This case was seen by the Court of the Exchequer. It concerned the validity of property rights and the differences between a property right and a personal right.
Basingstoke Canal Navigation made a contractual promise to Mr Hill that he would have the exclusive right to run pleasure boats on the canal and to hire them out to customers. However, Tupper also lent out boats on the canal. Hill claimed this violated his exclusive right and sued.
The issue of this case was whether the plaintiff’s contractual agreement could be a property right, which would then allow him to prevent the defendant from conducting business on the canal.
But it was held that Hill only possessed a license to use the canal, this being a right in personam, not a right in rem. As a result, he could not exclude third parties himself as his right was only effective against Basingstoke Canal Navigation with whom he made the contractual deal. Crucially, Hill attempted to claim that the license in this case allowed him to exclude third parties per the contract. But this is not the nature of a license as it is only a right in personam. Per the Numerus Clausus principle, the nature of a license could not be changed. Therefore, Hill’s claim failed.
This elucidates the Numerus Clausus principle, this being a closed list of property rights. Property rights are valuable as you can exclude third parties, and following this case no further types of property rights may be created. This makes the distinction between rights in rem and rights in personam all the more prevalent, only a few rights being capable of excluding third parties. The rationale behind this principle is to preserve the value of property rights, and prevent confusion and uncertainty following a constant expansion of available rights in rem.
- Court of the Exchequer  – Decision Approved
- Defining Property Rights
- Section 1 Law of Property Act 1925
- Keppell v. Bailey 
- Hunter and Ors v. Canary Wharf 
Reviewed By Ross Birkbeck
Submitted By Louis Stripp
First Published 12th July 2021