Licensees And Relief From Forfeiture

The stakes were high in The Manchester Ship Canal Company Limited v Vauxhall Motors Limited (formerly General UK Motors Limited) [2018] EWCA Civ 1100 where a landowner stood to gain in excess of £300,000 a year if the court decided that a licensee had no right to relief from forfeiture in respect of a surface water discharge licence.

Although critical of its reasoning, the Court of Appeal agreed with the High Court and concluded that the licensee had a right to relief from forfeiture, effectively reinstating its existing licence for which only a £50 annual fee was payable.

Facts

In 1962 the Manchester Ship Canal Company ("MSCC") granted a licence (the "Licence") to Vauxhall for the discharge of surface water and trade effluent from its plant at Ellesmere Port into the Manchester Ship Canal.

The Licence was granted in perpetuity in consideration of a payment of £50 per year, with no provision for any increase. It included a right for MSCC to terminate where the annual fee was in arrears subject to giving prior written notice to Vauxhall.

Vauxhall failed to pay the £50 annual fee which was due on 12 October 2013. After giving written notice, MSCC terminated the Licence on 10 March 2014. Vauxhall's immediate offer to pay the outstanding fee was not accepted. The parties then entered into negotiations for a new licence and, although terms were agreed by mid-2014 on a subject to contract basis, a fresh licence was not completed. In January 2015 Vauxhall put MSCC on notice that they intended to apply to the court for relief from forfeiture and went on to make the application in March 2015.

By the time the appeal was heard in April 2018 the evidence was that the value of the right to discharge water and trade effluent into the canal was in the region of £300,000 to £440,000 per year.

High Court decision

His Honour Judge Behrens decided that he had jurisdiction to grant relief against forfeiture and exercised his discretion in favour of such relief. He came to this conclusion assuming (without deciding) that the right of passage of water granted in the Licence is "about as close to a possessory right as it is possible to imagine".

The Court of Appeal's decision

MSCC's appeal was based on an argument that the court did not have jurisdiction to grant relief from forfeiture. Even if it did, the application for relief was made too late.

Did the court have jurisdiction to grant relief from forfeiture?

Giving judgment, Lord Justice Lewison held that...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT