Duchess of Bedford House RTM Company Limited & Ors v Campden Hill Gate Limited

A reservation of rights must be construed from its natural and ordinary language, read as a whole and against the admissible background. Commercial common sense cannot override the language used. An exception preserving rights already subsisting is not confined to rights expressly granted under an earlier lease. A further exclusion for rights that might prejudice future rebuilding or alteration requires a practical and realistic proposal grounded in reality. A merely conceivable interference is insufficient. A settled communal practice of residents parking can create a right appurtenant to a block of flats. It is unnecessary to prove that every tenant parked or that there was space for every vehicle. General reservation words may encompass a de facto right converted into a legal right.

The appellants were long leaseholders of flats at Duchess of Bedford House. They claimed a right to park on Sheldrake Place East. HHJ Gerald found in their favour and held that the right had been reserved under the 1969 headlease and passed under the 1974 headlease.

Campden Hill appealed. Adam Johnson J allowed that appeal and declared that the appellants had no right to park on Sheldrake Place, in a judgment reported at [2022] EWHC 2489 (Ch). The Court of Appeal considered the proper construction of the 1974 Carve-Out Clause, the effect of the 1969 reservation, the communal parking practice, permission for additional grounds, and an application to adduce fresh evidence.

Lady Justice Asplin gave the substantive judgment. Lord Justice Birss and Lady Justice King agreed. The appeal was allowed, and the application to adduce fresh evidence was refused.

1. Construction. The Carve-Out Clause had to be read according to its natural and ordinary meaning, in the context of the 1974 headlease and admissible background. The placement of the words except those now subsisting was significant. The clause was a negotiated compromise: no new rights would be created through the general law or section 62(2) of the Law of Property Act 1925, but subsisting rights would pass unless caught by the second limb.
2. Second limb. The expression concerning rights that might restrict or prejudicially affect future rebuilding, alteration, development or redevelopment required a practical and realistic approach. The proposed works had to be grounded in reality. A construction under which almost any conceivable alteration would suffice would make the exception virtually meaningless. The proposal also had to be compatible with the express right of way.
3. Application. The right of way did not automatically exclude consideration of parking rights, but the evidence did not establish that the 1973 parking proposal materially reduced available spaces in the manner found by the High Court judge. The judge had been wrong to interfere with HHJ Gerald’s assessment. The right to park therefore remained outside the Carve-Out Clause and passed with the 1974 headlease.
4. Nature of the right. Applying 22 March 1982 (unreported), a settled communal practice by a substantial number of residents could create a right appurtenant to a block of flats. It was unnecessary to prove that every tenant parked or that every flat had an exercising predecessor. The reservation of rights belonging to or enjoyed by adjoining or neighbouring premises was wide enough to reserve the de facto parking right and convert it into a legal right.
5. Procedural matters. Under rule 52.21(2) of the Civil Procedure Rules 1998, the fresh documents were refused because they could have been obtained with reasonable diligence, their influence was uncertain, their accuracy raised questions, and the application was late. Permission for the additional grounds was granted because the criteria in [2019] EWCA Civ 360 were satisfied.

• Court of Appeal (Civil Division) allowed the appeal and restored the conclusion that the appellants had a parking right on Sheldrake Place East: [2023] EWCA Civ 1470.
• High Court Adam Johnson J allowed Campden Hill’s appeal from HHJ Gerald and declared that the appellants had no right to park on Sheldrake Place: [2022] EWHC 2489 (Ch).
• First instance HHJ Gerald held that the appellants had a right to park on Sheldrake Place East and that it was not excluded by the 1974 Carve-Out Clause. The citation is not stated in the judgment.