Category Archives: Easements

Electricity Wayleave compensation included reduced value caused by loss of residential development contract

The Court of Appeal case of National Grid Electricity Transmission Plc v Arnold White Estates Ltd [2014] will make power utilities think twice about holding onto the existing routes of their power lines where these impede development.

The respondent had contracted to sell two parcels of land for residential development.

One of these related to a strip and was conditional on the removal of an overhead power line. Due to indexation the price had risen to £5.82m.

When the respondent gave notice terminating the current wayleave, the appellant electricity company applied for and got a statutory wayleave to retain the power line so the conditional contract lapsed.

Planning permission had been got for the land but the conditions precluded development with the power lines still there.

The sole issue was how much compensation was payable to the respondent under para 7 of Schedule 4 to the Electricity Act 1989.

The respondent said it ought to be the value of the land under the contract at the date of the new wayleave notionally free of the new wayleave minus the nominal value of the land at the date of the new wayleave as it actually was i.e. encumbered by that new wayleave.

The date was critical as by 2010 the value of residential land was much less than the contract had provided for.

The Court of Appeal, held that the respondent had been correct in the basis upon which it had claimed compensation.

AWE had crystallised the development value by the two sale contracts made in July 2007, by reference to development values then prevailing.

Nothing in paragraph 7 of schedule 4, precluded compensation for the loss of contractual rights caused by the grant of a wayleave from the compensation afforded by the 1989 Act. In fact, the right to compensation under paragraph 7(1) was conferred in the most general terms.

The only limitation was that the loss claimed for must be loss suffered by the claimant in his capacity as owner or occupier of the land, rather than in some wholly unrelated capacity.

So there would be no compensation for loss suffered betting on the outcome of an application to the Secretary of State under paragraph 6 for the grant of a wayleave, even if the bet was placed and lost by the owner or occupier of the land.

The loss of this contractual right to proceeds of the sale under a conditional contract for the sale of the land, where the contract lapsed because of the grant of the wayleave, was a loss suffered by AWE in its capacity as owner of the land.

It was a right inseparable from the seller’s status as owner of the land in question.

Compensation was to be based upon the special value of the land to the owner rather than its objective market value.

The court commented that future tribunals would be astute to detect and defeat any collusive attempts to manufacture artificially high land contract prices ahead of the grant of wayleaves for the purposes of generating an inflated level of compensation.

This blog has been posted as a matter of general interest. It does not remove the need to get bespoke legal advice in individual cases.

Supreme Court Judgment on Planning & Historic Property Nuisance Claims

The recent Supreme Court case of Coventry & Ors v Lawrence & Anor [2014] involved the claimants’ bungalow which was across some fields from a speedway track and raised a number of issues in the law of private nuisance namely:

How far a defendant may contend that he has established a prescriptive right to commit what would otherwise be a noise nuisance;

The court concluded that you can obtain by long use a prescriptive right to commit what would otherwise be a nuisance by noise, or, in short, to transmit sound waves over neighbouring property.

But you had to ask whether the nature and degree of the activity over a period of at least 20 years, taken as a whole, would make a reasonable person on the receiving end of that noise aware that a continuous right to enjoy making noise was being asserted and ought to be challenged if the plan was to resist it.

Here there were some non fatal gaps in the defendant’s claimed use of the track. However what was fatal to this defence was that they had failed to show that their activities during the 20 years amounted to a nuisance. It was even insufficent to show that the activity has created a noise for 20 years. What had to be established was that the activity had (or a combination of activities had) created a nuisance over 20 years.

How far a defendant to a nuisance claim can rely on the fact that the claimant “came to the nuisance”;

In this case the speedway track had been going since 1976, the year after it got planning permission. Other motor sports and greyhound uses had been added to the planning later. However the claimants had only been there since April 2006 and their predecessors since 1984.

The court said that the victim “coming to the nuisance” was no defence to a nuisance claim. This stemmed from the fact that nuisance is a property-based legal wrong. The right to allege a nuisance ran with the land. So it would be odd if a defendant was no longer liable for nuisance merely because the neighbour had changed, even though his neighbour’s property was still being used the same way.

It followed that it might be a defence for a defendant that an activity had only become a nuisance because the claimant had changed the use of, or built on, their land.

The extent, if any, to which it is open to a defendant to a nuisance claim to invoke the actual use of his premises, complained of by the claimant, when assessing the character of the locality;

Here the court got into most difficulty. The court accepted the initial premise that the defendant’s activities are to be taken into account when assessing the character of the locality. The leading judgment then said that they would however not be acceptable so far as they amounted to a legal nuisance which appears entirely circular.

However it said they would be deemed lawful for those purposes if a court had already awarded damages instead of an injunction in respect of them.

Looking at the judgment the court do not seem to have squared the circle here. Perhaps the test is whether seen against the backdrop of the locality the defendant’s activities stand out as being a legal nuisance to the claimant which the claimant ought not reasonably to be expected to put up with at all, or at any rate without compensation.

How far the grant of planning permission for a particular use can affect that use being a nuisance;

The court adhered to orthodoxy. Granting planning permission did not mean that that development was entirely lawful. It just meant that the public law, public interest hurdle of planning permission had been cleared. Things could be a legal nuisance in the 19th century even when the requirement for planning permission had not existed.

Anyway it would be wrong in principle if a planning authority could deprive a property owner of their right to object to a nuisance, without compensation, when there is no appropriate provision for them getting such compensation in planning laws.

The approach to be adopted by a court when deciding whether to grant an injunction to restrain a nuisance, or whether to award damages instead, and the relevance of planning permission to that issue

Current authorities on this point were inconsistent.

The leading judge said the approach of the courts should be much more flexible than that suggested in some of them. It was entirely a matter for the court’s discretion.

Damages could be based on the loss of value to the claimants’ property caused by the nuisance.

But it was also suggested that damages should not be limited to this if the defendant might have paid the defendant more for a licence to commit the nuisance.

However, the leading judgment said there were factors militating against nuisance damages being assessed based on the benefit to the defendant in no injunction being granted.

As the court had heard no argument on the issue and held differing views, rather than cloud the issue further, the leading judgment said the fairest way to deal with the point was to refuse the defendants permission to raise it, but to hold instead that the judge’s order should contain a proviso that the defendants be free to argue for the judge’s injunction stopping the nuisance noise to be discharged, and damages awarded instead.

The decision whether to award damages instead of an injunction may be dependent on a number of issues, including the behaviour and attitude of the parties The trial judge would be better able to assess these. However the defendants would have to give the claimants sufficient notice of their intention to raise such arguments to enable the claimants to prepare.

However some members of the court indicated that the fact planning permission had been granted would not of itself cause the court to order damages rather than an injunction.

This blog is posted out of general interest. It does not replace tne need to get proper legal advice in individual cases.

Case illustrates the virtual impossibility of right of way abandonment by long disuse and/or obstruction

A recent Court of Appeal case illustrates the virtual impossibility of persuading a court that a right of way has been abandoned by long disuse and/or obstruction.

In Dwyer v The City of Westminster [2014] the respondent had a right of way over a passageway under a 1922 conveyance. The appellant, began to use the passageway as a place for storing his stalls and other equipment used for his market trading at the end of the 1960s, just after the appellant’s residential development (“the Island Site”) had been completed. He continued to do so until this dispute arose in 2010, and obtained from the Land Registry registered possessory title to the passageway in 2007, based on adverse possession.

Throughout his use of the passageway, the Edgware Road end of it was permanently obstructed, not just by the original wrought iron gates, but also by corrugated iron sheets on the inside, and on the inside by brickwork, two courses high, at ground level. From 2010 there was also wooden shuttering outside of it. At the other end, connecting with the service road, there were doors which the appellant kept locked, comprising a wood framing with corrugated iron sheeting outside it.

Since the passageway was effectively covered by the continuation of the Edgware Road terrace at first floor level, the blocking at one end and the gates at the other end of the passageway made it into an enclosed storage unit, through which no access between Edgware Road and the respondent’s Island Site had been obtained for forty years.

Nonetheless it would only involve modest time and expense for the passageway to be re-opened by the removal of those obstructions.

The respondent made no objection to the obstruction of the passageway from the end of the 1960s until 2010, because the access arrangements associated with the 1960s residential development of the Island Site rendered the Passageway effectively redundant.

The respondent now wished to redevelop the Island Site and, re-open the passageway.

The appellant refused to do on the ground that the right of way had been abandoned.

The Court of Appeal ruled that the right of way extended not merely to the land sold in 1922 as a whole, but to every part of it.

The fact that particular structures or residential units which existed on the benefiting land at the time of the grant might be demolished and replaced by others was irrelevant.

The trial judge was also wrong to conclude that there had been, or could be, a partial abandonment of a right of way, by reference to different classes of potential users of it (whether tenants, other occupiers or mere licensees).

This was very long non-use of the passageway as a right of way, for a period when neither the freehold owner of the benefiting land, nor any such person using any part of that land with the freeholder’s consent had any use for the passageway as a right of way.

There was no acquiescence in any alteration of the passageway that a claim of abandonment of a right of way could be based on. The obstructions were all superficial changes, which could easily be removed. Nor would the respondent suffer any significant prejudice. It was mere non-use, insufficient as a basis for concluding that the right of way had been abandoned for all time. There had, therefore, been no abandonment at all.

This blog has been posted as a matter of general interest. It does not remove the need to get proper legal advice in individual cases.