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Implying rights into a completed transfer of land

An easement was held to be implied into a transfer, allowing the developer to install and maintain on adjacent land connections to the public utility…

In Donovan and another v Rana and another [2014] the Court of Appeal held that an easement was to be implied into a transfer, allowing the developer to install and maintain on adjacent land connections to the public utility services. 

The law

Case law suggests that it is difficult to establish an implied easement of common intention or an easement of necessity. The Court of Appeal in Stafford v Lee [1993] said that there are two hurdles that the claiming party (grantee) must overcome to establish an implied easement:

1) That there was a common intention as to some definite and particular use or purpose for the land; and

2) The easement or right claimed by the grantee is necessary to give effect to the common intention

The facts

Donovan (“the Seller”) sold at auction “a super individual building plot situated in a pleasant residential area in the sought after area of Chalk, where building plots are extremely rare”. The transfer included the following provisions:

  • A right of way to pass with or without vehicles across the Seller’s retained land marked by a blue strip in the transfer plan) “for all purposes connected with the use and enjoyment of the plot but not for any other purpose”
  • No rights or easements were to be deemed expressly or impliedly granted other than the right of way
  • A covenant that that the Buyer would erect a house to the satisfaction of the local authority

Unfortunately, the original buyer became bankrupt and sold the plot on. The new owner (R) built a new house on the plot and then began digging a utilities and services trench through the right of way on the Seller’s retained land to connect the plot to the mains. The Seller initially sought an injunction to stop the works but then limited the claim to damages. 

The Seller argued that the transfer did not provide for the right to lay utilities across the Seller’s retained land. R, by way of a defence to the Seller’s claim, claimed that due to the ‘self-evident’ common intention to build a house on the plot, there should be implied an easement of necessity to lay utility services across the right of way land.

First instance decision

The County Court agreed with R, holding that it was the common intention of the parties to the original transfer to build a modern house, in a busy residential area which complied with all local authority requirements, where such properties would have mains utilities connected to the nearby highway. The Seller appealed arguing:

  • Firstly, the transfer expressly reserved that no rights or easements, other than the right of way, were to be deemed expressly or impliedly granted into the transfer the Court was wrong to imply the further right.
  • Secondly, it was common ground that a house was to be built on the land, but this didn’t necessarily mean the house had to be connected to mains utilities. The house could have used a septic tank, a bore-hole, propane gas or obtained a utilities route across other land.
  • Thirdly, the express rights granted in the transfer did not include the right to dig up the right of way so as to lay utility connections.

Court of Appeal

The Seller’s appeal was dismissed. The Court of Appeal held that the transferee was granted an express right of way "for all purposes connected with the use and enjoyment of the property but not for any other purpose". The Court said one such purpose would be the laying of connections to utilities. The wording of the express right of way was sufficient to allow the carrying of utility lines provided that they did not unreasonably obstruct the Seller's enjoyment of their land. No additional right of way or access was required. Consequently, there was no new express right for the installation and maintenance of utility connections so there was no breach of the reservation that no further implied or express easements could be read into the transfer. 

Conclusion

When dealing with transfers of part/development sites, the transfer/lease should contain all the rights necessary for the intended use of the land. Think carefully about what rights need to be granted and whether those rights need to be for the benefit of not only the transferee but also, those authorised by the transferee. In William Old International Limited v Arya [2009], although the developer had an implied easement to lay service media across neighbouring land, there was no obligation on the owner of that neighbouring land to enter into a deed of grant with a statutory undertaker. It is safe to assume that the owner of the neighbouring land asked to be “rewarded” handsomely before entering into any such deed. 

It is notoriously difficult, risky and expensive to establish an easement of necessity or an implied easement of common intention so although this case should provide comfort for those who find themselves in a similar position to the defendant in Donavan, it is undoubtedly better not to be in that position at all, so think ahead!

Varun Maharaj, Partner, Real Estate team