In June 2005, the claimant bought a piece of land with planning permission to build an office block. It was granted an easement to lay service media over the vendor's adjoining land. The vendor subsequently sold the adjoining land to the defendants.
The claimant exercised its rights and dug a trench across the defendants' land in which all the new services for the office block would be laid. However, it then ran into problems. The electricity supplier for the area, EDF, said that notwithstanding the existence of the easement it would only lay electricity cables in the trench if the defendants entered into a direct deed of grant with EDF. This was because after installation the equipment would remain the property of EDF. The direct deed of grant would enable EDF to obtain access to its equipment as and when necessary without having to rely on the support of others.
The defendants refused to enter into the deed of grant. The claimant argued that the defendants were obliged to do so; either because that obligation arose as a right ancillary to the easement which had been granted, or because otherwise the defendants would be in derogation from grant, since the claimant's land had been sold on the basis that the claimant would build an office block on it.
The court ruled that the easement did not carry with it an implied positive obligation on the defendants to execute the deed of grant. An easement is essentially negative in character. It cannot impose a positive obligation on the owner of the burdened (or 'servient') land except in certain very limited circumstances. The servient owner's only obligation is to refrain from doing anything which impedes enjoyment of the easement by the dominant owner.
Positive obligations can be imposed by contract but will not generally bind successors in title. Therefore even if the circumstances were such as to permit the implication of a positive obligation as between the claimant and the original vendor, that positive obligation could not pass to the defendants.
The court also rejected the argument based on derogation from grant. This principle prohibits a vendor who knows that the purchaser is going to use the land for a specific purpose from doing anything which hampers that use. In other words, the vendor cannot do anything which would render the land materially less fit to be used for the purpose for which it was bought. The doctrine is therefore negative in character (like an easement), and restrictive in scope. It could not be used to compel a grantor to enter into a contractual relationship with a third party on terms satisfactory to that third party.
Since the court rejected both the claimant's arguments, the result was that the claimant could not connect an electricity supply to its site unless it purchased a different adjoining piece of land in order to do so.
EDF does have powers to ask the Secretary of State to grant a wayleave. The claimant could have asked EDF to exercise this right, but was reluctant to do this because of the effect this might have on the timescale for the development and also cost implications. In the event that a wayleave were granted by the Secretary of State the defendants would be entitled to compensation from EDF for the grant and any damage caused by its exercise. The claimant anticipated that it would be required to indemnify EDF for this compensation.
Things to consider
What should developers do to ensure they can access the services they need? The transfer to the developer could contain a covenant by the servient landowner to enter into a direct deed of grant if required. Since most landowners will want to see in advance what they are agreeing to sign up to, forward planning is essential. As this would be a positive covenant, it is also necessary to take a covenant from the servient landowner that on a sale of the servient land it will procure that its successor enters into a direct covenant with the developer in the same terms (otherwise the successors will not be bound - see above). That covenant should be protected by a restriction on the title to the servient land.
William Old International Ltd v Arya