Is Demolition Renewal?

The Court of Appeal recently issued a ruling which will come as a relief to property developers seeking to rely on easements in order to redevelop properties.

The case concerned whether or not the owner of a property could rely on a right of entry onto adjoining property which was allowed when the works being done were ‘rebuilding or renewal’.

The right was contained in a transfer dated 1993 and it was reserved in favour of ‘the property’. The court held that this meant that the right was limited to the rebuilding or renewal of the property as it then stood. However, the proposed works involved demolishing the existing buildings (two single storey industrial buildings) and replacing them with a multi-storey mixed development. Accordingly, the court rejected the assertion that the property owner could rely on the right of entry. The property owner appealed.

The Court of Appeal took a different view. It held that it must have been contemplated at the outset that the buildings were of finite life and that there might be changes in circumstances which would make a different sort of property more appropriate for the site. The right to entry belonged to ‘the property’, not the buildings, and this must include the land on which the buildings stood.

The Court therefore concluded that the right of rebuilding must include demolition of the existing property and the erection of new buildings which may be different from the existing ones. To restrict the right only to the situation where the work was to rebuild buildings similar to those currently on the site did not make sense and could not have been what was contemplated when the original transfer documents were created. Such an interpretation could also create great uncertainty over whether the right was exercisable or not in some circumstances. The Court considered that the original parties to the transfer would have been surprised were the interpretation construed as narrowly as in the decision of the lower court.

The ruling will give comfort to developers seeking to enforce a right of access over neighbouring land in order to carry out developments as it gives grounds for confidence that easements over land which are similarly worded will be interpreted in a commonsense way and not interpreted narrowly.

Risegold Ltd. v Escala Ltd. [2008] EWCA Civ 1180. See http://www.bailii.org/ew/cases/EWCA/Civ/2008/1180.html.

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