A cautionary tale: licences do not always prevent the creation of prescriptive rights
Rights of way come in various guises and can be created in a number of different ways. The most common way of creating a right of way is by a formal document such as a Conveyance but the Courts have also recognized creation of easements in other way including by prescription, that being by the open and continuous exercise of the right claimed for not less than 20 years without express consent of the landowner.
One common way of avoiding the creation of a prescriptive right of way is by granting a third party a licence to use the land in a particular manner as this ensures the use of the land is by consent. However, the case of London Tara Hotel Limited v Kensington Close Hotel Limited (2010) is a cautionary tale highlighting that simply granting a licence may not prevent the creation of a right of way by prescription in future.
By a licence dated 30 January 1973, the then owner of the London Tara Hotel, granted the then owner of Kensington Close Hotel, the right to use a service road for access to and from the Kensington Close Hotel with or without vehicles. The licence was for one year, and thereafter from year to year unless terminated by 4 weeks notice before any anniversary or as a result of a breach of the terms of the licence, and in consideration of the sum of £1 per year "if demanded as an acknowledgment that the enjoyment of said way is under this Agreement and not otherwise".
The service road was used for deliveries to the Kingston Close Hotel from 1973. However, by letter of 10 August 2007, solicitors for London Tara Hotel Limited, the then owners of London Tara Hotel, wrote to Kensington Close Hotel Limited, the then owners of Kensington Close Hotel Limited (ownership of both hotels had changed a number of times since 1973), asserting that it had no rights of access over the service road.
London Tara Hotel Limited asserted that the licence granted in 1973 was personal to the then owners of Kensington Close Hotel. London Tara Hotel Limited claimed that any use of the service road by the current owner of Kensington Close Hotel was therefore a trespass and that further use of the service road must cease.
Kensington Close Limited claimed that it had acquired a prescriptive right of way over the service road by 20 years use of the service road without express consent, effectively turning London Tara Hotel Limited's argument that the Licence was personal to the 1973 owner of Kensington Close Hotel to its own advantage. London Tara Hotel Limited sought an injunction against Kensington Close Hotel Limited preventing any further trespass.
The claim for an injunction failed. The Court declared that Kensington Close Hotel Limited were the beneficiaries of a right of way for commercial vehicles and coaches, that right of way having been accrued by virtue of 20 years use or the service road by such vehicles without licence or consent.
In course of his judgment, Justice Roth's judgment put forward 2 ways in which the owners of London Tara Hotel could have prevented the creation of the prescriptive right of way, those being:-
1. they could have demanded the payment provided for under the 1973 licence. That would have created an implied licence, stopping the 20 year prescription clock from ticking; or
2. they should have checked whether there had been a change of owner of Kensington Close Hotel. Had they done so, upon discovering that had been a change of ownership, they could have taken steps to put a new written licence in place.
This case emphasises that landowners need to ensure that they closely monitor third party use of their land and take positive steps to either regulate that use or alternatively stop that use, especially given that the costs relating to such disputes can be substantial. It is not known what the overall costs incurred in the case of London Tara Hotel Limited v Kensington Close Hotel Limited were but in January 2011, the Court ordered that interim costs payment of £400,000 should be made. Based upon that interim payment, it would not be surprising if the parties combined costs in that dispute exceeded £1,000,000
Rollits' Property Dispute Resolution Group has a wealth of experience in dealing with right of way disputes and providing proactive advice on what steps can be taken to prevent third parties establishing rights which landowners have no desire to be created over their land.
If you have any queries relating to issues covered by this article or any property related dispute, please contact Ralph Gilbert, partner and Head of the Property Dispute Resolution Group on 01482 323239 or firstname.lastname@example.org
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.