Note on Chaudury v Yavuz: part one – Easement

Chaudury v Yavuz [2011] EWCA Civ 1314 is a useful Court of Appeal case touching on a number of central land law issues. The case arose from a straightforward, but what must be a rather common, set of circumstances. Two neighbouring registered freehold properties, Nos. 35 and 37, consisted of commercial premises on the ground floor and residential premises on the first floor. Between the properties was an alleyway which formed part of No. 35. An old wooden staircase provided access from the alleyway to the first floor of No. 35. The first floor of No. 37 was accessed through the shop. C, the owner of No. 37, extended the property for the purpose of letting by adding another floor and, to avoid the need to access the residential parts of the property through the shop, arranged with V, the owner of No. 35, to remove the old staircase and replace it with a new metal staircase which accessed the upper floors of both No. 35 and No. 37. C paid about £6,500 for this work. There was never any documentary evidence of this arrangement and, although C produced a draft deed for V to execute granting C an easement, this remained unexecuted. Further, C did not, as he could have done, enter a notice on V’s title to protect whatever claim he may have had.

Less than a year later V sold No. 35 to Y who became the new registered proprietor. Shortly after taking possession Y complained to C about trespass to the alleyway and prevented C’s tenants from entering it, finally cutting the top of the stairs from No. 37. Since Y became the new registered proprietor of No. 35 following a disposition for valuable consideration and no reference was made to any right on the registered title, students of land law should immediately recognise that C would have to claim an overriding interest to be able to force any use of the alleyway and staircase against the wishes of the new registered proprietor.

The court at first instance had considered the appropriate proprietary interest into which the right to use the staircase could fall was that of an easement. The problem for C was that the Land Registration Act 2002 sharply retrenched the circumstances under which an easement can be claimed as an overriding interest. Schedule 3. paragraph 3 only applies to certain types of legal easement, and whatever the claim could have been here it would not have been a legal one. That only left Schedule 3, paragraph 2 which confers overriding interest status on an interest where the holder is in actual occupation. For the purposes of the discussion the Court of Appeal was prepared to follow the judge at first instance in assuming that C could have established an easement created by proprietary estoppel. This rather takes for granted that the role of estoppel is to provide a means of creating specific, informal equitable rights when the thrust of the modern law is to see estoppel as a means of preventing unconscionability and leaving the court with maximum discretion in the remedy to preventing or rectify the unconscionability. What we have to assume therefore is that if a good case of estoppel was made out here then the court here would grant an easement by way of remedy (see for example, Crabb v Arun DC [1976] Ch 179) although no analysis is made on this point.

As a result of s.116 of the 2002 Act, it is now beyond doubt that an equity by estoppel has effect from the time the equity arises as an interest capable of binding successors in title. The problem was whether C could be in actual occupation for the purposes of paragraph 2 so as to transform this potentially binding right into one with overriding status. The answer to that was no. The alleyway, and in particular the metal staircase, was used by C and his tenants for the purpose of passing and re-passing to get from the street to the flats. That use did not amount to occupation. An argument raised by counsel for C by way of analogy with the decision in Malory Enterprises Ltd v Cheshire Homes (UK) Ltd [2002] EWCA Civ 151. This was to the effect that if, as in that case, the storage of moveable chattels on the land were sufficient acts of occupation, then surely the presence of the staircase, being a large structure, was occupation in itself. This was rejected on the basis that the staircase had become part of the land itself, ie a fixture, and it could not therefore be at the same time both part of the land and evidence of occupation of it. So the decision usefully confirms the generally held view that the enjoyment of an easement will not normally give rise to a paragraph 2 overriding interest. But Lloyd LJ refused to comment on the position in relation to the enjoyment of parking easements where leaving of a large object like a car for a substantial amount of time on the servient land might indeed raise different considerations regarding the issue of actual occupation.