If you’re keen on land law you’ll probably be quite excited by a Supreme Court case this week. If you’re in the process of studying land law (and particularly if you’ve bought our Land Law LLB guide – see page 78) then you might want to take note of a change. The case of Manchester Ship Canal v Vauxhall Motors (page 35 of our new LLB Land Law Case Book) has been bouncing around from court to court for some time and there is now a definitive conclusion. Relief from forfeiture is available in relation to a licence as well as a lease provided that the contract grants proprietary or possessory rights and that the provision giving rise to the contractual termination right was inserted in the contract for a particular reason (in this case it was to ensure payment of an annual fee).
Vauxhall Motors had a licence to discharge water into the canal and had a significant structure on land to control that flow of water. The licence had been granted many years ago and was for an annual fee of £50. The market value of the right was more like £300.000 but a clause in the contract prevented Manchester Ship Canal from ever raising the fee. It was inevitable in these circumstances that when Vauxhall Motors overlooked a payment, the Ship Canal should rush to terminate the licence and seek to renegotiate a new one! After a long fight Vauxhall Motors has succeeded in obtaining relief from that forfeiture. Until now it had been thought that the right to seek relief from forfeiture was restricted to leases.