Implied Easement – Landmark Case

Jun 11, 2019

The Upper Tribunal decided in the recent case of Taurusbuilt Limited and Others v McQue and another (2019) UKUP 81 (LC), an easement can be implied as a term of a mortgage deed. The ruling is the first of its kind.

Mr and Mrs Ward owned properties, 2 The Halls and Dinsdale Hall, at the same time, but the properties were registered at the Land Registry under two different title numbers. In order to access 2 The Halls, the occupiers and visitors had a right of way over a private roadway and a right to park in two car parking spaces; which were actually on the land relating to Dinsdale Hall. 

In 2005, Mr and Mrs Ward mortgaged 2 The Halls, but the land was repossessed by the mortgage lender in 2011. The land was then sold onto Mr and Mrs McQue in 2012, and was sold without any explicit right of way over the private roadway or the right to park in the car parking spaces. 

In 2013, receivers for Mr and Mrs Ward in relation to their financial circumstances, sold Dinsdale Hall to Taurusbuild Limited.

When Mr and Mrs McQue applied to the Land Registry to register their right of way and the right to park in the car parking spaces, Taurusbuild Limited objected to the application.  

The case went to the first tier tribunal and the tribunal held it had power to grant an order to grant the easements of the right of way and right to park under equity. It accepted that there was no express grant of rights and the mortgage lender was unable to give such rights when they were in possession of the property, and sold it to Mr and Mrs McQue. In reaching the decision, the tribunal considered rights derived in a previous planning obligation and a conveyance dated 1988 and held as Mr and Mrs McQue were successors in title and therefore were entitled to have the benefit of these rights. Taurusbuild Limited and Others appealed the decisions and the case went to the Upper Tribunal.

The Upper Tribunal had to consider if it was possible to imply the right of way over the roadway and the right to use the car parking space in the terms of the mortgage deed when Mr and Mrs Ward initially mortgaged 2 The Halls back in 2005. In reaching their decision, the tribunal relied upon the rule under Wheeldon v Burrows (1879) which states all rights which would be an easement if two separate pieces of land were not owned by the same owner at the same time, as long as they are necessary for the reasonable enjoyment of the land which is sold on, is used at the time the Seller sells part of the land on and is used continuously and is apparent. The tribunal held that these easements were implied into the mortgage deed else otherwise, if the rights were denied to the mortgage lender in 2005, this would make it difficult to access the property and consequently devalue it. As far as the Tribunal found, it was always the intention of Mr and Mrs Ward that vehicular access to 2 The Halls and parking would be via Dinsdale Hall. The evidence for this was in the previous planning documentation which Mr Ward applied for.    

The case is a landmark case and is the first case to have granted easements to a mortgage lender, even though the mortgage lender at the time was not in possession of the property. There have been concerns raised by the judgement, as normally for easements to be granted you need to have one owner for the land with the benefit of the easement and a different owner for the land which is subject to the right. However, the tribunal stated the fact there was only one owner, did not prevent the easements from existing. The case is also contrary to general understanding that it is not possible to grant rights or reserve rights when mortgaging only part of a land which someone owns.  The case shows that there are complexities when mortgaging only part of the land you own. It will be interesting to see how the case is followed in the future.

If you are thinking of purchasing a Property with a mortgage or remortgaging a Property then please do not hesitate to contact Leanne Wood via email on leanne.wood@herrington-carmichael.com.

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