Equitable easement by estoppel where no express right of access

Hoyl Group Ltd v Cromer Town Council is a case in which the Court of Appeal held that a tenant had acquired an easement by virtue of proprietary estoppel.

Estoppel arguments are very fact specific, and the case involved a detailed analysis of the facts by the court, and of the circumstances in which an estoppel might arise.  In brief terms, the tenant had a 99-year lease from Cromer Town Council of premises that were insufficiently accessible for the tenant’s intended purpose.  As part of the lease negotiations, the tenant supplied plans of works it proposed to carry out to convert the premises into residential accommodation.  These works involved blocking off an existing access and creating a new access, but the lease did not provide sufficient rights of way.  The Town Council approved the proposed works.

The issue of access, and whether the lease had given sufficient express rights of access, came to light several years later when the tenant placed the part of the property still demised by the lease on the market, but its purchaser raised concerns over the lack of access rights.  The Court of Appeal held that a proprietary estoppel had arisen to prevent the Town Council from denying the tenant an easement for the required access. 

The Court of Appeal held that the ingredients of an estoppel were present:

1. the Town Council had allowed the tenant to believe that it had or would have the benefit of a right of way; 
2. in reliance on that belief, the tenant had, to the Council’s knowledge, acted to its detriment in carrying out its conversion works; and
3. it was now unconscionable for the Council to deny the tenant its right of access.

Equitable easements are much less common than legal easements, but arise more frequently than one might think.  The Court of Appeal did not place great emphasis on whether the Town Council knew of the tenant’s mistaken belief about its rights, and sympathy can be felt for the Town Council in this regard as the party being estopped from asserting its strict legal rights.

The doctrine does still have its limitations and, due to the fact specific nature of equitable easements by estoppel, it is no substitute for ensuring that any necessary access rights are properly documented.  Nonetheless, the case is a good example of where an equitable easement can arise by proprietary estoppel.