Prescription: use as of right
Welford v Graham [2017] was a case about a claim to a prescriptive right of way over a yard (the Yard) by the owners of the neighboring workshop (the Workshop). A prescriptive right of way arises if use is "as of right" meaning it is used openly, without force and without consent.
The current owner of the Workshop asserted that they had acquired a prescriptive right of way in 2012. But there was no evidence to confirm whether prior owners of the Yard had granted the owners and occupiers of the Workshop permission to use the Yard.
The current owners of the Workshop argued that it was not necessary to show proof of the absence of permission for the use of the Yard. They accepted that a claimant must prove that the use relied on was “as of right”, but claimed that if the right is exercised for the requisite period then there was a rebuttable presumption that an easement had been enjoyed “as of right” – and without anyone’s permission. A servient owner can, of course, provide evidence to the contrary, in order to rebut that presumption, in which case, the court must then make up its own mind.
The Upper Tribunal considered that the existence of this evidential presumption was supported by the authorities and made good sense.
The owners of the Workshop had offered the tribunal evidence that the Yard had been used openly and without interruption for a sufficient period of time – and the owners of the Yard had not provided any evidence that rebutted this. It followed that the claimants had shown relevant use, as of right, for the requisite period, and they were therefore entitled to a vehicular right of way for the benefit of the Workshop.
This decision is useful, particularly where the claimant is relying on use by predecessors in title as it could be difficult to find out if there had been consent for that use. Now the claimant can simply rely on the presumption unless there is evidence to the contrary.
Developer avoids injunction for obstruction of a right of way
The facts of Lea v Ward [2017] were straightforward. Mr Lea's property had the benefit of a right of way over the neighbouring land by virtue of a deed of gift granted in 1979.
As a result of development works on the neighbouring land Mr Lea's right of way was obstructed by the erection of temporary fencing. The Court had to decide whether there had been any substantial interference with the right of way and, if so, what remedies should be available.
It was possible for Mr Lea to physically move the temporary fencing when he needed to use the track, but even so the fencing completely blocked Mr Lea's right of way and the court agreed that this was a substantial interference with the use of the right of way.
The test for 'substantial interference' was satisfied: it was entirely reasonable for Mr Lea to insist on being able to use the right of way and it was clear that the right of way could not be substantially and practically exercised as conveniently as before the fencing was put up.
However, the court held that Mr Lea was entitled to nominal damages of only £5. This was because the practical effect of the interference was very limited. The court emphasised that the purpose of damages is to compensate an injured party for its loss and is not meant to punish the offending party.
However Mr Lea had an additional basis for his claim and this could have caused a major headache for the developer of the adjoining land.
To accommodate the development the developer had altered the route of the right of way from that which existed at the time of grant in 1979.
It is established law that a servient landowner has no right to alter the route of a right of way without the beneficiary's agreement, unless that is an express or implied term of the grant. In this case, there was no such provision in the deed of grant. Accordingly, even though an alternative route had been provided, Mr Lea succeeded in his claim that the variation of the right of way was a substantial interference.
Although Mr Lea succeeded in his claim, the court said the provision of an alternative route was relevant to the consideration of what remedy should be granted and, in particular, whether an injunction might be appropriate.
An injunction is a discretionary remedy. In deciding whether the facts warranted injunctive relief, the court took into account that an altered route had been made available and the behaviour of each party towards the other.
The court concluded that so long as the developer removed the fencing obstructing the right of way and granted a new easement over the alternative route to Mr Lea, it would not grant an injunction.
As to the damages in lieu of an injunction, the court found that the degree of interference with the easement was short-lived and so only modest damages of £500 were awarded to Mr Lea.
The developer was fortunate in this case to be able to argue its way out of an injunction. Because injunctions are a discretionary remedy, there can be considerable delay and uncertainty while the matter is resolved through court proceedings Developers need to be wary of interfering with easements, which can affect the marketability of a development and their ability to finance or refinance it. Their best course would usually be to negotiate the extinguishment or variation of an easement by express agreement.
A tenant is prevented from releasing a right of light by its landlord
A recent rights of light case is particularly interesting because it does not involve an action against a developer for infringement of a right of light. Instead a tenant was seeking a declaration that it was entitled to release its right of light (in exchange for a monetary payment) without being in breach of the terms of its lease.
In Metropolitan Housing Trust Limited v RMC FH Co Limited [2017] both the freeholder and the headlessee of a block of flats asserted that a neighbouring development would give rise an actionable interference with the enjoyment of light to the block of flats.
The headlessee had agreed with the developer to release its right of light but the freeholder objected on the basis that the terms of the lease prevented the headlessee from doing so.
The freeholder relied on the tenant covenant at clause 3(12) of the lease which said:
"(12) Encroachment
Not to give permission for any new window light opening doorway path passage drain or other encroachment to be made…….upon or against the demised premises which might be or grow to the damage annoyance or inconvenience of the landlord….."
It was not in dispute between the parties that they had both acquired a right of light (after the headlease was granted) by virtue of section 3 of the Prescription Act 1832.
This led the judge to consider the key question, where the right of light which is asserted is claimed pursuant to section 3: does section 3 bring into existence two rights of light, one appurtenant to the freehold and one appurtenant to the lease for the term of the lease? The judge concluded that the right of light acquired under section 3 is a right appurtenant to the freehold and which is treated asdemised to the tenant under the lease and is therefore part of the demised premises (even though the right of light was a acquired after the lease was granted).
On that basis the freeholder argued that by releasing its right of light the headlessee was permitting the developer to interfere with the right of light and as such this would be an "encroachment" upon or against the demised premises in breach of clause 3(12) of the lease.
The judge applied the ordinary meaning of "encroachment" and held that there was no reason to cut down the meaning so there had to be some form of physical entry on the land demised. Therefore an actionable interference with a right of light would be an encroachment upon or against the demised premises. However the headlessee was only prevented by clause 3(12) from permitting such an encroachment if it "might be or grow to the damage annoyance or inconvenience of the landlord".
The headlessee argued that the freeholder was at liberty to bring its own action for a declaration from the court that it had acquired a prescriptive right of light under section 3. However this could be a costly exercise and most certainly would be an "inconvenience" to the landlord. More importantly the longer the interference continued the less likely the chances that the freeholder could obtain an injunction to remove the interference thereby damaging the freehold.
The judge therefore concluded that, on the basis that both parties agreed that the development would amount to a substantial interference with the right of light then it must follow that the development will involve an encroachment and a release by the headlessee would amount to a permission for such encroachment and a breach of clause 3(12).
So the court refused to give the headlessee its declaration that it was entitled to release its right of light However the judge did go on to say that, in his opinion, should the freeholder release its right of light, then headlessee could not possibly be in breach of the lease by releasing the right of light appurtenant to the headlease.
As a result of this decision it will be important to check the definition of demised premises in the lease and consider the implications of any "anti-encroachment" clause. Developers will also need to be sure that parties with whom they are negotiating a release are entitled to grant a release.
Easements: Can you unilaterally increase the dominant land?
The rule in Harris v Flower [1904] means that if you have an easement giving a right of way to access Plot A then you cannot use it to access Plot B. The recent Court of Appeal decision in Gore v Naheed [2017] illustrates the exception to this rule.
The property (known as "The Granary") enjoyed a right of way over a defined area (the yellow land) "for all purposes connected with the use and occupation of The Granary" granted by a 1921 conveyance.
The owners of The Granary had since acquired part of the yellow land by To quote Patton LJ : I do not accept that parking within the garage by a resident of The Granary should be treated as the use of the garage in its own right for a purpose independent of the use of the dominant tenement. It would, of course, be different if the garage were let to or used by a third party separately from the occupation of The Granary.adverse possession and had erected a garage on that land, adjacent to The Granary.
It was common ground between the parties that the easement entitled the claimant to drive a car or other vehicle to the front door of The Granary and to park there for the purposes of loading and unloading. What was in dispute was the right to use the driveway to obtain direct access to the garage next door and park in it. It was claimed by the defendants that to use the right of way for the purpose of parking in the garage was outside the scope of the easement because of the rule in Harris v Flower. .
At the trial, the judge made a declaration that the rights granted by the 1921 conveyance included the right for the claimant to pass over the driveway for the purpose of parking in the garage and granted an injunction to prevent the obstruction of vehicular access to the garage.
The Court of Appeal decided that Harris v Flower does prevent an easement being used for an additional plot of land UNLESS that land is used for a purpose that is purely subsidiary or ancillary to the use of the land that originally had the benefit of the right when the right was granted.
To quote Patton LJ : I do not accept that parking within the garage by a resident of The Granary should be treated as the use of the garage in its own right for a purpose independent of the use of the dominant tenement. It would, of course, be different if the garage were let to or used by a third party separately from the occupation of The Granary.
Whether the exception to the rule in Harris v Flower will apply will very much depend on the facts of the case so developers should still be mindful of the rule when assembling sites for development.
No loss damages for breach of an overage agreement.
In Burrows Investments Ltd v Ward Homes Ltd [2017] development land had been sold by Burrows Investments to Ward Homes Ltd. The sale agreement provided for Ward Homes to pay overage from the proceeds of sale of “Market Units” As is usual in overage agreements the drafting only allowed Ward Homes to make "Permitted Disposals".
One type of disposal which Ward Homes was permitted to make, was “the transfer … of land … for roads, footpaths, public open spaces or other social/community purposes." (a Community Disposal). Another was defined as: “a disposal by the Buyer … of one or more Individual Market Units … in the open market at arm's length by way of the sale of the freehold or long leasehold estate…" (a Residential Disposal).
Under a section 106 agreement, Ward Homes was required to sell five units of affordable housing to a registered social housing provider. Ward Homes completed the disposal of five residential units to AmicusHorizon on the basis that this fell within the definition of a Residential Disposal. However Burrows Investments disagreed with this interpretation and issued proceedings for a declaration that Ward Homes was in breach of contract and liable for damages.
At first instance the court decided that although the sale of the affordable units was not a Residential Disposal it fell within the definition of a Community Disposal and so was a Permitted Disposal. Burrows Investments appealed.
It was not in dispute that that even if the five units had been sold at market value no overage would have been payable as the price per square foot did not exceed the overage threshold. The Court of Appeal held that the sale of the affordable units was not a Permitted Disposal and so Ward Homes was in breach of contract.
Although Burrows Investments had suffered no loss the Court of Appeal decided that Burrows Investments was entitled to be compensated for the missed opportunity to negotiate a reasonable sum for releasing Ward Homes from its contractual obligations. These are often referred to as negotiation damages.
This case highlights to need to draft overage agreements carefully so that they do not prevent a developer from complying with the terms of a section 106 agreement, particularly in relation to the provision of affordable housing. It is also clear that the courts will look at the possibility of awarding negotiation damages where the innocent party has not suffered a loss in the conventional sense.
Launch of the Clean Growth Strategy.
The Government recently launched its Clean Growth Strategy which identifies energy efficiency as a priority. The intention is to get all private rented homes and social housing up to an EPC rating of "C" by 2030. This is part of low carbon vision for the UK.
The Industrial Strategy
The Government has published the Industrial Strategy which highlights Grand Challenges to put the UK at the forefront of industries of the future. The first 4 challenges to be tackled are artificial intelligence, clean growth, future of mobility and an ageing society.
