Mainline Pipelines Limited v Thomas Derrick Phillips & Anor

On a summary judgment application involving the construction of a lease, the court may decide a short point of construction where it has the necessary evidence and the parties have had an adequate opportunity to argue it. Contractual meaning is assessed objectively, principally by the language used in its documentary, factual and commercial context.

Ancillary rights granted over the grantor’s land may create an easement over land separate from the demised land. Such rights are not subject to additional implied preconditions unless the proposed terms are obvious or necessary to give business efficacy. Compensation for damage is payable after the damage has occurred where the lease so provides.

The claimant operated a multi-fuel pipeline laid beneath the defendants’ farmland under a 99-year lease granted in 1972. It sought summary judgment and a final injunction after the defendants refused access to the wider field for inspection and repair unless compensation and other conditions were agreed in advance.

The defendants disputed the construction of the lease. The central issues were whether the ancillary rights extended beyond the demised pipeline strip, whether they formed a valid easement, whether additional consents or agreements were conditions precedent, and whether compensation had to be agreed or paid before entry.

1. Summary judgment. The claimant bore the burden under CPR rule 24.2. The court had to decide whether the defendants had a realistic, rather than fanciful, prospect of successfully defending the claim and whether there was any other compelling reason for a trial. Because the dispute concerned a short point of construction, and the available evidence and opportunity for argument were adequate, the court was entitled to decide the issue summarily: ED&F Man Liquid Products Ltd v Patel [2003] EWCA Civ 472 and Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch).
2. Construction. Applying the objective approach summarised in ABC Electrification Ltd v Network Rail Infrastructure Ltd [2020] EWCA Civ 1645, the words granting rights over “the land of the Grantor” differed from the words demising the defined strip. They therefore referred to separate land. The ancillary rights extended over the remainder of the Field, but not over other parts of the defendants’ farm.
3. Implied terms and compensation. The lease contained no express requirement for the additional consents, confirmations, fencing arrangements or agreements proposed by the defendants. Such terms could be implied only if obvious or necessary to give business efficacy. They were neither. Clauses 2B and 2D(i) contemplated compensation and indemnity for damage, costs, claims or liabilities arising from the works, so compensation could not be required in advance.
4. Easement. The ancillary rights benefited the demised strip and burdened the remainder of the Field. They satisfied the requirements of a valid easement: separate dominant and servient tenements, accommodation of the dominant tenement, different ownership, sufficient certainty, no ouster of the servient owner, and no positive obligation on that owner.
5. Disposition. The defendants had no real prospect of successfully defending the claim and there was no compelling reason for trial. Summary judgment was granted to the claimant, involving a final injunction. The precise terms of the order were reserved.