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Re Midland Railway Agreement 1971

27. “Our instinct. as far as possible, it is necessary to give effect to the agreement concluded by the parties. [We] see no reason why an explicit limitation of the power of disposition that the Common Law would confer on the lessor should be rejected as repugnant to the nature of the inheritance interest granted,” [1971] 1 Ch 725 at 733. While Lord Templeman seemed satisfied with the outcome of the prudential decision, Lord Browne-Wilkinson did not share his view. He said the outcome of the case was “unsatisfactory” and did not comply with the parties` agreement. He said: “No one has provided a satisfactory justification for the emergence of this rule. No one was able to draw attention to a useful purpose it serves today” and he asked the Commission to consider whether the rule should continue to operate in English law. 3. Re Midland Railway Company`s Agreement [1971] I Ch 725 and Ashburn Anrtalt v Arnold [1988] 2 All 147 are expressly repealed; Breams Property Investment vs. Strougler [1948] 2 KB 1 and Eker vs. Becker (1946) 174 LT 410 contradict the decision. 60.

Re Midland Railway Company`s Agreement [1971] 1 Ch 725 at 732 Counsel for the defendants:In Re Midland Railway Company`s Agreement, [1971] Chap. 732–33. In 1930, London County Council leased a strip of land to Mr Nathan for £30 a year through a sale and lease-back agreement. The agreement stated that the lease was to be maintained until the Council needed the country to widen the roads. Nathan had the right to build temporary one-story buildings in the countryside. The agreement was supposed to be temporary, but the road widening program never saw the light of day and the crew lasted more than 60 years. During this period, the benefit of the agreement was transferred to Prudential Assurance and the London Residuary Body took the liberty of stopping, but they had no power to build roads. Prudential Insurance still paid £30 a year, whereas at that time the market rent would have been £10,000 a year. For the Tribunal, the question arose as to whether the contract actually justified a lease. 45.

Although Russell LJ addressed the issue from a contractual point of view in Re Midland Railway [1971] 1 Ch 725, it seems unfair to keep the lessor in the original agreement and the rent of only £l. While asking LJ whether there was any justification for extending the principle of land law to deny the effectiveness of the agreement, it did not specify whether there were other reasons (such as the unfairness of the activity over time) for breaching the contractual agreement. . . .

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