Risegold Ltd v Escala Ltd

The scope of an easement of entry is determined by construing the grant as a whole, in its factual context and having regard to its underlying purpose. Terms such as rebuilding and renewal do not automatically bear their meanings in planning legislation or leasehold covenants. A right to enter for rebuilding may extend beyond reproducing existing structures and can support demolition and lawful redevelopment with similar or different buildings, or demolition without replacement. Safeguards concerning necessity, minimum disturbance, exclusion of vehicles and making good damage protect the servient owner while allowing lawful use of the dominant property.

The appellant owned freehold units adjoining land owned by the respondent. A 1993 transfer granted a right, on prior notice, to enter the respondent’s yard for maintenance, repair, rebuilding or renewal of the appellant’s property. The appellant obtained planning permission to demolish the existing industrial buildings and construct a substantially larger mixed-use development. The High Court dismissed its claim for a declaration that the proposed works fell within the easement, holding that they were not rebuilding or renewal: [2008] EWHC 21 (Ch). The central issue on appeal was the proper construction and scope of the entry provision.

The Court of Appeal unanimously allowed the appeal. Lord Justice Mummery gave the leading judgment, with Lord Justice Keene and Lady Justice Arden agreeing.

1. Construction in context. The court had to construe the transfer for itself. The easement had to be read as a whole, in its factual and historical context, and having regard to the underlying purpose for which access was granted. The meanings of rebuilding in planning legislation or positive leasehold covenants were not determinative.
2. Meaning of the property. The reference to the property was not confined to the existing buildings. It included the land and buildings together. The parties could have contemplated changes in the character of the area and in the buildings constructed on the land.
3. Rebuilding. Rebuilding was capable of a broad and flexible meaning. It included demolition of the existing buildings in the course of rebuilding and was not limited to reproducing them. The easement could therefore support demolition followed by no replacement, similar buildings or different buildings, provided the entry was necessary for lawful operations to the property.
4. Protection of the servient owner. The requirements of necessity, minimum disturbance and inconvenience, exclusion of vehicles, and prompt making good of damage limited the manner of exercising the right. They did not restrict the permitted purpose to works producing a similar building. The narrower construction would create uncertainty and impractical consequences inconsistent with the purpose of the easement.
5. Renewal. Alternatively, if rebuilding did not cover the works, renewal would do so. The combination of maintenance, repair, rebuilding and renewal suggested an ascending range of operations, with renewal capable of covering developments outside the scope of rebuilding.

The proposed redevelopment was therefore within the right of entry as rebuilding or renewal under paragraph 5 of Schedule 1 to the transfer.

1. Court of Appeal (Civil Division): The appeal was allowed unanimously. The proposed redevelopment fell within the easement as rebuilding or renewal under [2008] EWCA Civ 1180.
2. High Court of Justice, Chancery Division: Mr Bernard Livesey QC, sitting as a Deputy Judge, dismissed the claim for a declaration that the proposed works were covered by the easement: [2008] EWHC 21 (Ch).