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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Adealon International Proprietary Ltd v London Borough of Merton [2007] EWCA Civ 362 (25 April 2007) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2007/362.html Cite as: [2007] EWCA Civ 362, [2007] 1 WLR 1898, [2007] WLR 1898

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
HH JUDGE KIRKHAM
HC 03 C 03077

		Royal Courts of Justice Strand, London, WC2A 2LL
		25th April 2007

Lord Justice Carnwath :

Background

1. The claimant ("Adealon") is the owner of a strip of land ("the red land"), of about 525 square metres, lying along the A24 Merantun Way to the south. The defendant council ("the council") owns the land adjacent and to the north ("the green land"), which extends to about 3,237 square metres and is bounded on the north by another road, High Path. The red land has no direct access to High Path, and cannot lawfully obtain access to the trunk road A24, without planning permission which has been consistently refused. Until 1989 the red and green land were in common ownership. Adealon claims that, on the severance of the two plots at that time, it became entitled by operation of law to an "easement of necessity" over the green land, to give it access to High Path. It further claims that the right of way is for both vehicular and pedestrian traffic.
2. The judge (HH Judge Kirkham, sitting as a judge of the High Court) dismissed the claim to an easement of necessity. She indicated that, if she had upheld the claim, she would have determined that it was for vehicular and pedestrian traffic. In the appeal the former conclusion is challenged by the company, and the latter by the council.
3. The proceedings had begun in August 2003, as a claim by the company for trespass by the council on the red land. However, by a compromise agreed immediately before trial, the other issues were settled, subject to the claim for damages for trespass, which were determined by the judge. There is no appeal from that decision. The only live issue before us relates to the claimed easement.

The history

4. The judge made detailed findings as to the history. It had to be extracted largely from the documentary evidence, which does not appear to have been very complete. The only witnesses were Mr Manzoor Hussain, a director of Adealon, whose statement was accepted without cross-examination; and Mr Joy, an officer with the council, who gave evidence on the physical layout, and the planning history, and was "cross-examined very briefly, and on very limited points".
5. For present purposes it is sufficient to note the following points in the chronology, based on the judgment supplemented by Mr Hussain's witness statement:

i) From the mid-1980s, a company called Boastdean Limited had owned a site including both the red and green land, together with land to the south which was part a disused railway. There was a warehouse on the green land, used as a cash and carry store, with a hardstanding on the land behind it to the south. There was a U-shaped "in and out" drive which ran around both sides and the rear of the building. (I note that a plan attached to the particulars of claim indicates that the southern part of the "drive" adjoined what became the boundary of the red land. At this stage I shall proceed on that basis, although there appears to be no specific evidence to support it.)

ii) In 1988, the land owned by Boastdean immediately to the south of the red land was acquired for the construction of what became the trunk road A24. That road was completed and opened to traffic by February 1989. In December 1988 a traffic order had been made prohibiting the use of this stretch of the road by pedestrians.

iii) Mr Hussain became interested in the site through a company called Parbrook Ltd, registered in Liberia, of which he was the beneficial owner. In 1989 Parbrook acquired the shares in Boastdean.

iv) On 23^rd October 1989 "as part of the overall transaction" Boastdean transferred the green land to a company called Kempstone Limited (a company incorporated in the Isle of Man), in which Mr Hussain also had "a beneficial interest". Boastdean retained the red land. Mr Hussain gave this explanation in his statement:

"The reason part of the land only was sold to Kempstone was that I, through Parbrook Limited, had found an investor in Jersey who wanted a stand alone company in which to participate. It was agreed to use Kempstone Limited for such purpose. Parbrook at the time had other interests in various ventures and in any case wanted to exercise a degree of control over the proposed venture as it did not want Kempstone to 'run off' with the deal on its own."

His intention was to seek to develop both parcels together "as a joint venture" with Kempstone. At that time the green land was mortgaged to Dunbar Bank plc.

v) In November 1989 an application was made for outline planning permission for the erection of light industrial buildings on the whole site, with access from High Path only. Conditional consent was granted. As to what followed, I again quote Mr Hussain:

"Having obtained planning permission, the property market at the time started to deteriorate. There was hardly any demand for light industrial/office type of premises at the time. Consequently, I started to renegotiate with the architects and Merton Council for a change of use (fresh planning) for a petrol station and some light industrial units. I had reached an agreement with BP to build a petrol station and car wash facilities on part of the land at the time. The petrol station was to face Merantun Way and the industrial units would face High Path."

vi) There followed various applications for permission for development of light industrial units and of a petrol filling station with access from Merantun Way. The details are not complete in the evidence. It is sufficient to note one application, made in August 1992, which related to a site including both the green and the red land. It was made for 3 light-industrial units fronting High Path, and a petrol station with access from Merantun Way and egress to High Path. The owner of the site was said to be Kempstone. It was refused in May 1993 on grounds which included prejudice to traffic flow in Merantun Way.

vii) On 29^th March 1994, the land owned by Kempstone was sold to the council. At paragraph 17 of her judgment the judge recorded that this was by agreement between Mr Hussein and Dunbar. At paragraph 14 of his witness statement Mr Hussain said:

"This was at a time when the property market was in serious decline and with no end in sight to the recession, it was considered best that the land be disposed of. Once the land was sold to Merton Council I did not visit the site for some time, as I had other matters to deal with and lots of other commitments back in Australia to take care of."

viii) The council took occupation of both the green and red land, apparently not realising that the red land was under separate ownership from the green land. In January 1995, the council obtained planning permission to build a day-care centre on the whole site, including an area for parking for disabled transport. They built the day-care centre, incorporating the western section of the red land into the garden, taking up the concrete hard-standing. In May 1996, they leased the eastern side of the site, including the eastern section of the red land, to Merton Association for Disabled People for parking ambulances.

ix) In July 2000, Boastdean transferred the red land to Adealon, to which it also assigned all causes of action pertaining to the land. In August 2003, the present proceedings were begun.

6. The judge commented on the evidence of Mr Hussain's property dealings:

"Mr Hussain does not give a very full account of matters relevant to the decisions to sell the larger parcel of land to Kempstone and to retain the smaller, rear of parcel of land. He refers to negotiations with an investor with a view to entering into a joint venture to develop both parcels of land, but it is not clear, for example, whether any joint-venture agreement was entered into. It appears that Mr Hussain decided to retain the rear land in the hope that anything built on that land would face Merantun Way and have access to it. It seems to me that the expectation, at that time, was that there was likely to be access from the rear land on to the highway.

Mr Hussain chose to retain the red land. I infer from all the evidence available to me that Mr Hussain had hoped to be able to develop the land to the south and to do so by gaining access to the highway and not from and to High Path. Initially, the rear land was thought likely to be incorporated into the new highway. That did not happen, but Mr Hussain then sought planning permission for a petrol station and car wash facing Merantun Way. It appears to me that Mr Hussain took the view that it would benefit him to retain the red land. The sale by Dunbar in March 1994 was not a hostile act on the part of the bank. The sale was consistent with Mr Hussain's desire to dispose of some land and to retain and develop the red land."

7. The judge held that there was no basis for implying an easement over the council's land to High Path, either as an "easement of necessity" or on the basis of "common intention" at the time of the 1989 transfer. As to the former, a detailed review of the authorities led her to the conclusion that as a matter of law an easement of necessity could only arise where the land of one party to a transaction was wholly surrounded by the land of the other. On this she preferred the authority of Kekewich J in Titchmarsh v Royston Water Company Limited (1899) 81 L.T. 673 over that of Danckwerts J in Barry v Hasseldine [1952] Ch. 835. (I shall return to this point.)
8. She concluded:

"At the date of the transfer by Boastdean to Kempstone in 1989, Merantun Way had been built to the south of the red land. The red land was not surrounded by land owned by Kempstone. To the west and east land was owned by third parties. To the south was the highway. On that ground alone, following Titchmarsh, the claimant has not demonstrated that it is entitled to the grant of an easement of necessity. "

She also held that there was no "common intention":

"The evidence indicates that it was not the common intention of the parties that the red land should have access to High Path over the green land. Before the red land and green land were split, Mr Hussain proceeded on the basis that he wished to take advantage of the fact that the red land adjoined the highway. Until the application for planning permission for a petrol station and car wash on the red land was refused, the intention was to look south, not north. Mr Hussain's focus was to the south. His principal intention was to retain and use the red land in a way which contemplated access to and egress from the land by way of the highway to the south. When the green and red land were split, there was of course no express reservation of easement and no evidence that anyone contemplated the need for this. "

9. Although both points are before us, the argument has understandably concentrated on the issue of easement of necessity, there being no realistic basis to undermine the judge's factual conclusion on the absence of "common intention".

Easements of necessity

10. A good starting point is Lord Oliver's succinct statement of the principle in the Privy Council in Manjang v Drammeh [1990] 61 PMCR 194, 196-7:

"It seems hardly necessary to state the essentials for the implication of such an easement. There has to be found, first, a common owner of a legal estate in two plots of land. It has, secondly, to be established that access between one of those plots and the public highway can be obtained only over the other plot. Thirdly, there has to be found a disposition of one of the plots without any specific grant or reservation of a right of access. Given these conditions, it may be possible as a matter of construction of the relevant grant (see Nickerson v Barraclough) to imply the reservation of an easement of necessity."

11. As that passage confirms, the principle is one of implication from the circumstances of a grant of land, not (as suggested in some of the earlier cases and in academic writings^[1]) a free-standing rule of public policy. This was settled by this court in Nickerson v Barraclough [1981] Ch 426, where Buckley LJ summarised the correct approach:

"…, in my judgment the law relating to ways of necessity rests not upon a basis of public policy but upon the implication to be drawn from the fact that unless some way is implied, a parcel of land will be inaccessible. From that fact the implication arises that the parties must have intended that some way giving access to the land should have been granted….

Public policy may inhibit the parties from carrying their intention into effect, but I cannot see how public policy can have a bearing upon what their intention was. In my judgment, that must be ascertained in accordance with the ordinary principles of construction, the language used and relevant admissible evidence of surrounding circumstances." (p 447)

12. The classic case of an easement of necessity is where the land of one party to a grant is entirely surrounded by that of the other. As between the two of them, it is not difficult to infer that the landlocked property, whether of the grantor or the grantee, was intended to have some form of access over the surrounding land. That was explained by Sir George Jessel MR Corporation of London v Riggs (1880) 13ChD 798:

"It seems to me to have been laid down in very early times--and I have looked into a great number of cases, and among others several black-letter cases^[2]--that the right to a way of necessity is an exception to the ordinary rule that a man shall not derogate from his own grant, and that the man who grants the surrounding land is in very much the same position as regards the right of way to the reserved close as if he had granted the close, retaining the surrounding land. In both cases there is what is called a way of necessity; and the way of necessity, according to the old rules of pleading, must have been pleaded as a grant, or, where the close is reserved, as it is here, as a re-grant." (p 806)

13. So much is uncontroversial. But as one moves away from that simple, bipartite model, to one in which the surrounding land is shared with strangers to the grant, the issues become more complex. Where there is a realistic possibility of alternative access over the land of third parties, the case for an easement of necessity is much less clear.
14. In particular, in that situation there is no reason in my view to assume that the same rule should apply to grantor and the grantee. In this context, the presumption of non-derogation from grant works in favour of the grantee, but against the grantor. Further, the grantee may also be able to rely on other forms of implied right, not available to the grantor: see generally Megarry & Wade 6^th ed para 18-097ff. As is said there:

"The general rule… is that a grant is construed in favour of the grantee. Therefore normally no easements will be implied in favour of a grantor; if he wishes to reserve any easements he must do so expressly." (para 18-097)

Conversely:

"In favour of a grantee easements are implied much more readily, on the principle that a grant must be construed in the amplest rather than in the narrowest way." (para 18-102)"

15. This contrast can be seen clearly in the leading statement of the applicable law by Thesiger LJ in Wheeldon v Burrows (1879) 13 Ch D 31, 49:

"… two propositions may be stated as that I call general rules governing cases of this kind. The first of these rules is, that on the grant by the owner of a tenement of part of that tenement as it is then used and enjoyed, there will pass to the grantee all those continuous and apparent easements (by which, of course, I mean quasi easements), or, in other words, all those easements which are necessary to the reasonable enjoyment of the property granted, and which have been and are at the time of the grant used by the owners of the entirety for the benefit of the part granted. The second proposition is that, if the grantor intends to reserve any right over the tenement granted, it is his duty to reserve it expressly in the grant. Those are the general rules governing cases of this kind, but the second of those rules is subject to certain exceptions. One of those exceptions is the well-known exception which attaches to cases of what are called ways of necessity;

Both of the general rules which I have mentioned are founded upon a maxim which is as well established by authority as it is consonant to reason and common sense, viz., that a grantor shall not derogate from his grant."

16. This distinction becomes particularly relevant when considering the possibilities of alternative access over land of third parties. In the case of the grantee, the application of the presumption should in principle be unaffected by such possibilities. The grantee's normal expectation is that access, if not otherwise available will be allowed as an incident to the grant, and thus that it will be provided by the grantor over land within his control. Where the roles are reversed, the grantor has no equivalent expectation. On the contrary, the presumption is that any rights he requires over the land transferred will have been expressly reserved in the grant, and the burden lies on the grantor to establish an exception. To that issue the existence of other realistic possibilities of access, even if not legally enforceable at the time of the grant, is clearly relevant.
17. I have already referred to the judge's resolution of the apparent conflict between Titchmarsh v Royston Water Company Limited (1899) 81 L.T. 673 and Barry v Hasseldine [1952] Ch. 835. I do not see either as directly relevant to the present case, since neither concerned a claim by a grantor over land of the grantee. Neither is in any event binding on this court. However, since the judge based her decision in part on the earlier case, it may be helpful to offer some comment.
18. Titchmarch was a decision of Kekewich J. The purchaser's land was bounded on three sides by land of the vendor,^[3] and on the fourth side by a public road which ran in a steep cutting. The purchaser claimed a right of access to the highway over a private way across the farm, either under the general words of the conveyance, or as an easement of necessity. Both claims failed, the latter on the grounds (in the words of the headnote) that:

"… the way was not a way of necessity because the defendants could, though at some expense, cut a way from the public road."

So understood, the case is unremarkable. However, the judge seemed to go further, apparently holding that there could never be an easement of necessity where the surrounding land was partly owned by strangers to the grant. He referred to a statement in Pomfret v Ricroft 1 Wms. Saud. 323, in which the rule was treated as applicable where someone "having a close surrounded with his own land" grants the close to another. He thought that those words were apt to exclude a case where the granted premises are "not surrounded by land of the vendor, but abut on one side on land of a stranger". He added:

"There is no authority for extending the doctrine to such a case as that. In Gale on Easements, 5th edition, the doctrine is stated in almost precisely the same language with this addition: 'So, too, if the close be not entirely enclosed by my land, but partly by the land of strangers, for he cannot go over the land of strangers, quaere'. For this reference is made to Rolle's Abridgement and Viner's Abridgment. I have referred to these volumes, and have ascertained that the quotation is accurate including the quaere, which is to be found in both works, but I have not come across any comment on either the statement or the quaere. It seems to me that the statement is inconsistent with the doctrine as above explained and with the principle on which it has founded."

19. In Barry v Hesseldine Danckwerts J took a different approach. The facts were somewhat complex. The grantee's land was surrounded partly by land of the vendor, and partly by that of other parties, including a disused airfield owned by a third party. For some time following the grant they had been able to obtain access over the airfield by permission of the owner. There was an argument, rejected by the judge, that he had agreed to abandon any claim to access over the vendor's land. The issue therefore arose as to his legal rights in the event of the permissive right being unavailable. The judge held that he was entitled to an easement of necessity over the vendor's land, even though his property was not completely surrounded it.
20. Having referred to the uncertainty on the point expressed in the then current edition of Gale on Easements and in other authorities, including Pomfret v Ricroft, he said:

"There is therefore no express authority on the point. In my opinion, however, if the grantee has no access to the property which is sold and conveyed to him except over the grantor's land or over the land of some other person or persons whom he cannot compel to give him any legal right of way, commonsense demands that a way of necessity should be implied, so as to confer on the grantee a right of way, for the purposes for which the land is conveyed, over the land of the grantor; and it is no answer to say that a permissive method of approach was in fact enjoyed, at the time of the grant, over the land of some person other than the grantor because that permissive method of approach may be determined on the following day, thereby leaving the grantee with no lawful method of approaching the land which he has purchased." (p 339)

21. Although there was no mention of Titchmarch in the judgment, it had been referred to in the course of argument, where it was suggested that Kekewich J's comments on the law were obiter. Danckwerts J interposed:

"If the matter depends on implied grant from which the grantor cannot derogate, it seems immaterial that there is adjoining land owned by a third party." (p 837)

For reasons discussed earlier, I would respectfully agree with that observation, particularly now that it is clear that the issue is one of implication, not public policy. In so far as Titchmarch is to contrary effect, I would not follow it, although as I have said the decision can be supported on the narrower ground stated in the headnote. However, as already explained, neither case has any relevance to the present case, which concerns implied reservation, not implied grant.

22. For the same reason, I find no assistance in Bolton v Bolton (1879) 11 ChD 968. That was another case relied on by Mr Partridge before us, though not cited to the judge, as showing that there could be an easement of necessity, even though there were prospects of an alternative access over land of a third party. However, that again was a right claimed by the grantee, not the grantor.
23. Of more direct relevance is Pinnington v Gallard (1853) 9 Ex 1. A Mr Dickinson had sold, on the same day in 1839, a piece of land in three separate lots, one to a Mr Dearle, and another to a Mr Moss. An existing track through Mr Dearle's lot gave access to Mr Moss' lot and was used for that purpose for several years after the sale, but there had been no express grant or reservation of a right of way. The use was later disputed by the defendant, Mr Dearle's successor, but was confirmed by the court. Since it could not be ascertained which grant had come first, Baron Martin considered both alternatives. Assuming the grant to Mr Moss had come first, the right over the retained land of Mr Dickinson was covered by well-established principles of implied grant, explained by Sergeant Williams in his notes to Pomfret v Ricroft (above). He continued:

"Secondly, assume that the conveyance to Mr. Dearle was executed the first. In this case the Rye Holme closes were for a short period of time the property of Mr. Dickinson after the property in the land conveyed to Mr. Dearle had passed out of him. There is no doubt apparently a greater difficulty in holding the right of way to exist in this case than in the other; but according to the same very great authority the law is the same, for (Sergeant Williams') note proceeds thus: ' So it is when he grants the land and reserves the close to himself;' and he cites several authorities which fully bear him out…

It no doubt seems extraordinary that a man should have a right which certainly derogates from his own grant; but the law is distinctly laid down to be so, and probably for the reason given in Dutton v. Taylor 2 Lutw.1487, that it was for the public good, as otherwise the close surrounded would not be capable of cultivation."

24. This passage is of assistance to the appellant to the extent that that same rule was treated as applicable, whether the transaction was treated as a grant or a reservation, and even though (as appears from the plan printed with the report) there were adjoining areas belonging to third parties. However, the facts were very different to the present; and the two-stage analysis of what were essentially simultaneous transactions seems somewhat artificial to modern eyes (cf Hansford v Jago [1921] 1 Ch 322, 335). In any event, there was no discussion of the significance of alternative possibilities of access over land of third parties. The case cannot therefore be regarded as authoritative on that aspect. It is true that the passage from Baron Martin's judgment was quoted by Thesiger LJ without adverse comment in Wheeldon v Burrows (above, at p 58). But that, as I read it, was not by way of specific endorsement of the reasoning, but simply by way of confirmation of his earlier analysis, to show -

"…that the whole foundation of the judgment… was that the way claimed in the case was a way of necessity, and… that Baron Martin and the Court whose judgment he delivered in no way disputed the general maxims to which I have referred."

In so far as Baron Martin there treated "public policy" as the basis of the principle, later authority, as I have said, does not support him. Thus, while I do not doubt the correctness of the decision in Pinnington, it provides no support for the present appeal.

25. For completeness I should refer to an Australian case which was not cited to us, but which seems closer to the present on the facts, relating as it does to a claim by a vendor: North Sydney Printing Property Ltd v Sobemo Investment Co. Ltd [1971] NSWLR 150. This also appears to be the fullest judicial discussion of the authorities in the modern cases. It was considered by Sir Robert Megarry VC in Nickerson v Barraclough at first instance ([1981] Ch 325, 333-4). I gratefully adopt his summary of the facts:

"The North Sydney case was decided in the Supreme Court of New South Wales by Hope J., sitting in Equity. Put very shortly, the facts were that a company sold part of its land, which abutted on to a street. The retained land had no access to a highway, but the company intended subsequently to sell it to the local authority as an addition to a contiguous car park owned by that authority. The proposed sale to the local authority went off, and the company was left with its retained land, which was landlocked. The company then sought a declaration that its retained land had a way of necessity over the land sold; and this claim failed. Over twenty authorities (half of them English) were cited in argument, including Packer v. Wellstead, 2 Sid. 111 and Dutton v. Tayler, 2 Lutw. 1487…

The company contended that it was entitled to a way of necessity by virtue of public policy, and that the intention of the parties was irrelevant. The purchaser contended that public policy was irrelevant, and that the company was entitled to no right of way, since the intention of the parties was that the company should have no such right…."

26. The claim failed. The court held that a way of necessity arises to give effect to an actual or presumed intention. On the facts the company's intention was the contrary: its intention was that the land retained should have no access over the land conveyed, but instead should have access over the car park. I note in particular the Vice-Chancellor's comment on the differences from the case before him:

"… the claim to a way of necessity was made by the vendor, and not, as in the present case, by successors in title of the purchaser; and although ways of necessity are in a special position, the law is far more ready to imply the grant of easements than it is to imply their reservation. There is a doctrine against derogating from a grant, but not against derogating from a reservation…." (p 334)

The case was not referred to in the Court of Appeal, which differed from the Vice-Chancellor on the facts of Nickerson v Barraclough itself. However, I see nothing to throw any doubt on this aspect of his analysis, which is consistent with the view I have already expressed.

Conclusion

27. For these reasons, I would reject Mr Partridge's principal submission, which is that Adealon is entitled to an easement of necessity, by operation of law, and regardless of the existence of possible alternatives over land of third parties.
28. Once that argument is disposed of, the issue becomes one of implication from the facts of the case. As to that I see no reason to differ from the judge's overall conclusion. Mr Partridge questions some of the detail. For example, he says that there was insufficient evidence to support the judge's finding that Mr Hussain was looking to the south for access. This, he says, is contrary to the inference to be drawn from the planning application for a development linked to High Path. I see some force in that point, but as the judge said Mr Hussain's evidence left many questions unanswered. However, this is immaterial. Since the disposal was to an associated company, it is not surprising that he was unconcerned about the need to reserve a specific right of access to the north. His main concern appears to have been to control the possibility of future access to the south, even though the prospects were speculative. In that respect he was no different to any other landowner who speculates on the prospect of planning permission in the future. However, that is far from creating the basis for an implied right. There is nothing in my view to overcome the ordinary presumption that, had he required an easement to the north, he would have made a specific reservation in the grant.
29. I would therefore uphold the judge's conclusion that Adealon does not have a right of way over the council's land. This makes it unnecessary to consider the scope of such a right, had it been created. I prefer to express no view on the judge's conclusion on that aspect of the case, which is not straightforward. I would simply dismiss the appeal.

Mr Justice Silber:

30. I agree.

Lord Justice Mummery:

31. I also agree.

Note 1   See e.g. A J Bradbrook Access to Landlocked Land: a Comparative Study of Legal Solutions 10 Sydney L Rev 39 (1983-5).    [Back]

Note 2   The black-letter books are described by Sir William Holdsworth (at pg.525 Vol. 2 of A History of the English Law, 4th Ed., Methuen/Sweet and Maxwell, London 1936) as being printed editions of the Year Books, which were early case notes created from the reign of Edward l to Henry Vlll. It seems likely ‘black-letter cases’ were those taken from the black-letter books. The black-letter books are now thought not to be an accurate transcription of the Year Book manuscripts; FW Maitland was of the view that “of mere, sheer nonsense those old black-letter books are but too full…” YB 1,2 Ed ll (SS), xii.    [Back]

Note 3   Although the plaintiff was a tenant of the farm, the judge felt able to treat it as a simple case “between vendor and purchaser” (p 675).     [Back]