Practice and procedure – Claim – Defendant – Claimants seeking declaration that restrictive covenant not binding on land – Claimants applying for order permitting Part 8 claim without naming defendant pursuant to CPR rule 8.2A – Whether case appropriate for claim to be made without defendant – Application dismissed
The claimants were two limited companies which applied for an order permitting them to make a CPR Part 8 claim without naming a defendant, pursuant to CPR rule 8.2A.
The claim related to land known as 28 Redwalls Meadow, Dartmouth which was a residential property. It was the subject of two registered titles. The claimants were the registered proprietors of the fee simple estate in parts of the land which was subject to a restrictive covenant contained in a conveyance of the whole land in August 1977.
That covenant forbade the construction of any building on that part of the land now owned by the second claimant. The claim sought a declaration that that covenant did not bind the land, ie, that the claimants’ land was not “affected” by the covenant.
They argued that since the purchaser under the 1977 conveyance (C) did not own the land intended to benefit from the restriction (the remainder of the Redwells Meadow Estate) when the restriction was entered into, the benefit of the covenant was never annexed to any part of the land intended to benefit so as to be enforceable against the claimants.
As C had been dissolved and its liquidator discharged, it no longer had sufficient interest in the property. Therefore, the claimants applied for permission to bring the claim without a defendant. The application was dealt with on the papers.
Held: The application was dismissed.
(1) Although C had been dissolved and its liquidator discharged, so that it had no sufficient interest in the matter, it did not follow that no-one had an interest as a successor in title to the company. Assets belonging to a dissolved company at the time of dissolution generally vested in the Crown as bona vacantia. In appropriate circumstances, the company could be restored to life under chapter 3 of Part 31 of the Companies Act 2006 for the purpose of vindicating unlitigated causes of action. However, that was not necessary here.
(2) C had long since sold all the land, and by the terms of the conveyances, was expressly not liable to its purchasers for not enforcing the covenant against other purchasers.
However, the claimants had not mentioned the owners and occupiers of Nos 21-27, Redwells Meadow. Five of the conveyances of those properties were before the court. All referred to the earlier conveyance by which C acquired its legal estate to the land but did not set out its terms.
Depending on their personal attitude, and on any legal advice which they might hereafter take, they might or might not wish to be heard on the question of the binding effect of the covenant. The evidence supporting the claim and the application was conspicuously silent on their position. They did not appear to have been approached to see whether they wished to become involved.
(3) The application (and the claim) was put before the court on the basis of the documents and information available to the claimants. The claimants were asking the court to infer that the purchaser did not acquire its legal estate to the land until after the 1977 conveyance but it would not do so.
The claimants were the successors in title to the purchasers of No 28 only. The current owners and occupiers of Nos 21-27, on the other hand, derived their titles through their own purchasers from C, and would almost certainly have access to further relevant documents and information, probably including the missing conveyances for Nos 22 and 25.
They might also have access to one or more of the earlier conveyances which were merely referred to, but of which no copies were presently available. Some of those documents might bear on the factual question as to when exactly C acquired its interests in the several parcels of land on Redwells Meadow. But they were not before the court.
(4) In addition, the owners and occupiers of Nos 21-27 might wish to argue that, even if C had no legal estate in other land at the time of the 1977 conveyance, the doctrine of the building scheme still applied. The conveyances were in materially identical form, and all contained a plan of the whole development of Nos 21-28.
It might well be that the houses were in course of erection even before C acquired its legal estate in each parcel of land. C might therefore have had other rights, perhaps equitable interests, before that. Questions of notice might therefore also arise. The claimants could not know how the owners and occupiers of the other properties might put their cases.
The general rule was that court decisions bound only those who were parties to them, subject to certain exceptions, such as representation orders and notice procedures, but none of those exceptions applied here. So, if the owners and occupiers of Nos 21-27 were not made parties, on the face of it they would not be bound by the court’s decision. The only persons who would certainly be so bound were the claimants themselves.
(5) The court would be asked in this claim to make a declaration. That was a discretionary remedy: CPR rule 40.20. One aspect of the case at trial therefore would be whether there were any factors tending to make it undesirable for the court to make a declaration. Without deciding anything at this stage, not telling some of the people who might have something to say about the matter looked at present as if it might be such a factor.
Therefore, the obvious defendants to this claim were those who would have an interest in enforcing the covenant if it were valid, namely the owners and occupiers of Nos 21-27 Redwells Meadow. If approached, they might express no interest in taking part. But that would be their choice. Unless the owners and occupiers of Nos 21-27 confirmed that they did not oppose the claim, they were properly to be made defendants.
This was not an appropriate case for a claim to be made without a defendant. However, notwithstanding that the claim form was issued before permission was obtained, the claim as issued might continue on the basis that the owners and occupiers of Nos 21-27 Redwells Meadow either confirmed in writing that they did not oppose the claim or have been served with the claim form and supporting evidence (and the usual response pack).
Eileen O’Grady, barrister
Click here to read a transcript of Hughes Family Property Co Ltd and another v No Defendant
