The topic of this post has a bit of a history to it and I shall indulge myself a little in recounting it. It stems from a problem question which was posed for tutorial discussion with undergraduate students (straightforward stuff then one might expect). The essence of the dilemma is concerned with whether section 62 of the Law of Property Act 1925 will have the effect of crystallising a contractual licence into an easement upon conveyance (it can be taken as read that the requisite test for the operation of s62 is met). I have asked every land lawyer I know for their views on the proper answer to this conundrum and the response has been a mixed one. It continues to drive me nuts, so I am now opening up the debate for anyone interested to participate. The more people to whom the question is posed, the more chance that someone can point to THE answer! Here’s hoping…
The question which arose is this: If consideration has been paid for the exercise of a right, thereby making the right pursuant to a contractual (as distinct from a bare) licence, can that right become an easement by virtue of the operation of s62? I have fundamental doubts that it can. However, the textbooks which I have consulted (Megarry & Wade, Cheshire & Burn, Gray & Gray, Gale) have not really assisted. They all refer to licences being converted by the operation of s62, but they do not distinguish between different types of licence. The authorities which these books refer to as being authority for the proposition that a licence will be converted by s62 are all bare licences, eg International Tea Stores v Hobbs [1903] 2 Ch 165, Wright v Macadam [1949] 2 KB 744, Goldberg v Edwards [1950] Ch 247. Not helpful!
My own view is that a contractual licence is an agreement which is already “clothed” with a legal character and cannot, therefore, be turned into something else which has an entirely different legal character (ie proprietary as opposed to personal), and something which is clearly contrary to the intention of the parties (if they had wanted it to be an easement and not a contractual licence which creates a personal right the parties would have surely created one), by virtue of s62. A fellow land lawyer from a different institution pointed to the unreported case of Dewsbury v Davies (1992 – available on Lexis) as being authority that a personal right is a personal right and nothing more, which, of course, it is. He said that Dewsbury v Davies was concerned with a gratuitous licence, but it seemed to him that if there is consideration it is almost inevitably going to push the agreement over into the realm of the personal rather than the proprietary and that he has never heard of an easement which includes with it the obligation to pay for the privilege of using it. All very helpful stuff and, in my view, completely right, but still not conclusive … yet.
Another land lawyer friend suggested that the case of IDC Group Ltd v Clark (1992) 65 P & CR 179 might shed some light on the question. This case does concern whether or not something which is a licence can be an easement and concludes that it cannot. However, the case does not concern the operation of s62, so is not really on point. Gale on Easements does not directly deal with the point either, although it does say at para 3-135 (newest ed):
“It is settled that general words in a conveyance to a sitting tenant will operate to grant him, as an easement, any right or advantage which is exercised by him, as tenant, over other land of the grantor, and is capable of being granted as an easement, including ‘rights’ exercised by permission and not of right”.
The interesting point which can be extrapolated from this is that a right being exercised pursuant to a contractual licence is surely a right which is being exercised “of right” and therefore cannot be caught by s62. However, arguably a right being exercised pursuant to a bare permission is also a right being exercised “of right”, although any such right is, of course, precarious and can be revoked by the grantor at will without the grantee having any means of redress.
So, that’s where I am with this one at present. I have a pretty firm view that contractual licences cannot be caught by s62 (but there are those that disagree). This may, of course, become academic if the Law Commission’s provisional proposals that s62 should be abolished are ultimately adopted. However, if anyone can point to something which draws this debate to a definitive conclusion I, and no doubt all of the other land lawyers I have been bugging relentlessly with this conundrum, would be very grateful!
Rowena Meager's Property Law Blog 
There is good discussion of the law on this point in the CA case of Hair v Gillman (2000). I had not heard your point argued before. It is an interesting one, although at first sight, I do not see why the nature of the licence should be significant, given that section 62 refers to “all..liberties, privileges, easements, rights, and advantages whatsoever..” Perhaps there is mileage in it, though, in that a contractual licence is likely to have been intended as a temporary right, whereas a bare licence, arising by permissive activity, is more open-ended? The authorities appear to draw a distinction between rights intended to be a temporary fix (which should not be converted to permanent status by section 62) and rights without implied time limitations.
Nice site.
By: Alan Riley on July 29, 2009
at 11:32 am
Alan, thanks for your comment. Hair v Gillman is a case which I had looked at previously (amongst many others!). You are right that there is an extensive discussion on the operation of section 62. However, once again, it concerns a gratuitous permission, not a contractual licence. So I still remain slightly perplexed as to the “right” answer although nothing I have read since I wrote the post has persuaded me to change my view that a contractual licence cannot become an easement by virtue of the operation of section 62. I just cannot find “the authority” which says that it is so! RM
By: RM on July 29, 2009
at 5:34 pm
Hi.
There is another defect in the operation of section 62. Is there a need for prior diversity of ownership or occupation as between dominant and servient tenements or it is sufficient if the user is “apparent and continuous”? Gray & Gray stated that both requirements are alternatives. But this contradicts the remarks made by Lord Wilberforce in Sovmots v Secretary of State for the Environment..
By: Jerry Peh on March 16, 2010
at 9:41 am
I am not sure that the issue you identify is so much a defect in the operation of section 62 as a defect in the interpretation of the circumstances in which section 62 will operate by the courts (there is no defect in Gray & Gray in which the law is simply recited). The rule that there should be prior diversity of occupation is well established and often referred to as the Rule in Long v Gowlett. However, notwithstanding the apparent approval of that rule in Sovmots, in the more recent Court of Appeal decision in P & S Platt v Crouch section 62 was held to operate where the right was continuous and apparent despite the land concerned (both the dominant and servient tenements) having, prior to the easement having been created, been in common ownership. There is, therefore, authority for the proposition you refer to as having been recited in Gray & Gray. Whether the Court of Appeal has erred in its decision in this particular case is another question.
By: RM on March 17, 2010
at 6:27 pm