The High Court (Carnegie v Nolan 19 March 2018 (unreported)) has held that a parking agreement permitting a landowner to relocate parking spaces did not allow him to allocate different spaces hundreds of metres away. To do so was in derogation of the grant.
Derogation from grant is a general principle that if one person agrees to give a benefit to another party that party should not do anything that substantially deprives the other of that benefit. Essentially having given something with one hand, you cannot take it away with the other. The principle is typically relied upon by tenants to prevent landlords from doing something that renders the property materially less fit for the purposes for which the lease was granted and prevents the tenant from enjoying the property.
The case in hand
Mr Nolan and Mr Carnegie owned adjacent properties in Hampshire. Mr Carnegie bought Tower Court (“the Property”) and shortly after entered into a deed of easement with Mr Nolan for which he paid £60,000. The deed among other rights granted to the Property a right to park five vehicles within a designated area upon Mr Nolan’s land.
The parking area was defined as ‘the area shaded blue on the plan or such other area as the grantor may designate from time to time’. The plan showed the parking area for the five vehicles to be just next to the Property.
Mr Nolan subsequently relocated the spaces and claimed that he was entitled to do so. He pointed out that the definition of the parking area meant that he could do so, it did not specify where to, or contain any wording of limitation. In fact, Mr Nolan re-designated the spaces nearly 400 metres away from the Property.
Mr Carnegie claimed this to be in derogation from the grant of the easement.
High Court Decision
The judge held that Mr Nolan had indeed acted in derogation of grant and so the re-designation of the parking spaces was invalid and ineffective. In a strongly worded judgment he said that Mr Nolan’s position was ‘nothing short of ridiculous’ and was ‘a cynical attempt to try and extract more money from Mr Carnegie’.
The original five parking spaces were next to the Property and provided free parking for its residents. The re-designation was as far away as was conceivable and of virtually no benefit because street parking was available. Its distance effectively rendered the grant of the easement worthless and it would have been obvious to both of the parties that that was the case.
He concluded that it was implicit in the principles of non-derogation and the deed as a whole that any re-designation should have substantially the same convenience as the existing designation.
Derogation is a principle that has a particular relevance to real estate matters especially in the area of landlord and tenant, but cases about derogation from grant are rare. Conversely, rights granted that permit relocation are common. Although this decision is at High Court level only, we expect it to be of persuasive authority in informing future discussions and negotiations.
It should be noted however, that derogation from grant does not offer tenants protection for uses not contemplated by the landlord at the time the lease was granted or from actions that have an adverse economic effect on the tenant but do not physically affect the use of the property.