Rights of Mortgage

Bradley -v- Carritt; HL 11-May-1903

Shares in a tea company had been mortgaged to secure a loan from a broker
on terms that the mortgagor would seek to ensure that the mortgagee
should thereafter have sale of the companys teas. The mortgage contained
a covenant that, if the company sold its teas otherwise than through the
mortgagee, the mortgagor would pay to the mortgagee an amount
equivalent to the commission that he would have earned from the company
as broker. It was complained that the agreement was a clog on the
mortgagors equity of redemption.
Held: (Lord Lindley dissenting): The agreement did not fail, falling within the
principle in Noakes v Rice.
Biggs v Hoddinott [1898] 2 Ch 307, where it was held that, in a brewery
mortgage case, a covenant to take beer from the mortgagee limited to the
continuance of the security did not clog the equity of redemption, it being
generally realised that an extreme response to perceived clogs undermined
the commercial arrangements of the parties.
Newport Farms Ltd & ors v Damesh Holdings Ltd & ors (15th July
2003) TLR PC A mortgage lender exercising a power of sale of land must take
sufficient care to obtain the best price reasonably obtainable. However the
steps to be taken depended on the circumstances of the case and did not
necessarily require taking a series of defined steps or conforming to a set of
invariable rules

Easements and profit by grant

Stafford v Lee ( 1992)
Area of woodland granted by deed of gift. Owners wanted to build a house,
claimed that the builders had a right to use the access to deliver building
materials. Owners of the access road claimed that the right of way was
limited to original use of the land, as woodland. But/ original grant envisaged
a house being built. Held: easement based on common intention was upheld
Wheeler v JJ Saunders [1995] 3 WLR 466 Court of Appeal
The claimant, Dr Wheeler, owned a farm which had a farmhouse and some
holiday cottages. He lived in the farmhouse and let out the holiday cottages.
He leased the farm to the defendant, JJ Saunders ltd. JJ Saunders obtained
planning permission to build a Trowbridge house on the farm for the purpose
of keeping pigs for breeding. Two years later he obtained permission to build
another Trowbridge house. The second house was built just 11 meters from
the farmhouse and holiday cottage. Dr Wheeler brought an action in
nuisance in relation to the noise and smells emanating from the pig houses.
The trial judge found for the claimant and ordered damages and an
injunction. The defendant appealed contending that since they obtained
planning permission for the Trowbridge houses, any smells or noise in
relation to the pigs can not amount to a nuisance.
Held:
The appeal was dismissed. The granting of planning permission differs from
statutory authority and confers no immunity from an action in nuisance. The
decision in Gillingham Borough Council v Medway Dock merely states that
the granting of planning permission may change the neighbourhood which
may make it more difficult to establish a nuisance. It does not authorise a
nuisance.

Schwann -v- Cotton; CA 1916

Blackacre, Greenacre and Whiteacre had all formerly been in common
ownership and the owner of Whiteacre denied that Blackacre was entitled to
an easement to pass the water from Greenacre to Blackacre.
Held: The Will which effected the severance of the three properties operated
to devise Blackacre with the right of passage of such water as might flow

through the pipe and to devise Whiteacre subject to such a right. Further,
although the right of Blackacre to a supply of water from Greenacre had not
been established, the possible lack of any right to such water as against
Greenacre did not impair the validity of the right to the passage of water
through Whiteacre. In considering an easement for a water supply the court
drew a crucial distinction between a right to supply of water and a right to
the passage of water. The obligation was limited to a duty to allow water to
flow along the pipe. It was not a duty to supply water.
Millman -v- Ellis; CA 1996
The defendant had sold part of his land to the claimant. A right of way was
granted over a lane. The purchaser asserted that he had the use of a lay-by
on the lane which would otherwise be dangerous. The vendor said the plan
did not include a right over the lay-by.
Held: The criteria for establishing a quasi-easement were satisfied. Both lane
and layby were covered in one unbroken tarmac surace, and the use was
therefore continuous and apparent. The contrasting safety with and without
the use of the layby was significant. The absence of any specific mention of
the layby was not inconsistent with an implied grant. The wording of the
grant did not exclude such an implied right.
Goldberg v Edwards [1950]
o FACTS
V owned large house with smaller house attached
V sells smaller house
V had been using large house to access small house prior to the sale,
although there was another way to enter
New owner of small house wanted to claim an easement over the access
o HELD: Easement denied no necessity if there is an alternative
Mulvaney -v- Jackson, Gough, Holmes and Holmes; CA 24-Jul-2002
Several cottages and adjacent open land had been in common ownership.
The cottages were sold off individually with rights of way over the plot, but
the land had been used as garden by the cottagers. The land owner removed
a flower bed.
Held: The use of the land over the years as a communal garden had created
an easement and the defendants had gone along with the use. The judge
had made the wrong order in allowing for the restoration of a particular
flower bed, he should rather have declared the right to use the flower bed for

communal purposes in accordance with the right established. An activity

which would be justified by an express grant does not necessarily support
the existence of the same right claimed by prescription since the evidence,
overall, may establish a different right or no right at all.

Licenses
In Lynes v. Snaith [1899] 1 Q.B. 486, the defendant was allowed by her
father-in-law to take possession of a cottage and live there rent free for
upwards of thirteen years. The county court judge held that the defendant
was a licensee and not a tenant. On appeal, Lawrence J. held, at page 488:
It is clear that she was a tenant at will and not a licensee; for the admissions
state that she was in exclusive possession a fact which is wholly
inconsistent with her having been a mere licensee.

Foster v Robinson[1951] 1 KB 149.

Farm worker allowed to live rent free in cottage after retired

Errington v Errington Wood [1952] 1 KB 290
FactsFather bought a house for his son and daughter-in-law. He paid _250 as
a down-payment, and put the title of the house in his name. He told his
daughter-in-law that if they paid off the remaining mortgage (_500) in weekly
instalments, he would transfer the title to them when the house was
completely paid for. He died before they paid it all off. The late Father's
widow then sued for the house.
IssueDoes the young couple have a contractual right to continue paying
instalments, and upon completion of payments, take title of the house? Does
their agreement remain binding despite the father's death?
RatioWithin a unilateral contract, there is an implied promise not to revoke
once performance has commenced.
The father's promise was a unilateral contract. It could not be revoked by
him once the couple entered on performance of the act. As long as the young
couple fulfill their side of the contract (continue paying instalments), the

contract remains binding, and they will have the property transferred to
them once the payments are completed.
This judgement protects the interest of the party who is acting on the
promise of the offeror.
HeldJudgement for the Defendant. Appeal dismissed.

in Aslan v Murphy [33] a licence was granted to the occupier, the landlord
retained a key so that he could enter the property, the occupier was also
require to share the basement property and be out of the accommodation for
an hour and the half each day. The courts held that the clauses were
unrealistic held there to be a lease not a licence.

Hadjiloucas -v- Crean; CA 1988

Two ladies applied to take two-roomed flat with kitchen and bathroom. Each
signed an agreement to pay 260 per month to share the use of the flat with
one other person. They moved into the flat and enjoyed exclusive
occupation. In terms, if the agreement of one lady was terminated, the
owner could require the other to share the flat with a stranger. The county
court judge decided that the agreements only created licences.
Held: A retrial was ordered to investigate the facts further. However, the two
ladies applied for and enjoyed exclusive occupation unless and until one of
their agreements was terminated, and they had acquired a tenancy
protected by the Rent Acts. The reservation to the owner of the right at
common law to require one of the ladies to share the flat with a stranger was
a pretence.
In Family Housing Association v Jones (1990), where a Housing Association
housed homeless persons temporarily, the Court of Appeal decided that a
tenancy was nevertheless created, because in reality it was intended that
Mrs Jones and her child were to be the only occupiers, paying weekly, and in
practice they did not actually share the accommodation; notwithstanding an
express provision in the agreement that she did not have exclusive
possession, and despite the Association holding a key

in the case of Westminster City Council v Clarke [1992] 1 All ER 695where

the local authority served a notice terminating Clarke's license Clarke argued
that he was a tenant. The question to ask was a resident of a temporary
hostel for homeless people a tenant or licensee. Whereupon it was decided
that the appeal would therefore be allowed and possession order restored.
The reason for this was there was nor a secure tenant. The council needed to
retain possession of all the rooms in the hostel in order to supervise and
control the activities of the occupiers.
AG Securities v Vaughan [1990]
AG Securities, an unlimited company, had a long lease of 25 Linden
Mansions, Hornsey Lane, London, with four bedrooms and communal areas.
It rented to Nigel Vaughan and three others. Each moved in at different times
from 1982, signing independent agreements. In May 1985 AG Securities
terminated the agreements. They claimed they jointly held the lease and
therefore had statutory protection. Judge held there was no lease. Court of
Appeal held the occupiers had a lease. Sir George Waller dissented.
The case of Mikeover Limited v Brady [1989] 3 ALL ER 618 looks into
the position regarding the requirement for rent before a tenancy can exist. In
this situation the courts held that there was no tenancy because of how the
occupants paid their rent. The deciding factor was that the occupants did not
have a joint responsibility to pay the applicable rent, they had an individual
obligation. This was sufficient for the courts to hold that the agreement was
in fact only a licence to occupy the property.