Factual and Procedural Background
Company A (the Appellant) and Company B (the Respondent) are successors to neighbouring development sites that were once part of a single estate owned by Company C. In 1994 Company C executed a deed creating reciprocal servitude rights over the estate to facilitate a multi-phase commercial development. One clause (clause 2.1.1) granted Company B a perpetual right to “make use of and to make connections to” all utilities “currently serving” the portion of land retained by Company C (defined in the deed as “the Atlas Subjects”).
After the deed was registered, Company C conveyed a strip of land known as “the Distributor Road,” including a roundabout under which a public sewer lay, to Company A. During construction, Company B laid a drainage pipe from its land across the Distributor Road and connected it to that sewer. Company A objected, alleging an encroachment and claiming damages equivalent to a wayleave fee.
The Court of Session rejected Company A’s claim, holding that the servitude extended to the Distributor Road. Company A appealed to the House of Lords, where the present judgment was delivered by Judge Slynn, Judge Hope, Judge Clyde, Judge Hobhouse and Judge Millett on 15 July 1999.
Legal Issues Presented
- Does the servitude created by clause 2.1.1 of the deed allow Company B to make utility connections beyond the Atlas Subjects and into the Distributor Road now owned by Company A?
- Is clause 2.1.1 sufficiently clear to impose a real burden over the Distributor Road, given the presumption in favour of freedom from encumbrances?
Arguments of the Parties
Appellant's Arguments (Company A)
- Under the presumption for freedom of property, restrictions must be “very clearly expressed” (citing Anderson v Dickie), and clause 2.1.1 contains no explicit reference to the Distributor Road.
- The phrase “currently serving the Atlas Subjects” limits the servitude to utilities physically within the Atlas Subjects at the date of the deed.
- Any broader construction would burden land that was later conveyed to a third party without clear notice.
Respondent's Arguments (Company B)
- Clause 2.1.1 grants two linked rights—use of utilities and connection to them—wherever those utilities lie, provided they were serving the Atlas Subjects at the date of the deed.
- The absence of geographical words of limitation (contrasting with clause 2.1.2, which is expressly confined to the Atlas Subjects) indicates an intention that the right should extend outside those subjects.
- Extrinsic evidence may be used to locate the relevant utilities without offending certainty requirements, as recognised in McLean v Marwhirn Development Ltd.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Anderson v Dickie (1915) S.C. (H.L.) 79 |
Conditions restricting land use must be clearly expressed; presumption for freedom of property. |
The House accepted the principle but found clause 2.1.1 clear enough to displace the presumption. |
| McLean v Marwhirn Development Ltd. 1976 S.L.T. 47 |
Extrinsic evidence is admissible to identify the location of pipes and services referred to in a deed. |
Relied on to confirm that determining the position of the sewer and pipes did not render the servitude uncertain. |
| Nach Investments (Pty.) Ltd. v Yaldai Investments (Pty.) Ltd. [1987] 2 S.A. 820 |
A servitude may burden the whole servient tenement even where the precise route is not specified; right must be exercised civiliter. |
Cited by analogy to support the view that the entire estate, including the Distributor Road, was subject to the servitude at grant. |
| Hunter v Fox (1964) S.C. (H.L.) 95 |
Strict construction test: whether a reasonable reader could doubt the meaning of the clause. |
Used to reinforce that a reasonable reader would understand clause 2.1.1 to include off-site utilities serving the Atlas Subjects. |
Court's Reasoning and Analysis
Delivering the leading analysis, Judge Hope held that the identity of both dominant and servient tenements must be fixed as at the date of the deed. At that date Company C owned the entire estate, including the Distributor Road; therefore the whole estate was initially burdened unless expressly excepted.
The deed did not confine the servitude to the Atlas Subjects. Instead, it limited the right functionally—utilities had to be “currently serving” the Atlas Subjects—but not territorially. The Court noted the deliberate contrast with clause 2.1.2, which is expressly limited to work “in, under or upon the Atlas Subjects.” The absence of similar words in clause 2.1.1 signified an intention to allow connections wherever the relevant utilities lay.
The Appellant’s reliance on the presumption for freedom of property failed because the wording of clause 2.1.1 was unambiguous. The right to use utilities necessarily extends along their entire length; separating the ancillary right to connect would render the grant ineffective.
The Court accepted that extrinsic evidence could identify the actual location of cables, pipes and the main sewer, adopting the approach in McLean v Marwhirn Development Ltd. Practical safeguards—such as the duty to exercise servitudes civiliter and to cause minimum disturbance under clause 3.4—protected the servient proprietor.
Accordingly, Company B acted within its servitudal rights when it laid a pipe under the roundabout in the Distributor Road and connected to the sewer.
Holding and Implications
APPEAL DISMISSED.
The House of Lords affirmed that clause 2.1.1 conferred on Company B a heritable and irredeemable servitude permitting utility connections wherever the relevant services lay, including beneath land later conveyed to Company A. The decision clarifies that:
- A servitude created by express grant burdens the entire land owned by the grantor at the date of grant unless the deed clearly limits its territorial extent.
- Functional descriptors (“services currently serving”) can be sufficiently precise to satisfy the requirement of certainty for real burdens.
- Subsequent subdivision of the servient estate does not curtail the dominant proprietor’s rights.
Practically, Company A takes the Distributor Road subject to the servitude and is not entitled to damages. The judgment reinforces established principles without announcing new doctrine, but provides authoritative guidance on drafting and interpreting utility servitudes in development projects.