Love Thy Neighbour – Prime London Holdings 11 Ltd v Thurloe Lodge Ltd
The Access to Neighbouring Land Act 1992 (“the Act”) provides building owners with a right to obtain access to neighbouring land to carry out works in certain circumstances. The Act can be used where the adjoining owner refuses to give consent to the building owner having access to its land. In these circumstances, the building owner can apply to the County Court for an access order. Davies and Partners' specialist Property Dispute Resolution Team review a recent case study.
In Prime London Holdings 11 Ltd v Thurloe Lodge Ltd  EWHC 303 (Ch), the Claimant applied for an access order under the Act in the High Court. Such published decisions are rare; the Act has been in force for 30 years, but this is believed to be the first time that the High Court has considered the Act. As a result, the case provides helpful guidance on the requirements for an access order.
In this case, the Claimant, Prime London Holdings 11 Ltd, was redeveloping its property to become what is called a “super prime” property. This redevelopment involved removing all interior walls and fittings, digging out two or three levels of basement and then refitting it to a very expensive standard.
The Defendant, Thurloe Lodge Ltd, was also in the process of redeveloping its property, again involving the substantial rebuilding and enlargement of the original building.
Prime London requested access to Thurloe Lodge’s land under the Act in order to carry out works on the north wall of the property as part of its redevelopment works. This wall was positioned on the boundary of the property and its exterior could only be accessed by a narrow passageway between the two buildings. The passageway was on land owned by Thurloe Lodge. Prime London required access to the passageway in order to re-render and repaint the wall, but Thurloe Lodge refused Prime London’s request for access.
Prime London therefore made a claim for access under Section 1 of the Act. In considering whether to grant the access order, Deputy Judge Thompsell noted that Section 1 requires the Court to consider five questions in a specific order.
Question 1: Are the works reasonably necessary for the preservation of the whole of any part of the claimant’s land?
While the legislation relating to this question is ambiguous, the judge held that the correct interpretation is that both the application must be reasonably necessary and that the basic preservation works themselves must be reasonably necessary. The Act lists various examples of “basic preservation works” and it was held that the Claimant’s proposed re-rendering of the wall amounted to “maintenance, repair or renewal” under the Act and therefore fell within the definition of “basic preservation works”.
When considering whether the works were reasonably necessary, the judge held that works that are undertaken for aesthetic purposes can be regarded as reasonably necessary in some cases. In this case, the Claimant was justified in wanting to carry out the proposed works to the wall to restore it to a state of presentation that was in keeping with the upmarket character of the property and the locale. The Claimant’s proposed works were therefore held to be reasonably necessary.
Question 2: Would it be impossible, or substantially more difficult, to carry out the works without entry to the other land?
In this case, both parties agreed that access to the Defendant’s land was necessary for the Claimant to carry out the proposed works.
The Court can only grant an access order if the answer to both questions 1 and 2 is yes. If the answer to both questions is yes, the Court should consider questions 3 and 4. If the answer to either question is no, the Court has no jurisdiction to make the order.
Question 3: If the order is granted, would the respondent or any other person suffer interference with, or disturbance of, his use or enjoyment of the servient land?
In considering the natural use of the words “use or enjoyment”, the judge held that they capture both the Defendant’s use of the land by employing a contractor to develop on it and the contractor’s occupation of the land for the purpose of the building project. The judge in this case answered this question with “probably not”.
Question 4: If the order is granted, would the respondent or any other person occupying the land suffer hardship?
The judge had to consider the meaning of “hardship” and found that it connotes more than mere inconvenience and can include financial hardship. In some circumstances, the Court may order financial consideration to be paid by the applicant for the privilege of entering the servient land. If the Defendant is compensated under the terms of the order, then the order cannot give rise to any financial hardship. The judge’s answer to question 4 in this case was therefore in the negative.
If the answer to either of questions 3 or 4 is yes, the Court must consider a fifth question
Question 5: Would the interference, disturbance or hardship occasioned by reason of the entry onto the land occur to such a degree that it would be unreasonable for the Court to make the order?
In answering this question, merely some interference, disturbance or hardship is not sufficient for it to be unreasonable for the Court to grant an order, but rather the detriment needs to be of such an extent that it would be unreasonable to make the order. The Court must therefore consider not only the extent of interference, disturbance or hardship to the respondent, but also the detriment to the applicant if the order is denied and their “reasonably necessary” works could not be carried out.
Having answered all five questions in favour of the Claimant, the Court granted the access order. The Court had to consider its powers in relation to compensation for the Defendant. Under the Act, the Court has power to impose a condition of compensation on the Claimant, requiring it to pay for any loss, damage or injury or any substantial loss of privacy or substantial inconvenience. The Court’s powers in this regard are wide and therefore the Court can order compensation on:
• a forward-looking basis, by ordering payment of a specified sum, or a sum to be calculated on a specified basis;
• on a backward-looking basis, allowing the respondent to claim for losses or damage actually incurred once suffered and quantified; or
• a combination of both approaches.
The judge appreciated that the foreseeable heads of compensatable losses arising from the Claimant’s works would vary depending on the stage at which the Claimant’s works were carried out relative to its own building project and the Defendant’s building project. In this case, the judge considered that the Defendant would greatly benefit from the Claimant’s works as it would greatly enhance the appearance of the wall and would bring it in line with the upmarket finish that the Defendant was seeking to bring to its own property.
The Act allows for the payment of consideration in addition to compensation. Consideration is a fee for the privilege of entering the Defendant’s land. The judge called this fee a “licence fee”. Under the Act, the Court can order a licence fee to be paid unless the works are to residential land.
There was a debate over whether the Claimant’s property was residential land. The Court held that once a property has obtained the character of being residential land, it retains that character until the property is used for another purpose. The Court rejected the Defendant’s argument that the current ownership of the property by a property development company rather than by an owner-occupier is relevant in determining whether the property is residential for the purposes of the Act. In this case, the judge held that the Claimant’s property was residential land and therefore did not make an order for a licence fee.
However, the judge appreciated that case law concerning the Act is rare and it would therefore be useful to other judges and parties applying the Act in the future to understand how to determine the appropriate licence fee. In doing so, the judge noted that the Act requires the Court to consider all circumstances of the case, but in particular the likely financial advantage of the order to the applicant and the inconvenience likely to be caused to the respondent by the entry. The judge suggested approaching the valuation of the licence fee in a similar fashion as a landlord would when offering a reduction in rent to the tenant due to disruption caused by works.
In his judgment, the judge noted the importance of disputing parties acting reasonably within the context of the dispute. He accepted that the Claimant had adopted an open and constructive approach in this matter and had tried to accommodate objections made by the Defendant. On the other hand, the Defendant had created more problems than solutions. The judge issued a reminder that a respondent is expected to work constructively with the applicant and warned that if it fails to do so, the respondent risks losing sympathy with the Court and risks facing consequences in costs.
In his closing remarks, the judge referred to the Biblical precept to “love thy neighbour” and suggested that it would be cheaper and more sensible for the owners of neighbouring properties to abide by this concept, rather than resorting to litigation to agree an outcome.