Beazer Homes Ltd v County Council of Durham

A grant of a right to enter land, construct a road and have it adopted as a highway maintainable at public expense carries an implied obligation on the grantor not to frustrate that right. Where the grantor owns land needed for adoption, the obligation may require it to consent to a reasonable adoption proposal or refrain from objecting. The implication is justified where it is necessary to give effect to the transaction and is consistent with the express terms. It may involve limited positive cooperation and need not itself be an easement. The grant does not bind the highway authority to adopt the road, but it governs the parties’ conduct towards that process.

In 1979 Beazer Homes transferred 4.75 acres to Durham County Council for a proposed school. The transfer included rights over a hatched area to construct a road, connect it to estate roads and have it adopted as a highway maintainable at public expense.

The school was not built and the Council contemplated residential development. The High Court held that the transfer implied an obligation on Beazer to cooperate with the adoption process when the Council constructed the road. Beazer appealed, arguing that the express terms exhausted its obligations, that private rights were sufficient, and that it could object under the statutory street-works procedure. The central issue was whether the implied obligation was necessary and consistent with the transfer.

Appeal dismissed. The Court of Appeal held that the transfer implied an obligation requiring Beazer to cooperate with the adoption of the road.

1. The starting point was the express grant in paragraph 5 of Schedule 1: the Council had the right to enter the hatched area, construct a road and have it adopted as a highway maintainable at public expense. The parties could not bind the highway authority to adopt the road, but, as between themselves, the grant proceeded on the basis that the Council was entitled to pursue adoption.
2. The statutory routes under sections 39(1), 40(2)(b) and 202 of the Highways Act 1959, together with section 11(1) of the Highways (Miscellaneous Provisions) Act 1961, showed that the owner's consent or non-objection might be necessary. Although an objection under section 202 might be overruled, the result would remain uncertain. The corresponding provisions of the Highways Act 1980 were sections 37, 38 and 228.
3. The implication satisfied the principles concerning implied terms discussed in Attorney General of Belize v Belize Telecom [2009] UKPC 10 and Philips Electronique Grand Public SA v British Sky Broadcasting Limited [1995] EMLR 462. Reasonableness was necessary but insufficient; the term also had to be necessary and consistent with the express provisions. Without it, Beazer could grant the right with one hand and substantially obstruct its exercise with the other.
4. The express wording requiring the party constructing the road to do what was necessary for adoption did not exclude an implied obligation where the Council constructed it. Nor was the implication inconsistent with the separate express covenant concerning adoption of the sewers under section 18 of the Public Health Act 1936. That covenant was needed because no equivalent obligation otherwise applied to the sewers.
5. The obligation was limited. Beazer had to join a reasonable proposal under sections 37 or 38, or refrain from objecting under section 228. It was not an easement, but a necessary concomitant of the rights granted, and involved no onerous or complicated positive action. The decision in Re Cadogan and Hans Place Estate Limited (Willis' Claim) (1895) 11 TLR 477 was distinguishable because the necessary adjoining land there could have been acquired by either party.

1. Court of Appeal (Civil Division): Appeal dismissed. [2010] EWCA Civ 1175
2. High Court of Justice, Chancery Division, Newcastle upon Tyne District Registry: HHJ Langan QC held that the transfer implied an obligation on Beazer to cooperate with the road-adoption process and made an order dated 8 February 2010.