Archive for the ‘Abandonment’ Category

Does acceptance of an obligation to fence off access to an easement amount to abandonment>

April 21, 2018

In Annetts v Adeleye ([2018] EWCA Civ 555) the English Court of Appeal had to consider whether a dominant owner’s acceptance of an obligation to fence off access from the dominant tenement to the servient tenement amounted to the abandonment of a right of way.

The dominant tenement (‘the strip’) had formerly been part of a larger portion of land (‘Summerhill’) with the same right of way. The owner of Summerhill imposed the covenant on the sale of the strip to the owner of a neighbouring property.

The court also to consider whether the right of access from Summerhill over the strip to the servient tenement would revive if Summerhill and the strip were again to come into common ownership.

 

Abandonment of an easement

The relevant legal principles are to be found in Gale on Easements which was cited with approval in Dwyer v Westminster CC ([2014] 2 P & CR 7):

‘a. whether a person intends an abandonment is not a subjective question; it is always a question of fact to be ascertained from the surrounding circumstances whether the act amounts to an abandonment or was intended as such;

b. abandonment depends on the intention of the person alleged to be abandoning the right of way as perceived by the reasonable owner of the servient tenement; to establish abandonment of an easement the conduct of the dominant owner must have beensuch  as to make it clear that he had at the relevant time a firm intention that neither he nor any successor in title of his should thereafter make use of the easement;

c. abandonment is not to be lightly inferred; owners of property do not normally wish to divest themselves of it unless it is to their advantage to do so, notwithstanding that they may have no present use for it;

d. non-user is not by itself conclusive evidence that a private right is abandoned; the non-user must be considered with and may be explained by the surrounding circumstances.’ (Arden LJ at [8])

 

The fact that the owner of the dominant tenement had no need for the time being to use the right over the servient tenement would also suggest that the right of way had not been abandoned (Arden LJ at [9] citing Dyer).

The search is for the objective intention of the dominant owner as reasonably perceived by the servient owner (Arden LJ at [10]).

Given the principles mentioned above, the question is whether the hypothetical servient owner would have concluded that the right of way from the strip had been abandoned (Arden LJ at [37]). The issue has to be determined at the date of the transfer ([54]).

 
The hypothetical servient owner has some knowledge of the law; this person knows that covenants to erect a fence (being positive covenants) do not run with the land and would not bind a later owner of the strip ([48]).

 

Application to the covenant to fence off access to the servient tenement

Whether building a fence to block access to the right of way is an abandonment has to be considered on a case by case basis in the light of the above principles.

Abandonment ‘is not to be lightly inferred … Even a major obstruction does not necessarily result in abandonment of a right of way’ (Arden LJ at [49]).

It was relevant that the servient owner, who had the most to gain from an abandonment, was not a party to the covenant to build the fence (Arden LJ at [51]).

There was no abandonment.

 

If Summerhill and the strip came into common ownership would the right to cross the strip to get to the servient tenement revive?

It would (Arden LJ at [56]). The position is similar to that where the dominant and servient tenement come into common ownership (Arden LJ at [58]).

Michael Lower

 

 

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Compensation for land resumption: valuation where a restriction on use has been abandoned

December 19, 2017

In Cheermark Investment Ltd v Director of Lands ([2017] HKEC 2536 (CA)) the Court of Appeal had to consider appeals from the Director of Lands concerning the basis on which compensation was payable in respect of two shops, the ownership of which had been resumed by the Government.

The shops were held on Government Leases that included restrictions on use which were contravened by the use of the property as shops. The Lands Tribunal found that the Government had abandoned the restrictive covenant.

The Director of Lands appealed against this finding. The Director also argued that section 12 of the Lands Resumption Ordinance (‘LRO’) meant that any abandonment was irrelevant to the valuation exercise to be carried out. The compensation payable would be much lower if the valuation had to take account of the restrictive covenant.

The Government leases on which the shops were held contained a covenant that the lessee would not allow the land to be used other than for ‘dwelling houses workshops factories or godowns or similar purposes’ (‘the user covenant’).

The Court of Appeal (Kwan JA giving the main judgment), reversing the Lands Tribunal on this point, held that the use of the property as shops was a breach of the user covenant.

The Lands Tribunal found that the Government had abandoned the user covenant on the basis of ‘the open and notorious breaches over a lengthy period without enforcement action’. The Court of Appeal said that whether the facts are capable of establishing the abandonment of a covenant ‘is primarily a matter for the fact finding tribunal’ ([69]). There was no basis, in this case, to interfere with the Lands Tribunal’s judgment.

Did section 12 of the LRO mean that the abandonment was irrelevant when it came to calculating the compensation payable? The section provides, among other things, that, ‘no compensation shall be given in respect of any use of the land which is not in accordance with the terms of the Government lease under which the land is held’.

The use of the properties as shops was not in accordance with the terms of the Government lease unless the court could take account of the fact that the Government had abandoned the user covenant.

The owners were entitled to fair compensation following the resumption; this is the principle of equivalence which would operate even in the absence of article 105 of the Basic Law ([106]). Further, ‘the principle against doubtful penalisation imports a presumption against the imposition of a statutory detriment to a person’s property or other economic interests without clear language’ ([107]).

Through the abandonment, the Government had disposed of the right to enforce the restrictive covenant. It could no longer charge a premium for a change of use to that of a shop. The owners’ interest in the shop was to be valued in such a way as to reflect this: ‘compensation is required to be paid for the interest resumed’ ([108]).

Michael Lower

 

 

Sale of part of land: inferred easement and abandonment of an easement

July 25, 2012

Re Clarke ([2012] UKUT 226 (LC) was concerned with the valuation of the freehold of property to be acquired by the tenant under the Leasehold Enfranchisement Act 1967. The question was whether, for valuation purposes, the property was landlocked. The tenant held the property under the terms of a 400 year lease granted in 1641 (‘the lease’). The tenant also owned the freehold of property to the south. The lease included both the property in question (a house) and other land to the north of the house. The tenant under the lease had the benefit of rights of way over land further to the north but there was no visible track or path in existence.

In 1946, part of the lease (the part on which the property stood) was assigned to T and the freehold of land to the south (‘the pink land’) was conveyed to T. The land to the south had the benefit of a right of way over a track leading to the public highway. This express grant did not, however, benefit the property. As long as the property and the pink land were (as now) in common ownership there was no practical problem since the owner of the property could simply cross the pink land to access the public highway to the south of it. For the purposes of the valuation of the freehold of the property, however, this was irrelevant unless the property had a legal right of way.

The Tribunal found that there was no inferred right of way over the pink land and the track that crossed it. The most plausible argument was an easement of necessity but this failed because of the fact that the common ownership of the property and the pink land meant that the property did have the right to cross the pink land.

It was likely that, legally speaking, the property had the benefit of an easement over the rest of the leasehold land to the north. The fact that no use had been made of the rights of way to the north for over 50 years did not mean that there had been an abandonment. The non-use was explicable on the basis of the practical alternative access over the pink land to the south.

Nevertheless, the freehold should have been valued on the basis that it was landlocked. A buyer might face litigation if it tried to exercise rights over land to the north and there would be severe planning difficulties in the way of constructing a useable road.

Weekly review: 8 – 12 August

August 13, 2011

Land covenants: abandonment

Land covenants often impose restrictions on what can be built on land and the uses to which it can be put. Should a covenant created in the nineteenth century still govern the use of land today? This gives great weight to the intentions of the long-dead parties to the deed. The character of the area and the pressures on the use of the land may have changed greatly. Thus in Attorney-General of Hong Kong v Fairfax Ltd, the Crown sought to enforce a restriction in an 1862 Crown Lease of land near the centre of Hong Kong (Hing Hon Road and Bonham Road). Since the 1950s high-rise, high-density development had been the norm in the area. Nevertheless, in the 1990s, the Crown still sought to enforce a covenant that allowed only the building of ‘villa residences’, The Crown’s acquiescence over many years in other obvious breaches of the same covenant persuaded the Privy Council that it had abandoned the covenant and was no longer entitled to enforce it.

Gray and Gray point out that although the Upper Tribunal (Lands Chamber) (formerly the Lands Tribunal) in England has the power to discharge or modify restrictive covenants (Law of Property Act 1925, s. 84) it is often reluctant to do so. The covenants can often play a useful part in protecting ‘environmental amenity’ (Elements of Land Law, pp. 255 – 256). Property Prof Blog has a number of posts about the use of conservation easements in the US.

Land Covenants: who can benefit?

Privity of contract means that only the parties to a contract can enforce it. Section 26 of the Conveyancing and Property Ordinance provides a way of extending the range of parties to land covenants:

‘A person may take an immediate or other interest granted to him in respect of land or the benefit of any condition, right of entry, covenant or agreement granted to him over or in respect of land, although he may not be named as a party to the instrument.’

One practical use of this is as a way of passing the benefit of land covenants onto the owners of identified parcels of land (as one element of a building scheme). White v Bijou Mansions shows that the person relying on section 26 must show that he falls within ‘the scope and benefit’ of the covenant and not merely that enforcement would be useful to him. Section 26 does not abolish the law on privity and applies only to land (Beswick v Beswick).

Promissory estoppel

It is usually said that promissory estoppel is a sword and not a shield. The Australian High Court allowed it to be used as a cause of action in Walton’s Stores (Interstate) Ltd v Maher. More recently, the Hong Kong Court of Final Appeal seems to have done the same in Luo Xing Juan v Estate of Hui Shui See.

Proprietary estoppel

Sometimes the relevant promise or representation in a proprietary estoppel claim stands out a mile; there have been frequent public assurances. On other occasions, however, the evidence is not overwhelming but is sufficient. Suggitt v Suggitt is an example of the latter.

Vacant possession

A seller of land often agrees to sell with vacant possession. At the end of a lease, a tenant has to give back possession. The meaning of ‘vacant possession’ was considered again in NYK Logitics (UK) Ltd v Ibrend Estates BV.

Abandonment of covenant

August 11, 2011

Where a covenantee with knowledge of conduct inconsistent with the terms of the covenant acquiesces in that conduct for many years then it can lose its right to enforce the covenant.

In Attorney General of Hong Kong v Fairfax Ltd ([1997] HKLRD 243) F was the owner of part of the land (Inland Lot 757) comprised in a government lease. The lease prohibited the building of anything other than ‘villa residences’. Since 1957 a number of multi-storey buildings had been erected on other parts of Lot 757. It was now ‘a high density, high-rise area of apartment blocks’ (per Lord Browne-Wilkinson). Nevertheless, the Crown objected when F sought to build a high-rise apartment building on its land. It demanded a premium to release the covenant. The Privy Council agreed with Hong Kong’s Court of Appeal that the covenant had been abandoned because the Crown had for forty years allowed developments inconsistent with the covenant. Given the location and extent of the inconsistent construction the onus was on the Crown to show that it did not know of the breaches. The Crown could not conceivably argue that it was unaware of them.

Easement not abandoned where owner’s tenant blocked door

March 31, 2011

The intention to abandon an easement is not to be inferred lightly.

In Wong Kwan Yee v Incorporated Owners of Diamond Mansion ([2011] HKEC 315) the plaintiff owned commercial premises. The plaintiff had used a door from a lobby area into her premises for over forty years and acquired an easement through this long user. Her tenant bricked the door over in 2004. It was held that this non-use for a short period of time (compared with the forty year history of the door) did not amount to an abandonment of the easement. The Court referred to a statement in Gale on Easements to the effect that the intention to abandon an easement is not to be inferred lightly.