Nationwide Building Society v James Beauchamp (A Firm)

A right of way carries ancillary and incidental rights necessary to make the grant effective. The extent of those rights depends on the terms and circumstances of the grant, including any construction standard specified by the parties. Where a road was intended to be completed and adopted to a defined standard, the grantee may enter the servient land and construct it to that standard unless the grant contains a contrary indication. The right is not confined to the minimum works needed for immediate passage. A mortgagee taking possession of the dominant land has the same ancillary right as the mortgagor.

Nationwide retained a firm of solicitors in connection with mortgage advances for ten self-build plots. The estate road was to be constructed and adopted as a public highway, but it was built only to base-course standard and was never adopted. After the borrowers defaulted and the relevant companies became insolvent, Nationwide alleged that its mortgage security was defective and brought claims in negligence, contract and fiduciary duty.

On a preliminary issue, Grigson J held that the borrowers could construct only an effective carriageway and that neither they nor Nationwide had a right to complete the road to adoption standard. The appeal concerned the scope of the ancillary rights arising from the granted right of way and, alternatively, the effect of contractual provisions in the transfers.

Appeal allowed with costs. Peter Gibson LJ gave the judgment, with which Mummery LJ and Rix LJ agreed.

1. Immediate grant. Clause 1(a) of each Building Plot Transfer, construed against the transaction as a whole, conferred an immediate right of way over the road land. The description of the roads and accesses as constructed or to be constructed, together with the commercial purpose of acquiring the plots, showed that the right was not contingent on prior construction.
2. Ancillary right. A granted right of way carries such ancillary and incidental rights as are necessary to make the grant fully effective. The extent of the right must be determined from the particular circumstances and the presumed intention of the parties. Newcomen v Coulson (1877) 5 Ch D 133 did not confine the grantee to the bare minimum works needed for passage. Mills v Silver [1991] Ch 271 supported the wider approach applicable to an express grant.
3. Construction standard. The parties had specified that the estate road was to be completed to adoption standard. Nothing in the transfers negated the ancillary right to enter the road land and carry out works to that standard. The fact that the borrowers did not own the road land or could not themselves procure adoption did not prevent them from making the granted access fully effective.
4. Nationwide’s position. It was not disputed that Nationwide, on taking possession of the plots, acquired the like right to enter the road land and complete the roads, footpaths and accesses to adoption standard.
5. Contractual arguments. It was unnecessary to decide whether the transfers independently conferred the claimed contractual rights. The court indicated that reliance on the indemnity-only covenant was difficult without a demand for performance of the underlying obligation, and that the general wording of clause 3 was doubtful as a source of the specific entry right given to Amberdown.

The order of Grigson J was set aside, and a declaration was made that the borrowers, and Nationwide upon taking possession, had the right, if necessary, to enter the road land and construct the roads, footpaths and accesses to adoption standard.

• Court of Appeal (Civil Division) — In [2001] EWCA Civ 275, the appeal was allowed with costs. The order below was set aside and the stated declaration was made.
• High Court, Chancery Division — Grigson J, by order dated 26 May 2000, determined the preliminary issue in favour of Nationwide’s narrower construction of the rights arising from the documents.