Easements by implication are more difficult to define. It will depend on the facts and circumstances to each exclusive case whether or not an easement by implication will exist.. The recognised rule that is found in the case of ‘Wheeldon v Burrows’ (1897) was that upon the grant of the land that all easements will be attained by the grantee and are apparent and continuous and at the time of the grant they have been used for the benefit of the land itself by the grantor. If the rule in the case of ‘Wheeldon v Burrows’ (1897)is followed then easements work against the grantor and in favour of the grantee because the grantee is capable to claim the an implied easement as a right over the land is retained by the grantor.
This rule however must be that the right is essential for the reasonable enjoyment of the land can pose problems. This right is not essential in question of the enjoyment of the land but it is rather that the right ought to accommodate the dominant tenement. The rules regarding Wheeldon v Burrow (1897) how imprecise in certain cases they can be, particularly in the case of ‘Wheeler v J.J. Saunders Ltd’ (1996).
In Land Property Act 1925 section 62, there are definite requirements that are laid down. The easements in this statute denote that where they have had ’some diversity of ownership or occupation of the quasi-dominant and servient tenements prior to the conveyance‘. If a purchase by the way of a deed, then the rights will transfer automatically unless the conveyance is expressly excluded as the case of ‘Wright v Macadam’ (1949. Furthermore this right has to be enjoyed at the precise time as the conveyance occurs and that the right is capable of becoming an easement, not purely just having permission granted as was held in the case of ‘Green v Ascho Horticulturalist Ltd’
When there is uninterrupted use of land easements can be obtained by prescription, this is where a non landowner is able to gain a prescriptive easement in a property which is not owned as long as every requirement that are stated are met. The requirement typically includes the use of the easement for a period of twenty years as is ruled in Prescriptions Act 1832 S.2 and this can be seen in the case of ‘Reilly v Orange’ (1955), by maintaining exclusive use is ensured, using it continuously during this period and doing this in a manner which makes it clear to the current owner.
A Right of Light needs to be acquired prior to it being enforced, for Mary to be successful in any action with regards to the interference to a right to light that it is merely not enough that the light is now enjoyed less than before.
However although there is not an absolute right to light from a neighbour’s land in the ‘Prescription Act 1832’, a right to light can be attained provided the light has been uninterrupted for at least 20 years. This applies commonly to the building and particularly to the window(s) where the light enters. If this right is infringed then the loss must be significant and hinder the enjoyment and reasonable use of the property.
If by needing artificial light through the daytime to be able use Mary’s workshop are then this might fall into this definition because of the potential development. Shading of the yard and delivery area is not likely to establish a breach of a right to light. If Mary can be prove that she cannot use the yard to make a living (as part of her business) because of the shading, it maybe however possible to persuade the court to provide an injunction.
If the amount of light is limited coming through a window by the new development and inside the level of light falls below an accepted level, this will then constitute an obstruction. This is nless Mary waives her rights to the affected window then she would be free to take legal action if she considered that her light is being blocked against the landowner.
It has to be seen that the reduction in light makes Marys property is less fit for its purpose than it was and that the quantity of ’appropriate‘light can depend on the building, its use and its locality, it also has to be considered if the amount of light will be inclined to increase standards and expectations of living.
The prescriptive right may be lost if the development is built and it blocks the light for a period of more than 12 months without an objection being raised by Mary. The development can be however prevented because of the Right of Light, even when Planning Permission is granted by the Local Authority.
Mary has to show the decline in light she enjoyed extents to a nuisance. A nuisance can arise if:
"as a matter of common sense, such a deprivation of light as to render the occupation of the (dominant land) uncomfortable in accordance with the ordinary ideas of mankind" As shown in the case of ‘Colls v Home and Colonial Stores’ (1904)
In ‘Carr-Saunders v Dick McNeil Associates Ltd’ (1986)this strengthened the view by deciding a dominant owner is allowed enough light so that the property is adequately lit for ’all ordinary purposes for which the property may reasonably be expected to be used’.
Although to complicate the possibilities further, the law will recognise that loss of light will sometimes be acceptable with the fact that just because less light is available that this does not automatically allow Mary a right to complain.
Therefore given that Mary has occupied the building and land for the duration of 23 years then she can look to obtain a right of light for the workshop areas which she uses natural light for and the residential flat above. It could be argued that the areas that have shutters on have not had 20 years of uninterrupted light and therefore would not be included in the ‘right of light’, however I would argue that this is merely superficial and that they can be included.
It would be possible for George to prevent Mary obtaining a right to light by initiating processes under the Rights of Light Act 1959. This act allows the construction of a theoretical obstruction to the light that is received by Marys building over that which could be possibly built. George would then notify Mary that he has created a 'screen', in front of her windows. Mary, would then be served with a notice, would have 12 months if she wanted to object to respond.
There are various remedies for infringement to right of light:
- Abatement
- Damages (at common law) for nuisance
- Interim Injunction
- Final Injunctions
QUESTION 2
Firstly, a commercial mortgage is basically a loan that is made using commercial property as security and collateral for repayment of the money. This will give the mortgagee a right to the property, which may be claimed if the mortgagor defaults in repayment. The lender (ABCwood (CEM)) could force the sale of the factory and recover the amount borrowed from the sale proceeds.
The borrower, in this case Eric, can be a partnership, limited company or an incorporated business, so calculation of credit for the business may be more complex than it is with residential mortgages.
As some commercial mortgages can be non-recourse this means in the result of default in the repayment, then the creditor may only take hold of the collateral, and has no additional claim for the remaining deficiency.
It will transfer over the legal title to the mortgagee (ABCwood (CEM)) and will prevent the mortgagor (Eric) from being dealt with the mortgaged asset whilst is subject to the mortgage.
Legislation has however affected features of a legal mortgage over the land. The creation of a Legal Mortgage is a charge by Deed by the way of Legal Mortgage under the Law of Property Act 1925 S. 87. Although the title does not transfer to ABCwood (CEM), as it is with a mortgage of other assets, this will form a security interest that will give the mortgagee equivalent rights.
Equitable mortgages arise when the formality to produce a legal mortgage is not completed or when the asset being mortgaged is only an equitable interest. Equitable mortgages will only transfer the beneficial interest of the asset to ABCwood (CEM) with legal title remaining with Eric.
Although the primary liability is with the business itself, in Eric’s case, he has the repayment liability secured upon his personal assets.
It states that Eric cannot redeem the loan for 35 years at the earliest to determine whether this clause is viable we need to look into the right to redemption, this is the right to pay back the mortgage and in exchange the property is free from the charge (mortgage) upon it.
With common law the right to redeem is on one particular day alone and if the Eric did not settle payment on that date they were liable to lose the property to ABCwood (CEM) and then would be liable for the debt.
However it is recognised in equity that a common right of redemption was the only principle of the mortgage is that of security for the loan. Therefore ABCwood (CEM) may not object if Eric redeemed.
It is said that the right to redeem a mortgage is inviolable, for example ‘once a mortgage always a mortgage’.
The right of redemption can be postponed. As it is disputable that to prevent Eric from being able to redeem the mortgage before a certain time is unreasonable, however in the case of ‘Knightsbridge Estates Trust Ltd v Byrne’ (1939), that the Court of Appeal had held it is not just a question of reasonableness but that of the contractual principles where the agreement was entered into by a party freely for a term to extend the mortgage until a definite date. It can be argued that it is unreasonable for Eric to be tied into the mortgage so long but that it is not necessarily unfair to have entered the contract with ABCwood (CEM).
It ought to be known that a postponement of redemption cannot be allowed when the right to redemption is of a nature that becomes deceptive. Therefore that provision will be void. As in ‘Fairclough v Swan Brewery Co Ltd’ (1912)
In terms of the interest rate and clause for Eric’s business to purchase materials from ABCwood (CEM) it can be seen that the mortgage can have terms that give ABCwood (CEM) particular advantages in addition to the interest with the loan repayment. For example, an oil company may loan money to an owner of a garage by the way of mortgage and in addition to the loan repayments the mortgagor must also agree to purchase petrol and supplies from the oil company. Any agreements are not voided on the proviso that they are not unfair or unconscionable, whether the terms are unfair and unconscionable is a debatable upon the facts if one of the parties have acted in a morally unacceptable way and can be made void not because of the association with the mortgage but because a contract that is to be used as an engine of oppression will not be allowed in public policy. For example in ‘Cityland and Property (Holdings) Ltd v Dabrah’ (1968). The court varied the terms of the mortgage, as they were unconscionable, the interest was equivalent to 17% per annum
However in the case of ‘Multiservice Bookbinding Ltd v Marden’ (1979) It was seen that a mortgage term is not unconscionable just because it is seen to be unreasonable, the mortgage interest was linked to the value of Swiss Franc, it was poor deal for mortgagor, however not unconscionable.
The clauses do not restrict the redemption unfairly, an advantage is gained in these cases where after redemption. In the case of ‘Biggs v Hoddinott’ (1898), the collateral term intended to terminate with the redemption and it was held to be valid by the court.
Similar to Eric’s case, it can be seen in the cases of ‘Noakes & Co Ltd v Rice’ (1902) and ‘Bradley v Carritt’ (1903) that the advantage ABCwood (CEM) have got are proposed to continue after the redemption and as in the above cases the terms were held to be void by the House of Lords.
The reasoning for the House of Lords decision in the case was due to particular facts in the case of ‘Noakes v Rice’1902 it was intended that the publican would be tied to the brewery (the mortgagee) for the duration of the lease (26 years) and after the redemption of the mortgage.
If restraint of Trade clauses in mortgages then they are subject to common law rules. In the contract where a term is stated that is unreasonably retaining trade on public policy ground is void, this is provided that it is possible to be severed, if it is not then the whole contract could be made void.
The doctrine of restraint of trade in respect of mortgages can apply to the clauses to which the mortgagor (Eric) has required to secure the mortgagee (ABCwood (CEM)) for the loan to be returned. If the term however is not in the restraint of trade then it remains as valid irrespective of any particular link it can have with a mortgage. It is not void because of its links with the mortgage
In regard to the right for ABCwood (CEM) to purchase the factory within the redemption period it must be seen that the Right to Redeem have not been excluded, if any covenants which provide the property to become the mortgagee's unconditionally on the occurrence of a particular event it becomes void. This includes the options enabling the mortgagee (ABCwood (CEM)) to purchase the mortgaged property. ‘Samuel v Jarrah Timber & Wood Paving Corp’ (1903) In this case there was a purchase option in favour of a mortgagee this was found to be void as it was contained in the mortgage agreement
In the case of ‘Reeve v Lisle’ (1902) there was an option to purchase in favour of a mortgagee which can be valid if it is made outside of the mortgage agreement itself and it has been freely entered into and is completely independent of the mortgage.
I would advise Eric that if this clause makes up part of the mortgage contract that it is not enforceable and therefore void.
It could be argued that Eric agreed to the loan agreement due to undue influence, this is when a contract is entered into because of pressure. In this case Eric was suffering from economic duress and was subject to pressure from ABCwood (CEM) and he could have cause for action in equity to have the contract set aside on the grounds of undue influence. This happens where the existing relationship between Eric and ABCwood (CEM) has been abused by ABCwood (CEM) to obtain an unfair advantage over Eric. There are two forms of undue influence these are presumed and actual undue influence. A contract can be rendered voidable where it has been entered into because of undue influence. This enables the person who is influenced (Eric) to ensure that the contract is set aside against ABCwood (CEM) who exposed Eric to the influence.
Bibliography
1. Case
Reilly v Orange ((1955)) 2 Q.B 112
Wright v Macadam (1949)
Green v Ashco Horticulturalist Ltd (1966)
Goldberg v Edwards (1950)
Aldred's Case (1610)
Re Ellenborough Park (1956)
Hill v Tupper (1863)
Ackroyd v Smith (1850)
Wright v Macadam (1949)
Dowty Boulton Paul Ltd v Wolverhampton Corporation (1976)
Wheeler v J.J. Saunders Ltd (1996)
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calum_82 (student)
