A cautionary tale

A cautionary tale

Verbal agreements between neighbours over rights of way can be a friendly and informal basis for developing land, but a recent case shows the problems that can arise from relying too heavily on good will.

The case of Pezaro v Bourne (2019) provides a cautionary tale of how not to deal with the removal of a right of way, and shows that an oral agreement with a previous owner will not necessarily bind any successors to the title to that same promise.

Don’t fence me in

The case is essentially a neighbourly dispute regarding rights of way serving three terraced properties. Mr and Mrs Pezaro owned two neighbouring properties (nos 149 and 151) that were burdened by a right of way for a third property (no 147). Over time, the owner of the third property, Mr Ayres, had constructed an outhouse for his dogs at the rear of the property, as well as erecting a fence, meaning he didn’t make use of the right of way over nos 149 and 151.

The Pezaros realised they could form a new plot from the rear gardens of all three properties, so they approached Mr Ayres proposing to purchase a section of land from the garden of 147. Mr Ayres agreed, but the right of way (across nos 149 and 151) was not released during the subsequent sale.

A few years later, the Pezaros then looked to further develop another parcel of land next to no 151, to build an additional house, the plans for which assumed there was no longer any right of way to benefit 147. However, the Pezaros realised that the right of way had not been removed and approached Mr Ayres who verbally agreed, provided his legal fees were paid. The Pezaros didn’t act immediately though, as planning consent had not been granted for their development. Initial planning permission was refused, but planning consent was eventually granted two years later. By this time, Mr Ayres had sold no 147 to a developer, who in turn then sold to Mr and Mrs Bourne who were unwilling to release the rights, as they had made changes to the property that needed to make use of the right of way.

Word of mouth

So to resolve the situation once and for all, the Pezaros sought a determination that the right of way no longer existed in the legal sense. Mr and Mrs Pezaro sought to rely on the doctrine of proprietary estoppel to bind Mr and Mrs Bourne to the verbal agreement they had reached with Mr Ayres. Proprietary estoppel is primarily to stop someone going back on a verbal agreement, and the court has to determine whether the words used would convey an assurance between both parties that would be reasonable to rely upon. Their secondary claim was that the planning permission, which showed their plans to occupy the land affected by the right of way, as well as an existing fence obstructing that access, meant they could claim to be in actual occupation.

Ultimately Mr and Mrs Pezaro failed in their claim. The court found that the oral agreement with Mr Ayres could not be considered binding on Mr and Mrs Bourne, and that the Pezaros could not rely on proprietary estoppel, as they had failed to take the necessary steps to record their agreement on the titles.

The court also found that the Pezaros were not in occupation of the right of way, because the planning permission notice only gave notice of an intent to occupy the right of way – it did not alter or impact the property rights. Specifically, the route of the right of way had only been obstructed by a fence, rather than there being a constructed, permanent feature occupying the land affected.

This case reinforces how difficult it can be to remove legal rights of way and claim they are no longer enforceable, despite them not being used and the route being obstructed. In addition, it shows the importance of ensuring that any legal agreements are in place as soon as possible following discussions with any beneficiaries of the rights, as relying on a verbal agreement can prove to be an expensive assumption further down the line.

From a practical perspective, this dispute was no doubt time consuming and very expensive. While legal indemnity insurance isn’t always the answer, this case demonstrates clearly how an Obstruction of Rights policy can help protect property buyers (including developers) against disputes arising in respect of old, outstanding rights of way still noted on a property’s title, but which appear to be no longer used ‘on the ground’. Had Mr and Mrs Pezaro requested cover when they sought to develop the land next to no 151, they (or the developer) would have been protected as soon as the transaction was completed.

In this respect, cover is typically considered as an alternative to approaching the third party beneficiaries, but it can also be considered to help overcome a similar problem as in this case, where positive verbal discussions took place with previous third parties in the distant past, but there remains a risk their successors in title could enforce the rights.

Ordinarily, the enquiries we receive on a daily basis range from existing residential dwellings to vacant land being developed, all of which can be affected by outstanding, unused rights, where there is a risk of them being enforced.  

Our Obstruction of Rights of Way policy protects the insured against legal costs defending any claim, damages, compensation and other costs that may be awarded as well as costs incurred by complying with any injunction. Importantly, in a worst case scenario, it covers reduction on value as a result of the rights successfully being enforced.  To find out more, talk to one of our team on 01603 61761 or email enquiries@cli.co.uk.