Posts Tagged ‘non derogation from grant’

Right of way: with vehicles or only pedestrian?

April 8, 2020

In The Dairy Farm Company Limited v Secretary for Justice ([2020] HKCFI 306), a 75 year Government lease of land in Pokfulam (‘the Lot’) to Dairy Farm contained a clause (‘SC20’) stating that: ‘“A right-of-way from Pokfulam Road to the new lot on a line to be approved by the Director of Public Works will be given.’ 

The question was whether the right of way was to be for vehicles or whether only pedestrian access was contemplated. Dairy Farm successfully sought an order requiring the Government to grant it a vehicular right of way.

This required the court (Hon. Wilson Chan J.) to apply the normal principles of contractual interpretation and to look at the words used in their documentary context and in the light of the relevant facts known to both parties at the time of the Grant (1958).

A number of contextual features combined to support Dairy Farm’s contention that the parties must be taken to have contemplated vehicular access:

  • the right of way was for access to domestic premises and so the grant was of a right of way for all purposes required for that use;
  •  SC20 entitled Dairy Farm to construct a ‘road or path’, suggesting both pedestrian and vehicular access was contemplated;
  •  SC20 required Dairy Farm to contribute to the cost of maintaining the road suggesting a type of use that might damage it; ([33])
  •  the right of way was intended to connect to the vehicular access on Pokfulam Road;
  •  pre- Grant correspondence between the parties suggested that the background was a plan to develop a network of roads in the area capable of accommodating vehicular access;
  •  the 75 year term militated against a restrictive interpetation;
  •  especially since vehicular access would be needed for the repair or rebuilding of any buildings on the Lot;
  •  the Lot was intended to be used to house senior staff of Dairy Farm (who were likely to have cars) ([35] – [36]).

Hon Wilson Chan J. decided that the Government’s refusal to grant a vehicular right of way was a breach of SC20 ([72]) and, since it rendered the land practically unusable, a derogation from grant ([73]). The Government was ordered to grant the right of way.

Michael Lower

Implied grant of easements

July 6, 2016

In Collins v Collins (No 2) ([2015] EWHC 2652; [2016] 2 P & C.R. 6) a mother and father executed a deed of trust of agricultural land. The beneficiaries were themselves and their three sons. At the time that the trust was created, it was contemplated that the land would be converted to commercial use. This contemplated change of use subsequently happened. The timing of the deed of trust was partly motivated by tax planning considerations which meant that the value of the land needed to be transferred to the beneficiaries. To the extent that any value was retained by the parents, the tax planning purpose would be frustrated.

The deed of trust was extremely simple. The subject matter of the trust was a parcel of land. There was no express grant of a right of way over a private road on the parents’ retained land yet the land subject to the trust was landlocked without the necessary easements over the roadways owned by the parents. It was now intended that the trust land should be sold to a third party but the potential buyer would only proceed if it could be shown that the trust land had the benefit of the necessary rights of way. Because there was a family dispute, the parents did not now want to grant such rights of way. Thus, the question was whether the necessary easements could be implied into the deed of trust.

In his judgment, Mr Edward Bartley Jones QC thought that an easement could be implied into the deed of trust by any of several routes. Whatever the chosen route, the starting point was to identify the subject matter of the grant, applying the general law on contractual interpretation as recently re-stated in Arnold v Britton ([65]). On the facts of this case, the parents intended to make a gift of the whole equitable interest in land which was intended for commercial purposes ([69]). The principle of non-derogation from grant could be relied upon as the basis for implying the necessary easements. It extends even to the grant of non-proprietary, contractual rights and so the fact that the parents were owners of both the dominant and servient tenements was no obstacle to the application of the principle here ([73]).

Equally, the easement could be one of common intention applying the principles in Pwllbach Colliery. The common intention was that the land should be developed for commercial purposes and a full vehicular right of way was necessary to give effect to the common intention ([74] – [78]. Even though the beneficiaries had only an equitable interest, whether the right of way was legal or equitable depended on the intention of the parties ([79] – [80]). It did not matter that the parents were owners of both the dominant and servient tenements. The right of way would subsist as a quasi-easement until the sale took place and the necessary diversity of ownership was in place. At that time section 62 of the Law of Property Act (equivalent to section 16 of the Conveyancing and Property Ordinance) would pass on the benefit of the already existing easement. In the process, the quasi-easement would become an enforceable easement ([83] – [85]).

Could it be argued that the easement was intended to be a right for vehicular access for agricultural purposes only. To answer this question involves answering the two questions posed by Neuberger LJ in McAdams Homes Ltd v Robinson: would the use for commercial purposes be a radical change in character of the contemplated use rather than a mere intensification; and would this use impose a substantial increase or alteration over the intended burden imposed on the servient tenement? ([61]). Here the parties had intended that the land would be converted to commercial use at the time of the deed of trust. The fact that the commercial development had been (perhaps unexpectedly) very successful only intensified the intended use. The McAdams questions could be answered in the negative.

Any buyer from the trustees would have an easement conferring the right to use the road for vehicular access to and from the commercial development.

Michael Lower