Relocation amounted to derogation

The High Court has held that a parking agreement permitting a landowner to relocate parking spaces did not allow him to allocate different spaces hundreds of metres away. To do so was in derogation from the grant, it said.

Derogation from grant is the principle that a person, having conferred a benefit on another, cannot do anything that substantially deprives that other of the benefit. Essentially, having given something with one hand, you cannot take it away with the other.

Facts

Mr Nolan and Mr Carnegie owned adjacent properties at Adhurst St Mary in Hampshire. Mr Carnegie bought his property, Tower Court, by auction and shortly after his purchase he and Mr Nolan entered into a deed of easement for which Mr Carnegie paid £60,000. The deed, among other rights, granted Mr Carnegie's property a right to park five vehicles at the parking area on Mr Nolan's land.

The parking area was defined as 'the area shaded blue on the plan or such other area as the grantor may designate from time to time'. The plan showed the parking area for the five vehicles to be just next to Tower Court.

Mr Nolan subsequently relocated the spaces and claimed that he was entitled to do so, pointing out that the definition of the parking area meant that he could do so and it did not specify where to, or contain any wording of limitation. In fact, he re-designated the spaces nearly 400 metres away from Tower Court.

Mr Carnegie claimed this to be in derogation from the grant of the easement. In support of his case, he relied upon the judgment of Neuberger J (as he then was) in Platt v London Underground Ltd [2001] 2 EGLR 121 who recited the various principles of derogation from grant including the following:

'in order to determine whether a specific act or omission on the part of a landlord constitutes derogation from grant, it is self-evidently necessary to establish the nature and extent of the grant'.

Also 'the exercise of determining the extent of the implied obligation not to derogate from the grant involves identifying what obligations if any on the part of the Grantor can fairly be regarded as necessarily implicit, having regard to the particular purpose of the transaction when considered in the light of the circumstances subsisting at the time the transaction was entered into.'

Decision

The judge held that Mr Nolan had indeed acted in derogation of grant and so the re-designation of the parking spaces was invalid and ineffective. In a very robust judgment he said that Mr Nolan's position was 'nothing short of ridiculous' and was 'a cynical attempt to try and extract more money from Mr Carnegie'.

The original five parking spaces were next to Tower Court in order to provide free parking at the property. The re-designation was as far away as was conceivable and was of virtually no benefit because street parking was available. Its distance effectively rendered the grant of the easement worthless and it would have been obvious to both of the parties that that was the case.

He concluded that it was implicit in the principles of non-derogation and the deed as a whole that any re-designation should have substantially the same convenience as the existing designation.

Comment

Derogation is a principle that has a particular relevance to real estate matters and especially in the area of landlord and tenant, but cases about derogation from grant are rare. Conversely, rights granted that permit relocation are common.

Although this decision is at High Court level only, we expect it to be of persuasive authority in informing future discussions and negotiations.

Carnegie v Nolan 19 March 2018 (unreported)