Two important implied rights of tenants arising out of a right of way in a lease have recently been recognized by the Irish Courts. These new developments could have very significant ramifications.
In Redfont Limited and Wright's Fisherman's Wharf Limited v Custom House Dock Management Limited and Hardwicke Property Management Limited, The High Court, Shanley J., March 31 1998 the plaintiffs owned restaurants within the International Financial Services Centre (IFSC). They occupied their premises under subleases which contained a right of way. For security reasons the management company changed the parking regulations with the result that customers of the restaurants were denied access by car to the common areas within the IFSC. This resulted in a significant loss of business for the plaintiffs.
The plaintiffs argued that an express grant in the lease, giving a right of way for vehicles to pass over the public areas of the IFSC, was so widely drafted as to include a right to park cars on these areas as long as no obstruction was caused. Shanley J. was satisfied that the plaintiffs had made out an arguable case that the introduction of traffic and parking restrictions unlawfully interfered with the right of way and ancillary rights attaching to the right of way including the right to park. He stated that the lessors were not entitled to make rules which would extinguish such rights.
The case for an implied easement of parking was so strong that the court did not have to consider the matter of equitable estoppel raised by the plaintiffs. This issue, though, warrants consideration as it may play a significant role in future litigation where the lease is less explicit. In Handel v St Stephen Close Ltd [1984] 1 E.G.L.R. 70 an English court upheld a claim for proprietary estoppel in similar circumstances to those in Redfont v Custom House. There, it was held, that where a tenant is led to believe that there will be a right to park, and he acts to his detriment based on this belief, then it would be unconscionable to allow the landlord to deny at trial that which he had allowed or encouraged the tenant to assume. Had the facts in Redfont v Custom House been less clear-cut this argument may well have been entertained by Shanley J.
The significance of the ancillary easement goes further yet. In Heeney v Dublin Corporation, unreported, Supreme Court, August 17 1998, the court considered the claim of the plaintiffs, tenants of the Ballymun flats, that Dublin Corporation was obliged, under their tenancy agreement, to provide a reasonably efficient lift service. The court accepted that this was the case and reasoned that this was an ancillary right to the right of way granted to the tenants by the Corporation. This decision was made despite the presence of stairs meaning their right of way was not, strictly speaking, denied to them by inoperable elevators.
The result of these cases and the implication regarding proprietary estoppel illustrate how far the courts can go in implying ancillary easements into leases. The significance of this is not to be understated, especially when one considers the cost and inconvenience this can place on the Landlord. In drafting a lease a Landlord may now feel the best way of avoiding this issue is by expressly prohibiting the car parking or elevator maintenance. However this assumes that the implied ancillary easement can be anticipated. Also this may only encourage a prospective tenant to argue for the removal of the clause, something which the courts, in the light of the decisions in Redfont and Heeney, may well be willing to accept.
Peter Bland ((1997) C.P.L.J. 2 (2). 26) (views the above two decisions with trepidation. They appear to have potentially far-reaching implications:
"Other than parking and the use of elevators, it is possible to envisage the recognition of other novel rights arising by implication in leases. Easements of common intention can be implied into commercial leases in particular where the intended use of the premises is dependent on the implication of the right."
It appears that ancillary easements in leases may not stop at car parking and elevator maintenance.
For further information on any of the above topics please contact Paul Eustace at Dillon Eustace by phone on 353 1 667 0022.
The materials contained on this web site are for general information purposes only and are subject to the disclaimer.