Ipsofactoj.com: International Cases [2005] Part 10 Case 7 [SCIre]


SUPREME COURT OF IRELAND

Coram

William Bennett Construction Ltd

- vs -

Greene

KEANE CJ

MURRAY J

GEOGHEGAN J

25 FEBRUARY 2004


Judgment

Keane CJ

(delivered the judgment of the court)

  1. The defendants were the owners in the year 2000 of a plot of land at Clonroche, Co. Wexford. They had originally intended to develop the land for housing and to that end the first named defendant applied for, and was granted, an outline planning permission for the erection of eighteen dwelling houses. The decision to grant outline permission contained a condition that it was for the housing development as shown on the site layout plan received by the planning authority. On that plan a drain for the disposal of sewage was shown running in a south-easterly direction to connect with the foul water sewer in the road adjoining the site.

  2. Because of family circumstances, the defendants decided not to proceed with the development and to sell the site with the benefit of the outline permission. They also decided, however, to retain part of the site as shown on the site layout plan. The drain for the disposal of the sewage was shown on the site layout plan as crossing that land. That is what has given rise to the present litigation.

  3. Mr. William Bennett (the proprietor of the plaintiff / appellant company and hereafter referred to as "the plaintiff") was interested in acquiring the site being offered for sale by the defendants. He met the first named defendant towards the end of January 2000 and it is not in dispute that they agreed at that meeting on a purchase price of 250,000.00. It is also accepted by the parties that, at that meeting, the plaintiff made it clear that he would not be interested in proceeding with the purchase unless what is usually referred to as a "full planning permission" was available in respect of the proposed housing development. The draft contract for sale of the land was sent by the defendants' solicitors to the plaintiff's solicitors on the 20th April, 2000 and returned to them signed on behalf of the plaintiff on the 28th April. Condition 4 of the special conditions provided that

    The property is subject to the purchaser obtaining planning permission for the erection of eighteen dwelling houses on the subject property, the closing date shall be one month from the grant of planning permission. In the event that the said planning permission has not issued within six months from the date hereof either party shall be entitled to rescind this contract and the purchaser will be refunded his deposit in full without interest costs or compensation.

  4. Since there was already available an outline permission for the erection of eighteen dwelling houses on the lands being sold, it is accepted by both parties that the reference to the purchaser obtaining "planning permission" was either to an approval obtained by him consequent on the outline permission or a "full" permission (i.e. not an outline permission).

  5. Under the heading "Documents Schedule", two documents were referred to in the contract, i.e. "folio 11353 F", in which the lands being sold were registered, and "Outline planning permission register reference 991372". Paragraph 6 of the General Conditions provided that

    The documents specified in the documents schedule or copies thereof have been available for inspection by the purchaser or his solicitor prior to the sale. Where any of the subject property is stated in the particulars or in the special conditions to be held under a lease or to be subject to any covenants, conditions, rights, liabilities or restrictions, and the lease or other document containing the same is specified in the documents schedule, the purchaser, whether availing of such opportunity of inspection or not, shall be deemed to have purchased with full knowledge of the contents thereof, notwithstanding any partial statement of such contents in the particulars or conditions.

  6. On the 8th June, 2000, the contract was executed by the defendants. On the 17th November, 2000 the planning authority issued an approval for the development of the eighteen houses.

  7. The sale was completed by the execution of a transfer of the land and the payment of the purchase money on the 31st January, 2001. Before that happened, however, the question as to whether the plaintiff was required to pay interest on the balance of the purchase money outstanding was discussed directly between the plaintiff and the first named defendant. The plaintiff, having been informed through his solicitors that the first named defendant was requiring the payment of the interest, there was a telephone conversation between them on the 1st or 2nd February at which the first named defendant confirmed to the plaintiff that he would have to pay the interest and, in response to a query from the plaintiff, also made it clear that he was not prepared to allow the drain for the disposal of the sewage to cross the land retained by him as shown on the site layout plan lodged for the purpose of obtaining the outline permission.

  8. The defendants having maintained their attitude that they were not prepared to allow the plaintiff to lay a drain for the disposal of the sewage across the land retained by them, the present proceedings were issued. In the statement of claim, the plaintiff claimed inter alia an injunction restraining the defendants from preventing the plaintiff's exercise of what was described as the "way leave" set out on the site layout plan. A defence having been delivered on behalf of the defendants denying that the plaintiff was entitled to any of the relief claimed, the action came on for hearing before O'Higgins J. In the course of evidence, the plaintiff said that, at the meeting in January 2000, where he and the first named defendant had agreed on the sale of the land for the specified sum and that it should be subject to full planning permission, the first named defendant showed him the site layout plan. He said that he indicated to the defendant where the plan showed the entrance to the site to be and where the sewage went out and the first named defendant agreed that that was what the plan showed. The first named defendant in his evidence denied that there was any discussion as to the sewage at that meeting.

  9. There was also produced in evidence a record of an attendance by the solicitor for the first named defendant on his client dated the 8th March, 2000 which records:

    [The first named defendant] said in the outline permission the sewer pipe comes through the supermarket property onto the main street.

    He said that he wants the builder to take the sewage through the opening / entrance.

  10. The plaintiff in his evidence said that the cost of bringing the sewage out through the main entrance would be in excess of 120,000.00 and that he would not have bought the site if he had known that the defendants would not permit him to dispose of the sewage in the manner indicated on the site layout plan.

  11. The trial judge, in his judgment, said that he preferred the evidence of the first named defendant to that of the plaintiff as to what had transpired at the meeting towards the end of January 2000 where the price for the land was agreed and that he was, accordingly, satisfied that there was no discussion as to the sewage at that meeting. He rejected the submission advanced on behalf of the plaintiff that the inclusion of the planning permission as one of the scheduled documents in the contract for sale meant that the contract was subject to an implied condition that the defendants would grant the plaintiff the way leave in question across the retained land and the further submission that the defendants in refusing to grant such a way leave were derogating from their grant of the land to the plaintiff, thereby entitling the plaintiff to the relief sought. From that judgment, the plaintiff has now appealed to this court.

  12. At the outset, Mr. George Brady S.C. on behalf of the plaintiff accepted that this court could not disturb the finding of the trial judge as to the credibility respectively of the plaintiff and the first named defendant. He submitted, however, that the trial judge had erred in law in concluding that the actions of the defendants in declining to allow the plaintiff to dispose of the sewage in the manner indicated in the site layout plan had not derogated from their grant of the land. He said that where, as here, the land had been sold for a specific purpose known to both parties, i.e. the development of the land as shown on the site layout plan on the basis of which the outline permission had been granted, and the uncontradicted evidence established that it would be prohibitively expensive for the plaintiff to develop the land in any other way so far as the disposal of the sewage was concerned, the conduct of the defendants in refusing to allow the development proceed in that manner constituted a derogation from the grant of the land. He cited in support of this submission the decision of Barron J., sitting as a High Court judge, in Connell v O'Malley (unreported; judgment delivered 28th July, 1983). He also relied on the provisions of s. 6 of the Conveyancing Act, 1881.

  13. Alternatively, Mr. Brady submitted that, in the circumstances of this case the doctrine of promissory estoppel applied and that the defendants, having represented to the plaintiff that the line of the sewage disposal would cross the land retained by them, should not be permitted to act in a manner inconsistent with that representation where it had been acted on, to his detriment, by the plaintiff, citing Daly v Minister for the Marine [2001] 3 IR 513.

  14. On behalf of the defendants, Mr. Patrick Keane S.C. submitted that the defendants had agreed to no more than the transfer of the land described in the contract for sale for the specified price and did not agree to grant any way leave over the retained land. Since there was no way leave in existence at the date of the contract and the defendants had not in any way obstructed the exercise by the plaintiff of an existing easement or quasi-easement, there was no room for the application of the principle that a grantor should not be allowed to derogate from his grant. As to the claim based on promissory estoppel, Mr. Keane submitted that, having regard in particular to the finding of the trial judge as to the conversations between the plaintiff and the first named defendant and the undisputed evidence that the defendants had never promised that they would allow the plaintiff to lay a pipe across the retained land for the purpose of disposing of the sewage, that doctrine had no application.

  15. As to the first submission advanced by Mr. Brady, there is little modern Irish authority on the principle that a grantor cannot derogate from his grant, although the law is helpfully reviewed by Barron J. in Connell v O'Malley., as yet unreported but noted at (1984) ILRM 563. Since Mr. Brady strongly relied on that judgment, the facts of the case should first be summarised.

  16. The plaintiff had purchased a site at Navan from the defendant which had the benefit of outline planning permission for the erection of five dwelling houses. The site was formerly part of the defendant's residential farm and was approached by a private laneway over his land. The plaintiff believed that this laneway would be taken in charge by the Meath County Council. There was protracted litigation between the parties and the defendant erected a gate which could close off the laneway, as a result of which the local authority refused to take it in charge. The plaintiff claimed an injunction restraining the defendant from maintaining any obstruction on the laneway on the ground that he was acting in derogation of his grant.

  17. Barron J. found that, while the site could still be used for the erection of five dwelling houses, they would be very difficult to sell unless the laneway was taken in charge. Since the defendant knew that the site was being purchased for a housing development, he concluded that the only reasonable inference from the defendant's conduct was that he was deliberately obstructing the laneway so as to ensure that the site would not be developed. In these circumstances, he held that the defendant's conduct amounted to an attempt to derogate from his grant which should be restrained by the court.

  18. Barron J. stated the law to be as follows:

    The doctrine of derogation from grant imposes implied obligations which arise when the owner of land disposes of part of it while retaining the balance. The most usual application is in relation to easements, but it is not limited to the creation of easements by implied grant. The obligations which are implied depend upon the particular nature of the transaction and arise from the presumed intention of the parties.

  19. Having referred to a contention on behalf of the defendant that the restriction which the plaintiff was seeking was one which he could have ensured was reserved to him by the contract of sale, Barron J. said, in a passage which was strongly relied on by Mr. Brady:

    When there are quasi-easements, then, on a sale of part of the land, the grantee does not have to contract specifically to retain the benefit of such rights for the benefit of the land granted, because they are implied. But, if the grantor wishes to retain quasi-easements for the benefit of the land retained, he must specifically reserve them. It is correct that the purchaser must protect himself specifically when the grantor could not anticipate that he would require such protection, but that is not the case here. I reject this defence.

  20. That, however, was said by the learned judge in a case where a defined right of way over land retained by the grantor giving access to the land transferred to the grantee was in existence at the date of the grant and its obstruction by the grantor rendered the land granted significantly less capable of development.

  21. That is patently not the case here. At the time of the sale, there was not in existence an easement in the nature of a way leave which, when part of the land was sold, remained in existence as a quasi-easement for the benefit of the lands sold.

  22. The law was thus stated by Thesiger L.J. in the leading case of Wheeldon v Burrows [1878] 12 Ch.D 31:

    We have had a considerable number of cases cited to us, and out of them I think that two propositions may be stated as what I may call the general rules governing cases of this kind. The first of these rules is, that on the grant by the owner of a tenement of part of that tenement as it is then used and enjoyed, there will pass to the grantee all those continuous and apparent easements (by which, of course, I mean quasi-easements), or in other words, all those easements which are necessary to the reasonable enjoyment of the property granted, and which had been and are at the time of the grant used by the owner of the entirety for the benefit of the part granted.

    [emphasis added]

  23. That was stated by Ross J. in the Irish case of Head v Meara [1912] 1 IR 262 to be a specific application of the principle that a man must not derogate from his own grant.

  24. In a modern Irish textbook on the subject, The Law of Easements and Profits Prendre by Peter Bland, the law is stated clearly and succinctly as follows at para 1206

    For the quasi-easement (or accommodation) to be converted into an easement on the severance of the quasi-dominant and quasi-servient tenements, the accommodation must be capable of existing as an easement and it must have been used at the time of the grant by the grantor for the benefit of the property granted over the property retained.

  25. The defendants in this case had never at any stage used any part of their land for the disposal of sewage by means of a pipe connecting with the main sewers of the local authority. They did no more than indicate in the site layout plan lodged with the application for permission that that was how they would propose to dispose of the sewage, in the event of permission being granted for the development and the development proceeding. There was, accordingly, no easement in existence being used at the time of the grant by the grantor for the benefit of the property granted over the property retained and hence no room for the application of the doctrine that the grantor cannot derogate from his grant.

  26. Section 6 of the Conveyancing Act, 1881, on which Mr. Brady also relied, provides that

    A conveyance of land shall be deemed to include, and shall by virtue of this Act operate to convey, with the land, all buildings, erections, fixtures, commons, hedges, ditches, fences, ways, waters, water courses, liberties, privileges, easements, rights, and advantages whatsoever appertaining or reputed to appertain to the land, or any part thereof or at the time of conveyance demised, occupied, or enjoyed with, or reputed or known as part or parcel of or appurtenant to the land or any part thereof.

  27. Professor J.C.W. Wylie, in the second edition of Irish Conveyancing Law, describes this as one of the so-called "word saving" provisions in the Act. He observes that, while the section is often invoked to establish in favour of the purchaser the existence of easements over land retained by the vendor, it does not enlarge the rights to which the purchaser is entitled under the contract for sale.

  28. I am satisfied that this is a correct statement of the law and that, in the case of easements, such as way leaves, the effect of the section is to ensure that any such easements in existence and appertaining to the land at the time of the conveyance pass with the conveyance. Moreover, as was made clear by Lord Wilberforce in Sovmots Ltd. v Environment Secretary [1979] AC 144, the section can have no application to a quasi-easement such as is claimed in this case, the reason being that

    When land is under one ownership one cannot speak in any intelligible sense of rights, or privileges, or easements being exercised over one part for the benefit of another. Whatever the owner does, he does as owner and, until a separation occurs of ownership, or at least of occupation, the condition for the existence of rights, etc., does not exist.

  29. No doubt, the existence of an outline permission could be described as one of the "advantages" appertaining to the land. But a purchaser of the land, such as the plaintiff in the present case, becomes entitled to the benefit of that permission, not by virtue of s. 6 of the 1881 Act, but because of the general principle enshrined in s. 28(5) of the Local Government (Planning and Development) Act, 1963, that a grant of permission to develop land inures for the benefit of the land and of all persons for the time being interested therein. I have no doubt that that is what Henchy J. was indicating in the case of Readymix (Eire) Ltd. v Dublin County Council (unreported; Supreme Court; judgments delivered July 30th, 1974) when he referred to a planning permission as "an appendage to the title". The fact that it is not personal to the successful applicant for the permission and may be utilised by any person who subsequently acquires a legal interest in the property does not convert it into a document of title in any sense. That is put beyond doubt by s. 26(11) of the same Act which provides that

    A person shall not be entitled solely by reason of a permission or approval under this section to carry out any development.

  30. It follows that the plaintiff in the present case, in implementing the planning permission, was in no different position so far as the disposal of the sewage was concerned than if it had been shown in the layout plan as crossing the land of a third party to whom the defendants had sold the land subsequent to the obtaining of the permission.

  31. As to the alternative argument advanced by Mr. Brady, that the plaintiff was entitled to rely on the doctrine of promissory estoppel, the law on that topic was stated as follows by Griffin J. in the decision of this court in Doran v Thompson Ltd. [1978] IR 223:

    Where one party has, by his words or conduct, made to the other a clear and unambiguous promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, and the other party has acted on it by altering his position to his detriment, it is well settled that the one who gave the promise or assurance cannot afterwards be allowed to revert to their previous legal relations as if no such promise or assurance had been made by him, and that he may be restrained in equity from acting inconsistently with such promise or assurance.

  32. That passage, which was also adopted by Fennelly J. speaking for the court in Daly v Minister for the Marine [2001] 3 IR 513, is undoubtedly an authoritative statement of the law on promissory estoppel. It is, however, of no assistance to the plaintiff in the present case, because he has failed to establish the existence of "a clear and unambiguous promise or assurance" by the defendants to grant him a way leave over the retained land. On the contrary, even on his own account, which was not accepted by the trial judge, there was no such promise or assurance: the first named defendant did no more than agree that the plan showed the sewage as being disposed of by a pipe crossing the land to be retained by the defendants. Both the attendance of the defendants' solicitor recording the first named defendant's insistence that the sewage should not be disposed of in that manner and the subsequent seeking by the plaintiff of an assurance from the first named defendant that he would be permitted so to dispose of the sewage are entirely inconsistent with any such unambiguous promise or assurance having been given by the defendants to the plaintiff before or at the time the contract was executed by the parties.

  33. I would dismiss the appeal and affirm the order of the High Court.


Cases

Connell v O'Malley (unreported; 28th July, 1983); Daly v Minister for the Marine [2001] 3 IR 513; Wheeldon v Burrows [1878] 12 Ch.D 31; Head v Meara [1912] 1 IR 262; Sovmots Ltd. v Environment Secretary [1979] AC 144; Readymix (Eire) Ltd. v Dublin County Council (unreported; SC; July 30th, 1974); Doran v Thompson Ltd. [1978] IR 223

Legislations

Conveyancing Act, 1881: s.6

Local Government (Planning and Development) Act, 1963: s.26, s.28

Authors and other references

Peter Bland, The Law of Easements and Profits Prendre

Professor J.C.W. Wylie, Irish Conveyancing Law (2nd ed)


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