the tenant all that the Ground Floor and Basement and Cellar Flat (hereafter called the 'Flat') numbered 1 and being on the Ground Floor and Basement and Cellar of the Building and including one half part in depth of the structure between the ceilings of the Flat and floors of the Flat above it, and the internal and external walls of the Flat up to the same level, together with the land being the garden as is shown coloured pink on a plan hereto annexed, together with the easements, rights and privileges mentioned in the First Schedule hereto..."
"9. It seems to me that the wording used in cl.1 is of crucial importance. I bear in mind that this is a document that was prepared by lawyers and that the words will therefore have been carefully chosen. It is significant to me that the words that were used in cl.1 for the definition of the 'Flat' were 'the ground floor and basement and cellar flat'. One starts with what must be, on this analysis, rooms. It is not talking about, for example, the land which might have been conveyed. It is not uncommon where there are leases and apartments in blocks that what is transferred by way of lease is the self-contained unit of the flat. The fact that the draftsman chose to use those words and gave them there a defined meaning for the remainder of the lease is significant."
The deputy judge went on to say (at ) that in other provisions of the lease the use of the word "Flat" was consistent with the meaning which he favoured, that is "the built out part of the demise".
"16. What is of perhaps greater significance is that the obligation is on the landlord to maintain the foundations. Mr Holland argues that the foundations of a property such as this are so important to all three flats within a property that one would expect the freehold owner to retain control of the foundations so that it was not subjected to its rights of entry for the purposes of repair and imposing of repairing obligations, but rather it was to take the primary obligation by taking the whole interest in the foundations. There is, in my judgment, force in that submission that the foundations are in a class of their own because it is the position that the foundations will have a fundamentally detrimental effect on all three flats if they were to fail."
"30. It seems to me that the rationale for the presumption of usque ad is founded primarily where it is the freehold owner who has conveyed the freehold title to another person. The law is plain that it can apply to leasehold interests as well. However, the principle cannot be applied blindly in the case of leases and it must depend on looking at the particular circumstances of the lease within the context of the whole property in which that leasehold has been carved out."
"33. The leases that I am looking at are, as I have indicated, three in number, and they form really a carefully devised structure of rights and obligations. It would seem to me that there is in this context a world of difference between being able to develop upwards and therefore be of no real consequence to the remaining tenants of the property and to start digging under and into the foundations. It seems to me that this is very different from the case of a freehold owner of a property who would naturally have all the rights below ground. It seems to me that a structure such as this does not naturally lend itself to being in the same category of case where the presumption of usque ad is at all appropriate. I decline to apply any such presumption on the particular facts of this scheme."
Again it will be seen that the deputy judge emphasises the difference, in a building divided horizontally, between extending upwards and digging downwards.
The demise in the present case