Kelvin F. K.

Low

Certainty of Terms and Leases: Curiouser and Curiouser

Kelvin F. K. Low*
The common law rule that requires leases to have a fixed terminus from the outset is one that
has been much criticised. In Berrisford v Mexfield Housing Co-operative Ltd, the Supreme Court
managed to blunt its effect by suggesting that most leases of uncertain duration can be transformed
into 90-year tenancies. However, it is suggested that their Lordships have possibly misunderstood
and overstretched an ancient common law ‘rule’ and have not fully considered some of the
implications of their decision.

‘Begin at the beginning, . . . and go on till you come to the end; then stop.’1

Beginnings and endings, particularly endings, feature no more prominently in the

law than in the context of leases. In particular, the law requires that a leasehold
estate, or a term of years absolute, must from the outset have a fixed terminus.This
rule of law would thus invalidate the grant of a fixed term lease until England
wins theWorld Cup. Likewise, a periodic tenancy which forbids either party from
exercising its right to terminate unless England wins the World Cup would also
be rendered void.Though much criticised, the courts seem resigned to deferring
to the respectability this rule has built up simply through the passage of time.‘It
is far from clear’, it has been said, ‘that the historic rationales for the rule retain
today the force which they may once have enjoyed.’2 In Prudential Assurance Co
Ltd v London Residuary Body,3 (Prudential Assurance) although Lord Browne-
Wilkinson joined in affirming the rule, his Lordship nevertheless described it as
‘ancient and technical’, productive of ‘bizarre outcome[s]’ and devoid of ‘satis-
factory rationale’ or ‘useful purpose’.4 The rule is said to be objectionable ‘on the
ground that it frequently denies efficacy to perfectly sensible arrangements
derived from a process of conscious bargain between autonomous persons.’5
In Berrisford v Mexfield Housing Co-operative Ltd,6 (Berrisford v Mexfield) a seven
member panel of the Supreme Court echoed his Lordship’s views.Although the
rule was retained, their Lordships avoided the ‘bizarre outcome’ which a straight-
forward application of the rule to the facts of the case would have engendered by
transforming a lease of otherwise uncertain duration into a 90-year tenancy.

THE FACTS AND THE LOWER COURTS

Mexfield Housing Co-operative Ltd was founded by a bank as a fully mutual

housing association as part of a mortgage rescue scheme. In 1993, Mexfield
*School of Law, Singapore Management University.
1 L. Carroll, Alice’s Adventures in Wonderland (London: Macmillan, 1865) 85.
2 K. Gray and S. F. Gray, Elements of Land Law (Oxford: OUP, 5th ed, 2009) 326.
3 [1992] 2 AC 386.
4 ibid, 396.
5 Gray and Gray, n 2 above, 326.
6 [2011] UKSC 52.

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purchased 17 Elton Avenue, Barnet, from Ms Ruza Berrisford and let it back to
Ms Berrisford under an ‘Occupancy Agreement’. The premises were to be let
‘from month to month’ until determined in accordance with the agreement.
Whereas there was no restriction on when Ms Berrisford could determine the
tenancy, Mexfield’s rights to bring the tenancy to an end were specifically limited
by clause 6 of the agreement.One of the limited instances under which Mexfield’s
rights to determine the tenancy would become exercisable was upon Ms
Berrisford’s failure to pay rent for 21 days. When Ms Berrisford did fall into
arrears, Mexfield served upon her a notice to quit, though without apparently
relying on its right to do so under clause 6. It argued that the ‘Occupation
Agreement’ could not create a valid tenancy as envisaged by the parties because,
on the basis of the rule in Prudential Assurance,7 any fetter on the right of either
party to determine a periodic tenancy would render the period of the tenancy
uncertain, which would have the effect of invalidating the lease. In its place, by Ms
Berrisford’s actions in taking possession of the premises and paying a monthly
rent, would be a monthly tenancy without the offensive fetter.As such, Mexfield
would have been perfectly entitled to determine the tenancy by serving a month’s
notice on Ms Berrisford for no reason at all.This is all trite law and it is no surprise
that Mexfield succeeded by way of summary judgment before Peter Smith J.8
This defeat came, however, when Ms Berrisford was unrepresented. On appeal
to the Court of Appeal,9 Ms Berrisford came to be represented by MrWonnacott
whose ‘highly learned’‘yet cleverly economical’10 arguments persuadedWilson LJ
of the merits of his client’s case.
Three arguments were presented though one was abandoned midway through
the hearing as‘an academic question too far’.11 First,it was submitted that,although
PrudentialAssurance had the effect of negating the offending clause at common law,
nevertheless equity could intervene to prevent Mexfield, as an immediate party to
the tenancy agreement, from seeking possession as against Ms Berrisford, another
immediate party to the tenancy agreement. Secondly, it was argued that, to the
extent that no effect could be given to the clause as a term of a tenancy, the parties
should be taken to have entered into a licence for Ms Berrisford to occupy the
premises so that the clause could nevertheless constrain Mexfield’s right to recover
possession. Although Wilson LJ was persuaded by the first submission, ingenuity
nevertheless failed to prevail against authority and the majority of the Court of
Appeal (Aikens and Mummery LJJ) reluctantly ruled against Ms Berrisford.

MISGIVINGS BEFORE THE SUPREME COURT

On appeal to the Supreme Court, Mr Wonnacott presented even further reasons

why his client’s appeal should be allowed.There may be disappointment in some

7 n 3 above.
8 Mexfield Housing Co-operative Ltd v Berrisford [2009] EWHC 2392 (Ch).
9 [2010] EWCA Civ 811; [2011] 1 Ch 244, noted by K. F. K. Low,‘Leases and the maximum duration
rule yet again, but with a twist’ (2011) 127 LQR 31.
10 ibid at [5].
11 ibid at [12]. Mr Wonnacott had sought to argue that equity could provide relief against forfeiture
even in favour of non-owners of property rights.

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 Kelvin F. K. Low

quarters that a call was not made for the rule to be abandoned12 but there was in
any event no inclination to effect such a dramatic change to a long-established
rule.13 Not only was there a fear that such a change in the law ‘might upset long
established titles’,14 such a change would be incompatible with the Law of
Property Act 1925 which envisages only two estates in English law, the fee simple
and the term of years. Nevertheless, like Lord Browne-Wilkinson before them,
some of their Lordships were equally vociferous in their criticism of the rule.
Lady Hale described the rules as having an ‘Alice in Wonderland quality’ about
them,15 a ‘Carrollian characterisation’ reinforced by Lord Neuberger.16 Indeed,
judicial criticism of the rule appears to have grown in strength since Prudential
Assurance. Whereas Lord Browne-Wilkinson’s was a lone voice in Prudential
Assurance, Lord Dyson joined Lord Neuberger and Lady Hale in open criticism
of the rule’s apparent irrationality.17 Given that the remaining Law Lords con-
curred in Lord Neuberger’s leading judgment, it cannot be a stretch to imagine
that they share in some at least of his Lordship’s misgivings as to the rule.
Their Lordships’ misgivings are, however, arguably misguided, as are much
of the criticisms. Had the lease not left its roots in contract and evolved into a
species of property rights, complaints about unnecessary interference with party
autonomy may well be valid. However, it has long been recognised that con-
tracting parties may not create property rights willy nilly as they fancy which
thereafter bind their successors.18 However the numerus clausus principle is justi-
fied, it no doubt exists and not simply in common law systems either.This does
not mean, of course, that the rules relating to leasehold estates may not continue
to evolve but a consideration of their Lordships’ actual decision will demonstrate
that an abandonment of the rule on certainty of terms for leases has far-ranging
implications on our understanding of the law of property well beyond the
immediate concern of upsetting long established titles.

MR WONNACOTT’S EVIDENCE

That a consideration of the abandonment of the rule was unnecessary in this case
was the result of Mr Wonnacott’s ‘impressive and scholarly research’19 and ‘con-
spicuously clear and learned submissions’.20 Three different arguments were put

12 n 6 above at [37].
13 ibid at [35]–[37] per Lord Neuberger, [96] per Lady Hale and [115] per Lord Dyson.
14 ibid at [37] per Lord Neuberger citing Lord Browne-Wilkinson in Prudential Assurance n 3 above,
397.
15 ibid at [88].
16 ibid at [34].
17 ibid at [115].
18 B. Rudden,‘Economic Theory v Property Law:The Numerus Clausus Problem’ in J. Ekelaar and J.
Bell (eds), Oxford Essays in Jurisprudence (Third Series) (Oxford: Clarendon Press, 1987) 239. For
specific case law to this effect, see Keppel v Bailey (1834) 2 My & K 517, 535 per Brougham LC;
Hill v Tupper (1863) 2 Hurlst & C 121 per Pollock CB; StockportWwks v Potter (1864) 3 H & C 300,
314 per Wilde B, 321 per Bramwell B. See also O. W. Holmes, The Common Law (Boston: Little,
Brown & Co, 1881) 407.
19 n 6 above at [116] per Lord Dyson.
20 ibid at [11] per Lord Neuberger. See also [86] per Lord Walker.

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before their Lordships. First, that the grant of leasehold estates of uncertain
durations were treated as grants of determinable freehold life estates by an ancient
common law rule, which by the operation of section 149(6) of the Law of
Property Act 1925, are transformed into determinable 90-year leasehold estates.A
90-year tenancy with the same fetters would not fall foul of the certainty of term
rule so that the fetters would remain valid and enforceable as between landlord
and tenant. Secondly, if the ‘Occupation Agreement’ did not create a valid lease, it
nevertheless created a valid and enforceable licence as between the parties. Finally,
the fetters,even if they were not enforceable in rem as a term of the tenancy,should
nevertheless be enforced by the courts in personam as a matter of contract.

IT’S ALWAYS 90 YEARS NOW

Over the course of her adventures inWonderland,Alice is informed by the Hatter

that, in retaliation for ‘murdering the time’,Time wouldn’t do a thing he asked
so that ‘[i]t’s always six o’clock now.’21 According to Berrisford v Mexfield, by a
process of transmogrification and re-transmogrification, all grants of leasehold
estates of uncertain durations are always grants of 90-year leases now.As they now
have a fixed terminus, the fetters would now be valid after all.The process takes
two stages, the first through the operation of a supposed ancient rule of the
common law22 and the second via statutory intervention necessitated by Parlia-
ment’s ‘murder’ of the freehold life estate.23 Owing to its apparent pedigree in
authority, this argument demonstrated itself to be the path of least resistance to
their Lordships. As their Lordships explained, the absence of this argument in
Prudential Assurance was explicable as it would not have made any difference in
that case.24 However, Lady Hale admitted that it was ‘curiouser and curiouser’.25
This conclusion is perhaps less curious than it is precarious.The rule identified
in the first stage, traceable as far back at least as Bracton’s De Legibus et Consue-
tudinibus Angliae,26 does not appear to have originated as a rule to rescue failed
leases of uncertain duration at all. It is discussed in Bracton under the heading ‘Of
the Assize of Novel Disseisin’, in which the author sought to discuss the rights of
tenants of a disseisor should the disseisee recover his estate. It is not evident that
Bracton regarded the ‘rule’ as one of law. According to Thorne’s translation, the
text of Bracton reads:27

But if he says ‘I give and grant to you so much land until you have taken thence forty
pounds,’ because it cannot be known how long it may take for so many pounds to
be raised from so much land, because the term is uncertain and undetermined, it is evident
that the tenement will remain a free tenement until so many pounds are raised, since it

21 L. Carroll, Alice’s Adventures in Wonderland n 1 above, ch 7 ‘A Mad Tea-Party’.

22 n 6 above at [43]–[44] per Lord Neuberger and at [117] per Lord Dyson.
23 Law of Property Act 1925, s 1.
24 n 6 above at [92] per Lady Hale.
25 ibid at [93].
26 G. E. Woodbine (ed), Bracton on the Laws and Customs of England vol 3 (Cambridge, Massachusetts:
Belknap Press, S. E. Thorne trans, 1977).
27 ibid at 50.

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 Kelvin F. K. Low

cannot be known or determined in how long a time they may be raised, in how
many years, as [may be done in the case] above of ‘so many harvests,’ [where] a term
certain may be fixed, since each harvest has its year, one in each. (Emphasis added.)

The language is not self-evidently demonstrative of a rule of law. In Littleton,28

the ‘rule’ is discussed in the chapter ‘Estates Upon Condition’. It appears that the
passage quoted by Lord Neuberger29 was once translated by Coke from the
original French as:30

[I]f an abbot make a lease to a man for yeares, to have and to hold to him during the
time that the lessor is abbot; in this case the lessee hath an estate for the term of his
own life: but this is upon condition in law, scilicet, That if the abbot resigne or be
deposed, that then it shall be lawfull for his successor to enter. (Emphasis added.)

This would prove, however, to be a problematic translation. Ritso comments

that the emphasised words ‘are an interpolation, and involve a contradiction in
terms.’31 In a revised and corrected edition of Coke, Hargrave and Butler remark
that ‘it is observable that the original French does not warrant the insertion, in the
translation, of the words in question’.32 The emphasised words are omitted in the
edition of Littleton edited by Wambaugh in 190333 nor do they appear in Lord
Neuberger’s quote from Littleton but it is not Coke’s mistranslation34 that is
instructive but Ritso’s criticism of the mistranslation. It demonstrates that the rule
was not regarded as one applicable where the conceived grant was that of a term
of years.
The reference to Coke by Lord Neuberger likewise does not support their
Lordships’ conclusion.The passage referred to by his Lordship provides:35

If a man grant an estate to a woman dum sola fuit, or durante viduitate, or quamdiu se
bene gesserit, or to a man and a woman during the coverture, or as long as the grantee
dwell in such a house, or so long as he pay s l. & c. or until the grantee be promoted
to a benefice, or for any like incertaine time, which time, as Bracton saith, is tempus
indeterminatum: in all these cases, if it be of lands or tenements, the lessee hath in
judgment of law an estate for life determinable, if livery be made.

The passage appears in the chapter ‘Of Tenant for life’ and can readily be read to
simply mean that such a grant of a freehold estate in such a form creates a
determinable life estate rather than some other sort of freehold estate such as a

28 T. E. Tomlins (ed), Lyttleton, His Treatise of Tenures book 3 (London: S. Sweet, 1481; reprinted Clark,
New Jersey:The Lawbook Exchange, 2006) 382.
29 n 6 above at [39].
30 F. Hargrave and C. Butler (eds), Coke, Commentary Upon Littleton vol 2 (London: J. & W.T. Clarke;
R. Pheney; and S. Brooke, 18th ed, 1823) s 382.
31 F. Ritso, The Science of the Law (London:W. Clarke and Sons, 1815) 112.
32 Hargrave and Butler (eds), n 30 above, s 382, n (B).
33 E. Wambaugh (ed), Littleton’s Tenures book 3 (Washington: John Byrne & Co, E. Coke trans, 1903)
s 382.
34 This is not Coke’s translation strictly speaking but appears to be a translation by ‘some early and
rather unscholarly translator’ but ‘adopted by Coke’: see Wambaugh (ed), ibid, v-vi.
35 Hargrave and Butler (eds), n 30 above, s 56.

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determinable fee simple or a life estate subject to a condition subsequent. This

would also explain why the same ‘rule’ appears in Littleton in the chapter ‘Estates
Upon Condition’. Indeed, the reference to the grant of an estate ‘of lands or
tenements’ may also be regarded by some as suggesting that the rule is not
intended to apply to leaseholds. Even as late as 1890, it was disputed that a term
of years could be regarded as a tenement.36
It is true that Sheppard’s reference to the rule in The Touchstone of Common
Assurances37 appears in his chapter ‘Of a Lease’, suggesting that the rule is perhaps
applicable to leases void for failure to comply with the common law’s strict
requirement of certainty. However, it is said that such uncertain leases may be
regarded as determinable life estates rather than void terms of years only if there
had been livery of seisin. As a ‘rule’ to save leaseholds of uncertain duration, it
must be of dubious value. Leasehold tenants never had seisin. If one were minded
to grant a term of years, it would be most peculiar to do so by livery of seisin.At
the time of Sheppard’s writing, as a result of the enactment of the Statute of
Enrolments 1535, even freeholders avoided livery of seisin as a means of con-
veying their estates, preferring instead the device of lease (of a term of years) and
release.The lease and release remained the popular means of conveying a freehold
estate until 1841 when an Act of Parliament authorised conveyance by release (by
deed) alone.38 It is not inconceivable to envisage that by this point the rule had
metamorphosed into a rule of construction in an age where the intellectual
baggage associated with construction had yet to be mostly discarded.39 We are still
today familiar with the maxim ut res magis valeat quam pereat. Between the
application of the maxim and the unlikelihood that a term of years would have
been granted by livery of seisin, such a rule would have been entirely sensible.
Nor does the citation of Williams’ seminal pre-1925 work40 provide convincing
support for their Lordships’ conclusion.The quote by Lord Dyson41 is taken from
the chapter ‘Of An Estate For Life’ and much like the reference to Coke, it may
simply be a means of determining whether such grants create determinable life
estates as opposed to a determinable fee simple or a life estate subject to a
condition subsequent. It does not purport to lay down a rule of law whereby,
parties clearly intending to create a leasehold estate of uncertain duration, they
will nevertheless be regarded by the law as instead creating a freehold life estate.
This is confirmed by the cross-referencing in the text42 cited by his Lordship to
the author’s chapter on ‘Of An Estate In Fee Simple’ rather than his later chapter
‘Of A Term Of Years’. The ‘rule’ also appears to have been treated as one of
construction by all the modern authorities.43

36 H.W. Challis, ‘Are Leaseholds Tenements?’ (1890) 6 LQR 69.

37 W. Sheppard, TheTouchstone of Common Assurances vol 2 (London: Samuel Brooke, 8th ed, 1826) 275.
38 4 & 5 Vict, c 21.
39 Cf Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, 912 per
Lord Hoffmann.
40 T. C. Williams (ed), J.Williams’ Law of Real Property (London: Sweet & Maxwell, 23rd ed, 1920) 135.
41 n 6 above at [116].
42 Williams (ed), n 40 above, 135, nn r and s.
43 See, eg, Kusel v Watson (1879) 11 Ch D 129; Zimbler v Abrahams [1903] 1 KB 577 and Lace v Chantler
[1944] 1 KB 368.

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 Kelvin F. K. Low

Yet even as a rule of construction, the rule would not be justifiable merely by
the maxim ut res magis valeat quam pereat if there were not also livery of seisin to
emphasise that a freehold estate was likely intended by the grantor. Despite
suggestions that leasehold estates are separated from freehold estates merely by
accident of history, important distinctions remain. Leasehold covenants more
effectively bind successors-in-title than freehold covenants.The latter only bind
successors-in-title if they are substantively negative44 whereas positive leasehold
covenants can also bind successors-in-title.45 By sections 2(1) and 3(1) of the
Landlord and Tenant (Covenants) Act 1995, the requirement that a covenant
touch and concern land before it can bind successors-in-title, which used to be
common to both species of covenants, is no longer necessary for leasehold
covenants.Thus, if the maxim ut res magis valeat quam pereat were simply applied
when the parties’ intentions were otherwise clear that a leasehold estate was
intended to presume that the parties intended a freehold, some covenants which
parties intended to bind their successors-in-title may turn out to be ineffectual as
against them.This would run contrary to modern rules of construction.As a rule
of law, it would simply replace one set of consequences contrary to the parties’
autonomous bargain with another set of such consequences. It is not obvious that
the parties’ intentions as to the duration of the lease are more obviously worth
preserving than their intentions that their successors be bound. Even if one can
confidently hold that view, the transmogrification process does not actually
preserve the parties’ bargain anyway.
It is possible that their Lordships believed that these difficulties would be
avoided by the re-transmogrifying effects of section 149(6) of the Law of
Property Act 1925 by which freehold life estates are statutorily re-transmogrified
into 90-year determinable leasehold estates. However, it is not self-evident that
section 149(6) of the Law of Property Act 1925 has this curative effect. Section
149(6) is no doubt intended to preserve the validity of freehold life estates in
some form after their abolition by section 1 of the same Act. If this is the case,
then covenants which were not efficacious as against successors-in-title as
freehold covenants ought not to be magically transformed into efficacious cov-
enants as determined by the very different rules relating to leasehold covenants.
This is especially so given that section 149(6) applies to all such leases ‘made
before or after the commencement of this Act’. If this is correct, then some at
least of Ms Berrisford’s and Mexfield’s intended leasehold covenants (such as
those, if any, relating to repairs)46 will not survive the process of transmogrification
from leasehold to freehold and re-transmogrification from freehold back to
leasehold, at least not as against assignees. That can hardly be regarded as satis-
factory. Nor does section 149(6) of the Law of Property Act 1925 apply where
the lease is not granted at a rent or in consideration of a fine. In such a case,
presumably the ‘rule’ is ineffectual since there seems little point transforming a
lease invalid for being of uncertain duration into an invalid freehold life estate.47

44 See eg Rhone v Stephens [1994] 2 AC 310.

45 See eg Williams v Earle (1868) LR 3 QB 739.
46 Contra Williams v Earle ibid.
47 Law of Property Act 1925, s 1.

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The characterisation of this rule as one of law rather than construction also
raises the possibility that other similar rules may be so characterised, particularly
in light of modern attitudes towards interpretation. For example, the rule in
Parker v Taswell48 that a failed grant of a lease may be regarded as an agreement
to grant a lease, sits somewhat uneasily with the modern approach to construc-
tion since it presupposes that the court has first determined that the parties
intended a grant of a lease, which having failed as such because of non-
compliance with formalities, may nevertheless be regarded as an agreement to
grant a lease.As a rule of law, this difficulty is averted. However, the question must
surely be asked where the limits of the courts’ jurisdiction to rescue failed
transactions lie. It surely cannot be suggested that leases are especially deserving
of rescue over other transactions.
Finally, the efficacy of the solution may also be imperilled by the compul-
sory registration scheme envisaged by the Land Registration Act 2002, at
least in the context of periodic leases. If registration is to be a necessary for-
mality in the future, then Lord Neuberger’s remark that ‘[s]uch formalities have
now largely been done away with’49 would no longer hold true. It is highly
unlikely that periodic leases would be registrable lest they clutter the register.
Yet unless they are registered, the rule may not apply to transmogrify the
invalid periodic lease into a valid life estate upon which section 149(6) of the
Law of Property Act 1925 can apply to re-transmogrify back into a determin-
able 90-year lease.
Even assuming the first stage of this process is properly to be regarded as a rule
of law and the process of re-transmogrification may well be deemed to prevent
the invalidation of some leasehold covenants, their Lordship’s preferred solution
is nevertheless not universally applicable and hence arguably undesirable. It is
conceded by their Lordships that this solution is unavailable to corporate tenants
since life estates may not be granted to corporations so that the same lease would
not be rescued by the rule of transmogrification from uncertain leasehold to
freehold and re-transmogrification back to certain leasehold.50 Nor is it available
where the uncertain lease takes the form of a sublease since one cannot carve a
freehold estate out of a leasehold estate.51

THE MOCK LICENCE’S STORY

Once,Alice was told, the Mock Turtle was a real turtle.52 According to Berrisford v
Mexfield, if a lease of uncertain duration may not be rescued by the aforemen-
tioned process of transmogrification and re-transmogrification, then it may
nevertheless take refuge from the rule on certainty of duration by pretending to be
a mock licence.Although concurring in the 90-year rule solution, Lord Mance53

48 (1858) 2 De G & J 559.

49 n 6 above at [41].
50 ibid at [92] per Lady Hale.
51 ibid at [43] per Lord Neuberger. See also Kusel v Watson n 43 above.
52 L. Carroll, Alice’s Adventures in Wonderland n 1 above, ch 9 ‘The Mock Turtle’s Story’.
53 ibid at [99]–[102].

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 Kelvin F. K. Low

and Lord Clarke54 appear to have favoured this second argument,which also found
some favour with Lord Neuberger.55 However,Lady Hale regarded this solution as
‘even more bizarre’ than the first,56 which she had already considered ‘curiouser
and curiouser’.57
If this solution were elevated to a solution of first resort, it would have the
benefit at least of universal application. Whenever anyone, freeholder or lease-
holder, purported to grant a lease of uncertain duration, then the grantee,
whether corporation or individual, would always only get a licence. Alas, as an
alternative solution, it lacks even the elegance of universality. Some of their
Lordships suggest that a mock licence better reflected the parties’ intentions than
the orthodoxy, which would imply a periodic lease as between the parties
without any contractually agreed but legally offensive fetter. As such, it accords
better with ordinary principles of construction. Such a conclusion is surely
questionable. In theory, the rights of a tenant could not be more distinct from
those of a licensee. A tenant acquires rights of exclusive possession.58 A licensee
does not, since a licence is a mere permission which makes it lawful for the
licensee to do what would otherwise be a trespass.59 If this distinction were
strictly held, then the use of the device of a mock licence to rescue a failed lease
would surely be absurd since the parties did not intend mere permissive use. In
truth, the line between a lease and a licence is far from precise.Thus, the courts
have conceived of the possibility that some licensees may acquire sufficient
possessory rights to bring actions in trespass60 or nuisance.61 However, the ability
of such licensees to bring such actions against their licensors’ successors-in-title
has never been tested and it may not be desirable to further blur the line between
tenants and licensees by permitting such actions. Moreover, even if such claims
in tort are permitted both as against complete strangers and their licensors’
successors-in-title, it surely cannot be envisaged that the binding effect of lease-
hold covenants would be replicated for such licensees. Even if it were not a
concern in Berrisford v Mexfield,62 there must surely be many cases of leases of
uncertain duration where the parties expected their rights to persist against the
successors-in-title of their counterparties.
This is not to suggest that the orthodox solution reflects the parties’ intentions
well. The lease implied by the orthodox view is as much a fiction as the
quasi-contractual promise to repay a mistaken payment.The orthodox solution

54 ibid at [107]–[110].
55 ibid at [58]–[68].
56 ibid at [95].
57 ibid at [93].
58 Street v Mountford [1985] AC 809.
59 Thomas v Sorrell (1673) Vaugh 330, 351.
60 See, eg, Hounslow LBC v Twickenham Garden Developments Ltd [1971] Ch 233, 257 per Megarry J;
Manchester Airport plc v Dutton [2000] QB 133.
61 See, eg, Newcastle-under-Lyme Corporation v Wolstanton Ltd [1947] Ch 92, 106–108 per Evershed J;
Hunter v Canary Wharf Ltd [1997] AC 655, 688, 692 per Lord Goff of Chieveley and 717 per Lord
Cooke of Thorndon.
62 Particularly owing to the non-assignment clause (clause 6(c)) on the part of Ms Berrisford: see
[2011] UKSC 52 at [44] per Lord Neuberger. However, it must be noted that there is no similar
clause on the part of Mexfield.

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(2012) 75(3) MLR 387–436 409
Certainty of Terms and Leases

was fashioned before the law of unjust enrichment was recognised, much less
mature, though even today it is not obvious that a restitutionary solution is
obviously superior given the proprietary nature of the lease.

EXPLOITING AN IDENTITY CRISIS

At one point in her adventures, Alice suffers from a particularly serious case of
an identity crisis.63 Like Alice, the lease at common law suffers from an identity
crisis – is it a contract or a property right?64 This identity crisis can cause no
small degree of discomfort among lawyers trying to make sense of the rules. For
example, it appears as if a lease may be determined by such contractual doc-
trines as frustration65 and repudiatory breach.66 Yet its determination as a vested
estate has never been satisfactorily explained. Neither frustration nor repudia-
tory breach has the effect of divesting vested property rights. The cases seem
explicable only on the basis that a landlord’s grant to the tenant of the latter’s
leasehold estate is somehow in a perpetually executory state even where the
lease is a fixed term lease, simply because rent is payable periodically, which
cannot be correct.
However, paradoxically, this identity crisis provides us with arguably the most
principled solution to the problem of grants of leases of uncertain duration.
Unfortunately not considered by their Lordships, a glimpse of this argument may
be derived from Wilson LJ’s judgment in the Court of Appeal. There, Mr
Wonnacott argued that although Prudential Assurance had the effect of negating
the offending clause at common law, nevertheless equity could intervene to
prevent Mexfield, as an immediate party to the tenancy agreement, from seeking
possession as against Ms Berrisford, another immediate party to the tenancy
agreement.67 Prudential Assurance involved a dispute between the landlord and the
tenant’s successor-in-title and may thus be regarded as inapplicable to disputes
between the immediate parties to the lease. Whatever the reasons may be for
excluding leases of uncertain duration from the numerus clausus of property rights
recognised by the common law, there is little reason to disregard their agreement
inter partes. It is surely possible for parties to agree a periodic lease with no
offensive fetters and then separately agree by way of contract that either or both
were not to exercise their rights to determine the lease except upon fulfilment of
certain conditions. Should it matter then that the parties’ collateral agreement is
contained within the same document as the lease? Scots law appears to reach the
same result according to Lord Hope.68 Nor is the treating of a failed or unen-
forceable grant of a lease as a valid contract particularly innovative given the

63 L Carroll, Alice’s Adventures in Wonderland n 1 above, ch 5 ‘Advice from a Caterpillar’.

64 See, eg, S. Bridge,‘Leases – Contract, Property and Status’ in L. Tee (ed), Land Law: Issues, Debates,
Policy (Devon:Willan Publishing, 2002) 98.
65 See, eg, National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675.
66 See, eg, Progressive Mailing House Proprietary Ltd v Tabali Proprietary Ltd (1985) 157 CLR 17;
Hussein v Mehlman [1992] 2 EGLR 87; Tan Soo Leng David v Lim Thian Chai Charles [1998]
1 SLR(R) 880.
67 n 9 above at [16].
68 n 6 above at [74]–[80] per Lord Hope.

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410 (2012) 75(3) MLR 387–436
 Kelvin F. K. Low

familiar rule in Parker v Taswell.69 It may be that Mr Wonnacott’s invocation of

equity at the Court of Appeal was unnecessary given that it was Mexfield that was
seeking possession. If Mexfield were to be bound by contract, then Ms Berrisford
surely need not rely on equity to remain in the property. After all, ‘[a]n unac-
cepted repudiation is a thing writ in water’.70 Ms Berrisford would only have had
to resort to equity’s auxiliary jurisdiction had she been unlawfully turned out and
had herself sought possession as against Mexfield.

PEERING THROUGH THE LOOKING GLASS

For those tantalised by the decision in the Court of Appeal, the Supreme
Court’s decision would likely be viewed with some disappointment. As a solu-
tion, the dual transmogrification exercise will not be available where the grant
is made by a leaseholder, where the grantee is a corporation, or where the grant
is made to a volunteer. In any of the latter three instances, it is a matter of some
uncertainty whether the purported lease would be treated by the law as a
licence or whether the orthodox solution of an unfettered periodic tenancy
taking hold upon the tenant taking possession would prevail. This dual (or
potentially triple)71 solution approach to what parties otherwise intend as the
same type of transaction, a leasehold grant of uncertain duration, is arguably
unnecessarily complex and pointlessly capricious. Even where the transmogri-
fication and re-transmogrification does take place, the efficacy of originally
intended leasehold covenants which would not be efficacious as freehold cov-
enants following the two stage process remains an unanswered question. There
is thus uncertainty both as to the efficacy of the licence solution where the
dual transmogrification exercise is unavailable and the efficacy of the dual
transmogrification solution where either the lease or the reversion has been
assigned. It is also unclear whether the solution preferred by their Lordships will
survive the introduction of compulsory registration as envisaged by the Land
Registration Act 2002.The disappointment is particularly acute since, whatever
its imperfections, the solution in Scots law seems far simpler and more elegant.
Such a solution could readily have been reached by exploiting the dual natures
of the lease.
This critical study of Berrisford v Mexfield also demonstrates that, whatever the
criticisms of the rule of certainty of terms for leases, the divide between freehold
and leasehold estates remains worth defending. Freehold estates are not kept apart
from leasehold estates purely by accident of history. Their very natures remain
distinct. Leasehold covenants more readily bind successors-in-title than freehold
covenants, particularly following the intervention of the Landlord and Tenant
(Covenants) Act 1995. An abolition of the rule of certainty of terms for leases
would thus not simply blur the line between leasehold and freehold estates. It
would effectively undo our entire learning on restrictive covenants since the

69 (1858) 2 De G & J 559.

70 Howard v Pickford Tool Co Ltd [1951] 1 KB 417, 421 per Asquith LJ.
71 If the licence solution prevails in some instances where dual transmogrification is not possible but
not in others.

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(2012) 75(3) MLR 387–436 411
Rectifying the Course of Rectification

device of a perpetual lease could then be used to create binding positive

covenants which need not even touch and concern land.72 Should that occur,
English common law would be the first legal system to come close to effectively
abolishing the numerus clausus principle and permit parties freedom to create
almost any proprietary ‘fancy’ of their choosing.73 Furthermore, apart from
effectively contradicting the raison d’etre of the Law of Property Act 1925, an
abolition of the rule would permit the creation of a perpetual lease with a rent
obligation, effectively circumventing the Rentcharges Act 1977.

Rectifying the Course of Rectification

Paul S. Davies*
In Daventry District Council v Daventry & District Housing Ltd [2011] EWCA Civ 1153, the majority
of the Court of Appeal held that a contract should be rectified because of a common mistake.
This note discusses that decision and recent developments in the law of rectification. It
is argued that the approach of the majority in Daventry is unsatisfactory, and that an emphasis
upon ascertaining whether the parties have objectively made a common mistake may be inappro-
priate: rectification should only be granted in order to reflect the parties’ subjective intentions.
Such an approach might help to distinguish common mistake rectification from unilateral mistake
rectification.

INTRODUCTION

In Chartbrook Ltd v Persimmon Homes Ltd,1 (Chartbrook) Lord Hoffmann, in his

final speech before retirement, considered a variety of issues concerning the
interpretation and rectification of commercial contracts. However, important
areas of uncertainty remain.As Sir Richard Buxton has observed,‘[m]uch is thus
left in the air, not only with regard to the relationship between construction and
rectification, but also within the jurisprudence of rectification itself.’2 There are
three main difficulties. First, what is the scope afforded to rectification? The more
‘liberal’ approach to the interpretation of commercial agreements, driven in no
small part by Lord Hoffmann himself,3 means that many mistakes are now

72 Whilst there are concerns over the efficacy of the current regime, such a development would be
significantly more drastic than the recommendations of the Law Commission in its report Making
Land Work: Easements, Covenants and Profits à Prendre, Report, Law Com No 327 (2011). See
particularly 5.44–5.70.
73 Cf B. Rudden, n 18 above, 239.

*Fellow, Gonville and Caius College, Cambridge. I am grateful to Neil Andrews, Richard Hooley, Janet
O’Sullivan and an anonymous referee.The usual disclaimers apply.
1 [2009] UKHL 38; [2009] 1 AC 1101. For notes of the case, see D. McLaughlin, (2010) 126 LQR
10; J. O’Sullivan, (2009) 68 CLJ 510; P. Davies, (2009) LMCLQ 420.
2 Sir R. Buxton, ‘ “Construction” and rectification after Chartbrook’ (2010) CLJ 253, 261.
3 See eg Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896;
Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38; [2009] 3 WLR 267.

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412 (2012) 75(3) MLR 387–436
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