UK SC | Court has jurisdiction to grant equitable relief from forfeiture of rights to make specific use of neighbouring land granted in a perpetual licence

United Kingdom Supreme Court: A Full Bench of Lord Carnwath, Lady Black, Lord Briggs, Lady Arden and Lord Kitchin, JJ. dismissed the instant appeal on the ground that the license conferred a possessory right and there is no basis on which Court should interfere with the Judgment of lower court of appeal.  

The appellant was the owner of the Manchester Ship Canal and adjacent riparian land. Vauxhall Motors Ltd, the respondent, bought the land adjacent to the riparian land to construct a vehicle manufacturing plant. The respondent needed to discharge surface water and treated industrial effluent from the planned manufacturing complex into the canal, and acquired a small part of the riparian land for the same from the appellant, leaving a small strip of land between the canal and the factory site across which the respondent acquired the right to discharge the surface water and industrial waste by the means of a license. The license was terminated when Vauxhall failed to pay its annual rent. Vauxhall then claimed equitable relief from forfeiture which was granted by the lower court. 

Katherine Holland on behalf of the appellant argued that only a tenant and not licensee may ask for relief against forfeiture as a lease confers proprietary interests in the land while a license does not. She also submitted that possessory rights define the boundary of equitable relief from the forfeiture of rights in relation to chattels and the same can’t be applied to rights over a land. 

William Norris on behalf of the respondent argued that a better boundary than one which merely accommodated possessory rights would be one which extended the equitable jurisdiction in relation to all forms of rights to use property, provided only that the right of termination is intended to secure the payment of money for the performance of other obligation.  

The Court rejected the claim that possessory rights in relation to chattels and other personality equates to something more akin to ownership, and therefore a proprietary interest in relation to land. It was held that the lower court was right to conclude that the rights granted by the license fell within that possessory class to which the jurisdiction to grant relief extends.[Manchester Ship Canal Ltd. v. Vauxhall Motors Ltd., [2019] 3 WLR 852, decided on 23-10-2019]

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