Sandom v Webb

A lessor who grants premises cannot retain a right over them unless the right is expressly reserved or the lessor clearly proves an established exception. An implied reservation based on common intention requires a necessary and definite inference from the circumstances. Long-standing and known use of the demised property is insufficient where it is equally consistent with revocable permission. Knowledge of existing advertisements, and the lessee's prior acquiescence in them, did not create a permanent right for the lessor to continue or profit from advertising on the outer walls. The burden remains on the lessor to establish the reservation clearly.

The appellant held the first and second floors of premises under a 21-year lease from the respondent. The exterior surfaces of the upper-floor walls formed part of the demise. For many years the respondent had maintained his own painted advertisement and had licensed space for a separate advertisement on those walls.

The lease contained no express reservation of advertising rights. Danckwerts J nevertheless held that a reservation should be implied because the advertisements had long existed and were visible when the lease was granted. The lessee appealed. The central issue was whether those facts justified an implied reservation enabling the lessor to retain and exploit advertising rights during the term.

1. Appeal allowed unanimously. Evershed MR delivered the leading judgment, with Jenkins and Morris LJJ agreeing. The question in the originating summons was answered in the negative.
2. A lessor or grantor is prima facie unable to assert a right or privilege over property demised or granted unless it has been expressly reserved. The rule prevents derogation from the grant. It admits recognised exceptions, including ways of necessity and reciprocal easements, but the lessor bears the burden of clearly proving facts which bring the case within an exception.
3. An implied reservation founded on common intention may arise only where it is necessary to give effect to a common intention that the granted or retained land will be used in a definite and particular way. The claimed right must also be capable of precise definition. A mere possibility that the parties would have agreed to a reservation, or facts equally consistent with a revocable permission, cannot meet that standard.
4. The respondent had not discharged that burden. The lessee's knowledge of the advertisements and his ten-year acquiescence did not establish a common intention that the lessor should enjoy advertising rights throughout the 21-year term. Nor was there evidence of bad faith by the lessee. The proper inference on the limited evidence was that the advertisements had continued by tacit permission or licence, terminable when the lessee challenged the respondent's asserted rights.
5. The court disapproved the aspect of Simpson v Weber which treated the absence of evidence of a contrary intention as sufficient to imply a reservation. That approach conflicted with the lessor's duty to reserve rights expressly or to prove a clear common intention.
6. Obiter, the court observed that an existing valid licence granted to the billposting company might bind the lessee as successor to the demised wall space. That possibility did not reserve to the lessor either future advertising rights or the proceeds of further licences. The precise consequences of existing arrangements and any account were left open.

• Court of Appeal: Allowed the lessee's appeal and reversed the conclusion that an advertising easement or reservation should be implied.
• High Court: Danckwerts J held that the circumstances justified an implied reservation allowing the existing advertisements to remain.