Easements – interpretation of right to use car parking space
This case centred on the interpretation of a lease and whether the landlord could go ahead with a proposed development on the claimant tenants' car parking spaces if it offered them alternative spaces elsewhere. The court found that the right to use the spaces granted by the tenants' leases was an easement rather than a demise. It held that the lease did not reserve a right for the landlord to build on the tenants' parking spaces, nor did it allow the landlord to change their designated parking spaces. The tenants were therefore entitled to an injunction.
The claimant tenants were long leaseholders of eight flats in a development originally constructed in the 1990s in the East End of London. The defendant was the freehold owner of the development and the tenants' landlord. Each of the flats had the benefit of the use of a designated parking space and when landlord obtained planning permission to construct a new building, it took the view that it was entitled under the leases to require the tenants to accept alternative car parking spaces.
In October 2008, the landlord's agent wrote to the tenants offering them alternative spaces and asked them to write back with their preferences. However, none of the tenants agreed to accept a new space. In September 2009, the landlord entered the site and fenced off the area on which the new building was to be constructed, including the tenants' car parking spaces. At least one tenant's car was fenced in during this process, although he was allowed to remove it when he wished. Faced with the lack of consent from the tenants, the landlord did not proceed with the development and the area, including the car park, remained fenced off without any construction having commenced.
The tenants issued a claim in October 2010 seeking an injunction to restrain the landlord from building on their car parking spaces, arguing that their right to use those parking spaces amounted to a demise and not merely an easement. The landlord argued that it had the right to require the tenants to use other car parking spaces in place of those originally allocated to them so that it could proceed with the development. Alternatively, it submitted that in view of the offer of alternative parking spaces, which it maintained would be equally convenient for the tenants, any remedy to which the tenants were entitled should be limited to nominal damages and an injunction should not be granted.
Demise or Easement?
On this point, Cooke J decided against the tenants' submission that their rights amounted to a demise rather than an easement. He did not agree that the lease provision which stated that the landlord "demises to the Tenant the Premises TOGETHER with the rights specified in the Second Schedule" meant that there was a demise not just of the Premises as defined (i.e. the flat) but also of the rights listed in the Second Schedule (which included the sole right to use each relevant car parking space). Cooke J further dismissed the tenants' argument that the grant of "sole use" at a rent was equivalent to exclusive occupation; the tenants had not been granted the sole use of the parking spaces but rather the sole right to use the parking spaces for parking a car or motorbike.
In assessing whether the nature of right granted was an easement, Cooke J considered whether the right granted was so extensive that it deprived the landlord of any reasonable use of the land for any other purpose. He concluded that the words of the grant only prevented the landlord from doing that which would be inconsistent with the tenants' ability to park in their parking spaces and that the tenants therefore enjoyed an easement over the relevant car parking spaces.
Did the lease reserve a right for the landlord to build on the cark park spaces or to change the designated parking spaces?
Cooke J held that the lease did not reserve a right for the landlord to build on the car parking spaces. Since an express right was conferred to use the car parking space, only clear language would indicate that the right could be overridden and the language used in the lease did not clearly have that effect. Indeed, the lease covenants tended to refer to "the Premises" rather than to the other rights granted.
Cooke J also found that the landlord did not have any implied right to change the designated parking spaces, pointing out that a servient owner does not generally have a right unilaterally to extinguish an easement over one area of land on provision of an equivalent easement over another area. While an easement can be granted in terms which expressly or impliedly permit variation, there was no such right of variation in the lease and no basis existed for such a right to be implied. In response to the landlord's submission that alternative spaces would be equally convenient for the tenants, Cook J said:
"The alleged lack of inconvenience to the dominant landowner is not a reason to imply a right to change what has been granted to him. Nor is it relevant to say that he would have had no reason to require the use of any particular space and that the 'essence' of the right granted is merely to park somewhere; the right granted is to park in a particular space and it simply cannot be construed as being only to park in any place from time to time designated by the landlord".
Remedy: injunction or damages?
Cooke J granted the tenants' application for an injunction against the proposed development. He stated that the landlord's actions, by fencing off the car parking spaces and proposing to build on them, constituted an entire abrogation of the tenants' express easement to park in those spaces. The injury was not trivial in terms of its effect on the tenants' rights but instead quite significant; the right to use the parking spaces was estimated by the landlord's own expert to be worth about £20,000 on the sale of a long leasehold.
Cooke J went on to say that, if his conclusion on remedy was wrong, then the appropriate basis for determining the quantum of damages was the "release fee" basis, i.e. the sum which would have been negotiated between willing parties for the right to do what could not be done without the tenants' consent. Such damages would be compensatory – splitting the value generated by the development equally between the landlord and tenants (as neither party could have been able to proceed without the other) after deducting 25% of the value for the landlord's profit. He estimated that such damages would be £517,000 to be divided between the tenants.
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