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Love Thy Neighbour or Pay the Price?

Whilst February 14th is memorable and amorous for some, Valentine's Day 2022 was a lesson in “loving thy neighbour” for the parties involved in Prime London Holdings 11 Limited v Thurloe Lodge Limited [2022] EWHC 303 (Ch) as the first Judgment was handed down from the High Court in relation to the Access to Neighbouring Lands Act 1992 (“ANLA 1992”). It is a testament to the Act that it has taken almost 30 years to reach the attention of the High Court.

The Claimant “Prime” is the owner of Amberwood House which is described, for the purpose of the ANLA 1992, as the dominant property. Amberwood House, a somewhat famous property, is located in South Kensington and is nearing the end of a high-end redevelopment project, part of the project included removing the interior walls and fittings and digging down two or three levels of basement before it was luxuriously outfitted.  

The Defendant “Thurloe” owns the adjacent, servient property – Thurloe Lodge, which is also the subject of a major redevelopment and refitting project and is at the “shell and core” stage awaiting the internal refit works.  

Between the two properties is a short, private road, which is owned by a sister company of the Claimant.  

The excavation of the basements of both properties caused cracking in the rendering on the north wall of Amberwood House. The rendering needed to be removed and access was granted by the Defendant to the Claimant, over a narrow passageway (“the Passageway”) which was the only way the works could be undertaken. The rendering removal was finished but the re-rendering works had yet to begin. 

Until mid-2019 both parties were fully cooperative, however (as you may have guessed given that the case ended up in the High Court) there was a fall out due to a dispute about rights over the private roadway. This dispute was being case managed alongside the current case at one point.  

As a result of the dispute and breakdown in the party's relationship, the Claimant was ordered off the Defendant’s land effectively preventing the re-rendering and subsequent repainting of the north wall. 

The Claimant issued CPR Part 8 proceedings to request access over the Passageway. Formal Particulars were not served with the Part 8 claim, but a document entitled “Draft Particulars of Claim”, with a signed statement of truth, was provided alongside a method statement (“Method 1”) and description of works prepared by the proposed scaffolders, risk assessment and rescue plan.  

Since serving the claim form the method proposal for the works was amended and Method 2 was put forward to the Defendant to counteract objections raised. In essence, Method 2 removed the need to access Thurloe Lodge, but both methods resulted in the Defendant losing the use of the Passageway for 3 or 4 days at the start and the same again at the end of the works whilst scaffolding was erected. During the works, the Claimant argued, the Defendant had access to the Passageway at ground floor level – the Defendant disputed this and robustly resisted the claim under the ANLA 1992.  

Deputy District Judge Nicolas Thompsell commented, at paragraphs 19 of his Judgment, that “[t]he evidence to be considered in this matter was substantial and these whole proceedings have involved a level of effort on behalf of the parties that seems out of proportion with the importance and value of the mater in question. In normal circumstances it would be hoped that neighbours would be able to reach an accommodation on this sort of matter without spending four days in the High Court as well as producing some 14 witness statements and at least four expert reports”. Whilst the value of both properties involved was extremely high, the disproportionate resources and costs of pursuing the case to the High Court seems unfathomable. The hearing also included a site visit by the Judge chaperoned by the two instructed Barristers. DDJ Thompsell did acknowledge that there is a level of complexity in the case as access over the Passageway could affect the Defendant’s work schedule, however he acknowledged, at paragraph 20 of his Judgment, that “the parties could work harder to reach an agreement on at least some matters so as to limit the use of the court’s time, and the expense to themselves”. A clear reminder of the importance of engaging in Alternative Dispute Resolution and open communication.  

The claim is made under section 1 of the ANLA 1992 which is drafted in such a way that requires the Court to consider the following five questions, in this particular order: 

1. Are the works reasonable and necessary for the preservation of the whole of any part of the Claimant’s land?

2. Would it be impossible, or substantially more difficult, to carry out the works without entry to the other land?  

An Order should only be granted if the answer to questions 1 and 2 is “yes”. If the answer to either question is “no” the Court has no jurisdiction to make an access Order. If the answer to both is positive the Court will proceed to consider: 

3. If the Order is granted, would the respondent (the owner of the servient land) or any other person suffer interference with, or disturbance of, their use or enjoyment of the servient land?

4. If the Order is granted, would the respondent or any other person occupying the land suffer hardship? 

If the answer to both 3 and 4 is “no” then the Order should be granted with the Judge retaining a discretion as to the terms of the Order. If the answer to either 3 or 4 is “yes” the Court must proceed to consider: 

5. Would the interference, disturbance or hardship occasioned by reason of the entry onto the land occur to such a degree that it would be unreasonable for the Court to make the Order?  

In this case, the parties were in dispute on 4 out of the 5 questions, only agreeing on question 2 – the need to utilise the Passageway on the Defendant’s land was necessary.  

Particular consideration was given to the ambiguity in section 1 (4) of the ANLA 1992, under the heading of question 1, whereby the interpretation of “basic preservation works” was considered. The Judge had to decide whether the replacement of the render could be considered “renewal, repair or maintenance” facing opposition from the Defendant who averred any works within a large-scale redevelopment project could be broadly described as such. Simply, but for the excavation/building works, would it have been necessary to repair, remove or replace the render on the north wall? The answer is, possibly not, but the Judge averred that the redevelopment was not the principal cause of the requirement to re-render as the nature of render is that, from time to time it will crack and need maintenance. The Court accepted, therefore, that the works proposed were considered to be “basic preservation works”.   

Consideration was given to the necessity of the works, and it was held that, even if there are some aesthetic elements to the works (in addition to the need to provide damp proofing protection), they were considered reasonably necessary. Although it was not considered reasonably necessary for the work to be undertaken immediately and the original request for works to begin 2-week post Order was rejected, given the case was heard in January and the works would begin in April or May.  

The interpretation of “use or enjoyment” of the land was given a broad meaning and, despite the Claimant’s assertion that the land was currently housing two large redevelopment projects and was in essence a building site, granting access has the potential to disturb the Defendant’s use or enjoyment of their land.  

Given that question 3 was answered in the affirmative, question 5 would need to be considered, thereby reducing the importance of question 4 in relation to “hardship”. Hardship was not originally part of the Defendant’s case, and some consideration is given to a broader meaning of the term, over and above financial hardship. The Judge had, as a result of question 3, deemed that the Defendant would receive some financial compensation as a result of the Access Order being granted, therefore negating financial hardship. The Judge was not convinced that the Order would give rise to any further hardship in this case, however that does not prevent the Court considering a broader interpretation of “hardship” should such a case reach the Courts again.  

Moving onto the final consideration some discussion was had about the approach that should be taken when considering the degree of hardship caused by granting the Order – should it be generic or based on the specific circumstance of the current application? The Judge reminds us that the ANLA 1992 gives a wide discretion to make an Order subject to conditions which may lessen the impact of the Order, therefore considering the work proposal in isolation of each case may not be wholly appropriate. If conditions can be ordered, that reduce the impact on the servient land, the hardship may be reduced in turn by reducing the financial compensation. If the Court did not consider a wider interpretation they may over or under compensate the servient landowner by basing the decision solely on the application.  

In his Judgement DDJ Thompsell considered the Claimant has offered reasonable alternative methods proposals and adopted a suggestion by the Judge that the Defendant be allowed to accommodate their contractors’ welfare cabin partially on the Claimant’s land. In stark contrast at paragraph 92 the Judge stated that the Defendant has found “…problems rather than solutions” another reminder of the need for open engagement in early negotiation and ADR. The Judge goes a step further in stating, at paragraph 93 that parties should work cohesively to reduce any detriment caused by granting access over the servient land and “[a] respondent that fails to engage on this risks losing the sympathy of the court and risks facing consequences in costs”.  

After some discussion, it was held that the Claimant was granted an Access Order pursuant to ANLA 1992. Significant discussions as to compensable loss and risk were considered in the Judgment including the insurance cover for damage, and it was held that:  

a) If the Claimant commenced works before the Defendant’s building project was signed off as complete, compensation would be based on a percentage of the Defendant’s contractor’s estimate of the additional costs plus an amount equal to any deductible on the Claimant’s insurance.  

b) If the works commenced after the end of the Defendant’s works compensation would be an amount equal to any deductible on the Claimant’s insurance premium.   

This case offers a further gem. The ANLA 1992 only allows for consideration (akin to a “license fee”) or wayleave payment if the land is non-residential. In this case the Defendant argued the dominant land was not residential whereby the Claimant asserted that Amberwood House had been residential for some 80 plus years prior to the redevelopment and was, therefore, residential land. The Judgment considers legislative interpretation over the decades in comparison to intent during the drafting process along with the interpretation of “residential land”, “dwelling” and “dwellinghouse” before concluding that interpretation of these three terms may differ depending on the matter being considered. In this case it was held that, despite a period of inoccupation Amberwood House should be regarded as residential land for the purpose of the ANLA 1992 and therefore there is no license fee payable. The Judge does give an indication of the method that could be adopted in relation to a license fee, should one be payable as a result of an Access Order giving consideration to the financial advantage of the Order to the applicant and the degree of inconvenience likely to be caused to the respondent – one must wonder whether the latter would change if there was no financial compensation for a “hardship” when the terms of the Order are framed. 

A summary of the terms Ordered in this case can be found at paragraphs 243 - 260 of the Judgment and provide a good insight into the detail and balance afforded in this case. 

Deputy District Judge Thompsell finishes his Judgment by confirming that this case proves that he Biblical principle of “lovey they neighbour” is one that neighbouring properties should heed as the case in question involved a huge effort and cost to both sides to provide a result which could have been obtained with e little give and take and goodwill between parties if they had been able to agree terms without the Court’s intervention. 

If you have any questions about access, access licenses or access disputes or would like to know more about how we can help you with residential leasehold disputes please contact Emma Bush on emmabush@brethertons.co.uk.