Plaintiff running amusement park on its land – Defendants’ land bound by covenants not to use land for competing business – Defendants’ prospective lessee intending to build public house with dedicated play area for children – Plaintiff seeking interlocutory injunction to restrain defendants from granting lease – Whether serious issue to be tried – Whether balance of convenience lay in favour of plaintiff – Motion refused
The defendant council owned an area of open recreational land (the restricted land) by the beach at Littlehampton, which was bound by restrictive covenants in favour of the plaintiff’s land (the benefited land), which was similarly situated. The earlier covenant was given to the plaintiff’s predecessor, William Butlin, in a freehold conveyance made in 1932, whereby the defendants’ predecessor covenanted not to use the restricted land for “a showman’s business, amusement park or fun fair”. The later covenant was contained in a lease granted in 1984 by the defendants to the plaintiff, and prohibited the defendants from using the restricted land for or in competition with any similar trade falling within the uses authorised by the lease, such uses to include the operation of a pleasure ground for games and recreation and an amusement fair offering rides and other recreation suitable for children.
The plaintiff, which was the holding company of the Billy Smart circus enterprise, had, at all material times, used the benefited land as an amusement park or funfair, which included a children’s play area. In early 1998 the plaintiff learned that the defendants proposed to grant a lease of part of the restricted land to Whitbread plc for the purpose of constructing and operating a large public house and restaurant (described as a “Brewer’s Fayre”). For the benefit of patrons accompanying young children, the development was planned to include an outside play area and an enclosed “Fun Factory” to be fitted with apparatus for climbing and jumping, and providing coin-operated rides. The plaintiff complained that, because these facilities were similar to those present on its own, somewhat smaller, play area, they could not be offered without infringing one or other of the covenants or both. The defendants insisted that the sole purpose of the fun factory was to enable entire families to enjoy the food and drink provided, and emphasised that it would not be possible to enter the fun factory without passing through the bar and restaurant areas. The plaintiff moved for an interlocutory injunction to restrain the defendants until trial from proceeding with the grant of the lease.
Held The motion was refused.
1. The defendants had advanced the unanswerable objection that the application was premature, as the grant of the lease would not itself amount to a breach of covenant. However, it would be a sterile exercise to decide the issue of interlocutory relief on that point alone
2. The alleged likelihood of a breach of the first covenant did not pose a serious question to be tried. The expressions “amusement park” and “funfair” both conveyed the notion of an outdoor activity; consequently, neither were apt to describe the fun factory authorised by the draft lease in favour of Whitbread.
3. On the materials before the court, it seemed unlikely that Whitbread’s operation would breach the covenant against competition: see Drew v Guy [1894] 3 Ch 25; A Lewis & Co (Westminster) Ltd v Bell Property Trust Ltd [1940] 1 Ch 345. However, as no concluded view could be taken, it could not be said that there was no serious question to be tried. The question accordingly turned on whether the balance of convenience lay in favour of the grant: see, generally, American Cyanamid Co v Ethicon Ltd [1975] AC 396. That question had to be answered in favour of the defendants as the court could, and would, order an expedited trial so as to ensure that the effect of the 1984 covenant would be determined before work began on the new development.
Andrew Arden QC and Scott Collins (instructed by Matthew Gibbons & Co, of Littlehampton) appeared for the plaintiff; Wayne Clark (instructed by DJ Freeman) appeared for the defendants.
Alan Cooklin, barrister
