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THE MANCHESTER SHIP CANAL COMPANY LTD v VAUXHALL MOTORS LTD (FORMERLY GENERAL MOTORS UK LTD)

Construction Law Reporter

THE MANCHESTER SHIP CANAL COMPANY LTD v VAUXHALL MOTORS LTD (FORMERLY GENERAL MOTORS UK LTD)

Relief from forfeiture – Scope of the jurisdiction – Whether it extends to possessory interests in land

The principal issue before the Supreme Court was whether the court had jurisdiction to grant Vauxhall Motors UK Ltd relief from forfeiture in respect of the loss of the right to make specified use of neighbouring land granted by the Manchester Ship Canal Company Ltd in a perpetual licence, where the loss of use was occasioned by the exercise of a right to terminate the licence for breach of an obligation to pay a sum due under the licence. On the facts of the case the sum which Vauxhall failed to pay was £50, whereas the annual value of the rights which would be lost upon termination was agreed to be in excess of £300,000. The judge at first instance granted to Vauxhall relief from forfeiture on the ground that the rights conferred on Vauxhall under the licence were, if not strictly speaking possessory, sufficiently analogous to possessory right to bring the jurisdiction to grant relief from forfeiture into play. The Court of Appeal affirmed that decision, although it held that the rights of Vauxhall were possessory so that the jurisdiction was on that basis engaged. In its appeal to the Supreme Court it was submitted on behalf of the Manchester Ship Canal Company Ltd that the jurisdiction to grant relief from forfeiture of rights relating to land was limited to rights which amounted to a proprietary interest with the consequence that mere possessory rights were insufficient to trigger the operation of the jurisdiction. On this basis it was submitted that licences fell outside of the jurisdiction so that Vauxhall had no entitlement to invoke the jurisdiction.

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