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Rights of Way: London Tara Hotel v Kensington Close Hotel

15 December 2011

On 22 November 2011 the Court of Appeal handed down its judgment in the case of London Tara Hotel Limited v Kensington Close Hotel Ltd.

This confirmed the 2010 first instance decision that Kensington Close Limited (KCHL) had acquired a prescriptive right of way to use part of the land of London Tara Hotel Limited (Tara).

Background

This case involved a dispute over the use by KCHL of a private roadway owned by Tara in Kensington. KCHL contended that it had acquired a prescriptive right of way over the roadway by virtue of 20 years’ use “as of right”, in other words “without force, without secret, without permission”, the tripartite test that must be met in order to make out a case for a prescriptive easement. Of particular relevance was a 1973 licence between Tara and KCHL’s predecessor, in which Tara granted KCHL’s predecessor, KCL, the right to use the roadway. KCL had subsequently transferred the hotel to another party, and this change of ownership was key to the question of whether KCHL could argue that they had used the roadway “without permission”.

For a detailed summary of the original judgment as well as some background on prescriptive easements, please see our article here.

What did the parties say?

Tara’s appeal focused on two main points: first, that the lower court was wrong to have concluded in favour of KCHL because Tara did not know about the change of ownership, and had no reason to suspect that the hotel had changed hands. KCHL was therefore using the road with permission and could not have acquired a prescriptive easement.

In the alternative, Tara contended that even if the original licence had terminated on the change of ownership, a new licence should impliedly have come into being upon its termination, thereby preventing a prescriptive easement from arising because the requisite 20-year threshold was not met.

What did the Court say?

The Court of Appeal endorsed the lower court’s application of the phrase “nec vi, nec clam, nec precario” (without force, without secret, without permission) vis-à-vis establishing whether KCHL had acquired the prescriptive easement.

Even though Tara was unaware of the change of ownership from KCL to KCHL, the licence was personal between those two parties and had terminated when the ownership had changed. This meant that Tara’s argument that KCHL had permission to use the roadway and could not have acquired a prescriptive easement failed. Nor could it be said that KCHL had used the roadway secretly on the basis that they had not informed Tara of the ownership change. The Court acknowledged that it might have been different had KCL deliberately concealed the change of ownership from Tara, or otherwise misrepresented to them the position. In this case however, there was no question of concealment.

As for the possibility of a new implied licence that Tara argued should have arisen on termination of the previous licence, the Court of Appeal disagreed. In order for this to occur, there needed to be “some positive, overt act by the servient owner”, which in this case there was not. Tolerance or “mere inactivity” would not suffice to bring into an existence a new licence; something more was required, which did not exist here.

What does this mean?

The Court of Appeal in this case has taken quite a practical view and has justified the outcome by noting that where, as in this case, a servient landowner was aware of a pre-existing licence arrangement that it thought was continuing, it would only be necessary for the landowner i.e. London Tara Hotels to enquire every 18 years (which is “not onerous”) as to what the situation was in order to ensure that no prescriptive easement arose. This case therefore serves as a reminder to landowners to regularly monitor and audit the use of their properties, and, particularly in the cases of licences, to make sure they are kept abreast of any changes of ownership.