The claimants, special purpose vehicles for the development of high-value prime residential property developments in London, retained Withers to act on their acquisitions of two high-value Grade II listed properties in Fulham.
During the course of its retainers, Withers provided the claimants with reports on title on the two properties which failed to identify the presence of three extra-high voltage electric cables (HVCs) running under both sites and owned by UK Power Networks (UKPN).
Subsequent to the purchases, the claimants learned of the existence of the HVCs, the cable route traversing the properties. Whilst the claimants considered approaching UKPN to seek their agreement to moving the HVCs, that step was put on hold to reduce the risk of objection by UKPN to planning permission applications that had been made on the claimants’ behalves to redirect the HVCs.
The claimants raised the following queries with Withers:
- “Should the existence of the cable not have come up on the radar as a result of seller's replies to enquiries, even if it didn't appear on the title docs?
- Could you elaborate slightly on the statutory rights of access point? Does this mean that UK Power could have laid the cable at Sloane and KC without having any kind of legal permission from the owners? It would seem impossible that the owners of the sites were not aware of such a large cable being laid on their property.
- If, as there surely must have been, there is some kind of legal documentation relating to the laying of the cable on either site, then the question remains as to why this hasn't shown up on our radar? We need to decide how we are going to approach UK Power about this issue, so it would be very helpful to get your thoughts on the above. The better prepared we are the more likely we will succeed in getting the cable moved…”
In response Withers replied:
- "The seller can only provide such information as they may have and there were no wayleave agreements or deeds of easement relating to any electricity cable revealed in the seller's replies to enquiries, other than the rights relating to the electricity transformer chambers. In addition, St Mark's was acquired from receivers and therefore the information provided was extremely limited and they had no knowledge of the property whatsoever.
- Utility companies have statutory rights of access onto private land to lay pipes, wires, cables and other service infrastructure. Under the Electricity Act 1989, electricity companies can acquire a wayleave to install an electric line on, under or over private land, together with rights of access of inspection, maintenance and replacement. A wayleave can either be agreed or can arise where the owner or occupier fails to respond to a notice requiring him to grant a wayleave or gives it subject to conditions unacceptable to the electricity company. Wayleaves, whether acquired under the Electricity Act 1989 or granted by a landowner, do not need to be registered at the Land Registry. It is therefore possible that a wayleave was granted sometime ago when the cable was originally laid and was not known to the seller. In relation to the Sloane Building, the seller acquired the property in 2010 and before then it had changed hands in 2009 and 1999. Prior to 1999, it appears that the site was owned by the local authority. The seller may therefore not have been aware of the cable. As to St Mark's, the receivers will have had limited information and are unlikely to have known about such matters.
- Please see comments above".
Subsequently, unbeknownst to Withers, the claimants raised enquiries with UKPN who could not produce any wayleave or other document supporting its right to lay the HVCs and indicated that they were operating on the assumption that UKPN had no legal right to have done so.
The claimants did not seek further advice from Withers and the HVCs were not moved, rendering the developments of the sites more modest in scope than had been anticipated. It was found by the judge at first instance that the claimants could have served notice on UKPN under the Electricity Act 1989 requiring that the HVCs were moved. HVCs would, thereafter, either have had to remove them or seek a ‘necessary wayleave’ from the Secretary of State which, if granted, would have allowed the claimants to obtain compensation from UKPN.