Restrictive covenant — Use restricted to particular type of hospital — Approval required to elevations of proposed buildings — Whether national health trust hospital bound by restrictive covenants — Whether hospital entitled to exercise its statutory powers
By an indenture dated December 24 1912
the predecessor in title to the plaintiff trustees gave land to the trustees of
the Chelsea Hospital for Women. The indenture was subject to two restrictive
covenants: (1) the land was not to be used for any purposes whatsoever except
those of the Chelsea Hospital for Women; and (2) no building could be erected
until the external elevations had been submitted to and approved by the
surveyor to the Cadogan Estate. Following the National Health Act 1946 the land
became vested in the Minister of Health and passed through a number of other
ministers before becoming vested in the defendant national health trust. The
plaintiffs sought declarations that the covenants were enforceable against the
defendant.
enforcing the first covenant by an injunction, but can restrain the defendant
from erecting a building without first submitting plans, although they may not
be able to restrain the erection of a building required for a statutory
purpose. The defendant trust is a statutory body established by the National
Health Service and Community Care Act 1990 with functions to be discharged in
the public interest. When the property became vested in the present defendant
with its limited powers and duties, the restriction in the first covenant on
use became one which was inconsistent with the carrying out of its statutory
function. There is a right to compensation under section 10 of the Compulsory Purchase
Act 1965 in respect of use which applies in the case of an acquisition by
vesting power of statute.
The following cases are referred to in
this report.
Brown v Heathlands Mental Health National
Service Trust [1996] 1 All ER 133
Kirby v School Board for Harrogate
[1896] 1 Ch 437
Stourcliffe Estates Co Ltd v Bournemouth Corporation
[1910] 2 Ch 12
This was the hearing of a summons under
Ord 14A of the RSC in proceedings brought by the plaintiffs, the Hon Charles
Gerald John Cadogan and others, concerning the enforcement of restrictive
covenants affecting land vested in the defendant, Royal Brompton Hospital
National Health Trust.
Anthony Radevsky (instructed by Lee &
Pembertons) appeared for the plaintiffs; David Neuberger QC and Philomena
Harrison (instructed by Norton Rose) represented the defendant.
Giving judgment, Judge Rich QC said: By a writ
issued on October 30 1995 the plaintiffs, Cadogan Estate, claim declarations
and injunctions in respect of the enforceability of two covenants contained in
an indenture dated December 24 1912, whereby the then Earl Cadogan gave to the
trustees of the Chelsea Hospital for Women certain land in Chelsea. Those
covenants were, first, that:
The land … shall not … be used for any
purpose whatsoever except those of the institution called the Chelsea Hospital
for Women …
which purposes were then said to be as:
A public institution founded for the
reception and treatment of females either as in or outpatients who may be
suffering from diseases peculiar to the sex which admit of cure or relief.
The fourth covenant, which is the second
covenant the subject of the claim in the writ, was that:
No building shall at any time hereafter
be erected on the said land or any part thereof unless and until the external
elevation of the buildings so proposed to be erected and particularly the
position of balconies for the use of patients shall have been first submitted
to and approved in writing by the surveyor for the time being of the owner of
the Cadogan Estate …
The defendant, Royal Brompton Hospital
National Health Service Trust, pleaded a defence as to the meaning and present
validity of the covenants, but then added by way of amendment a defence based
upon its own statutory position and powers. That amendment would, it says,
preclude the plaintiffs from enforcing the covenants and leave them, as a
remedy, in so far as the covenants remain valid, exclusively to compensation
for injurious affection under section 10 of the Compulsory Purchase Act of
1965.
That defence, it is accepted, was raised
following the decision of Chadwick J in the case of Brown v Heathlands
Mental Health National Service Trust [1996] 1 All ER 133. In that case the
defendant was established under the National Health Service and Community Care
Act 1990 with particular responsibility for those suffering from mental health
disability. They acquired a property which was subject to a covenant that it
should not be used otherwise than as a private dwelling-house only. They wished
to use it for their statutory purposes for the purpose of housing five adult
patients. The adjoining owners who had the benefit of the covenant sought to
enforce their covenant by injunction. The learned judge considered under Ord
14A whether or not the defence that there was no remedy by way of injunction or
damages to prevent the statutorily authorised use was or was not a bar to the
remedy of injunction which was being sought. The learned judge said at p136 of
the report:
… the principle upon which the Court of
Appeal based its conclusion in Kirby is that, where the legislature has
entrusted a statutory body with functions to be discharged in the public
interest and has given that body power to acquire and
of restriction affecting that land are not to be enforced by injunction or
damages in the courts because the legislature has provided for an exclusive
remedy by way of statutory compensation.
The defendant in this case was
established under that same National Health Service and Community Care Act
1990. An order called the Royal Brompton Hospital National Health Service Trust
Establishment Order of 1994 came into force on March 21 1994, establishing the
defendant body and saying that its functions were those specified under section
5(1)(a) of that Act, which are to assume responsibility in accordance with the
Act for the ownership and management of hospitals or other establishments which
were previously managed by a special health authority. The order provided
further that:
3(2) The trust’s functions (which include
functions which the Secretary of State considers appropriate in relation to the
provision of services by the trust for one or more health authorities) shall be
to own and manage hospital accommodation and services provided at the Royal
Brompton National Heart and Lung Hospital, Sydney Street, Chelsea, London SW3
6NP and associated hospitals (including the management of its teaching and
research facilities).
That hospital, so described, was at the
date of the establishment of the defendant trust already being used for
purposes other than the treatment and cure of diseases peculiar to women. The
purposes therefore for which the trust was established went beyond those which
would have been consistent with compliance with the first covenant to which I
have referred.
The property was transferred to the
defendant and its title was registered subject to and with the benefit of the
matters contained in the charges register which included those covenants. But
it appears to me that the property as so held by the defendant trust is indeed
held by a statutory body with functions to be discharged in the public
interest. Without detailing the reference to it, that body is a body which has
been given power to acquire and hold land for the purpose of discharging that
function. It would follow on the dictum which I have cited from the
judgment of Chadwick J that private rights by way of restriction affecting that
land are not to be enforced by injunction because the legislature has provided
for an exclusive remedy by way of statutory compensation. But that dictum
goes, in my judgment, only to the extent of those statutory powers. The case
with which Chadwick J was concerned was a case where the injunction was directed
exclusively to a use which was the use in the public interest for the purpose
of which the statutory body had been entrusted.
Mr Radevsky has drawn to my attention the
decision in the Court of Appeal in the case of Stourcliffe Estates Co Ltd
v Bournemouth Corporation [1910] 2 Ch 12. That is a case in which the
case of Kirby v School Board for Harrogate [1896] 1 Ch 437, to
which Chadwick J made reference, was cited to court although not commented on
or distinguished by the court. In that case the defendant corporation wished to
provide on land which had been acquired under the Public Health Act 1875 for
the purposes of providing a public park, a public urinal. The acquisition had
been subject to a covenant which was construed as prohibiting the erection of
the building, proposed for that purpose, by the corporation. Parker J at first
instance and the Court of Appeal held that the covenant was enforceable against
the corporation notwithstanding that they had statutory powers for the erection
of the building within a public park. It was said by Cozens-Hardy MR at p19:
Here the corporation have general powers
to purchase land for, inter alia, the purposes of a public park. They
may go anywhere they like and may make a contract with anybody who is willing to
enter into a contract with them for these purposes, and to say that a vendor
under those circumstances cannot rely upon a restrictive covenant entered into
by the purchaser would really be to render it practically impossible for a
municipal corporation ever to enter into a contract with a landowner for
purposes of this kind; for no landowner would be so unwise as to say ‘I will
convey this land or I will give this land, but mind you I cannot impose upon
you any kind of covenant or restriction, however reasonable it may be, because
such a covenant will not bind you’.
In the case which I have to decide, the
stipulations were imposed upon the trustees of the Chelsea Women’s Hospital
when the land was then given by the then owner of the Cadogan Estate to those
trustees. Following the passing of the National Health Service Act 1946, the
land which had been held by those trustees became vested in (as he then was)
the Minister of Health, as did all the property of governors of voluntary
hospitals. The Minister of Health also had vested in him by the same section 6
of that Act all the rights and liabilities to which those trustees were subject
immediately before the appointed day in 1948. There is no issue that the
property which the Minister of Health and his successors derive from those
trustees is subject to the stipulations to which I have referred. The only
issue is whether or not those stipulations are enforceable against the present
owners and indeed the chain of holders from whom the present owners derive their
title, or whether a breach, in so far as it gives rise to injurious affection,
is exclusively to be remedied by a claim for compensation under section 10.
From the Minister of Health, title was
passed down a number of other ministers. In so far as at each stage the
restrictions as to use and as to building without approval of the elevations,
were capable of being observed without preventing the carrying out of the
statutory duties and powers for which the property had been acquired, it would
appear to me on the authority of the Stourcliffe Estates Co Ltd case
that the restrictions remained enforceable. At the moment, however, when the
property was vested in the present defendant with their present limited powers
and duties, the restriction upon use became one which was inconsistent with the
carrying out of their statutory function.
I do not have to refer to the authority
which was cited by Chadwick J which makes clear that compensation under section
10 may be given in respect of use; nor do I have to refer to the authority
which he cites that the restriction upon enforceability of covenants by reason
of the application of section 10, applies equally in the case of land acquired
by agreement as to land acquired by the exercise of compulsory powers. It being
accepted that the rule is of such general applicability, it appears to me it
must apply equally in the case of an acquisition by vesting by power of
statute, as it would on an acquisition by agreement. Indeed, it would seem to
me a more obvious and certain case if the purpose of the rule is to preserve
the availability of the statutory powers. The sole issue therefore appears to
me to be whether or not the particular restriction is or is not consistent with
the function for which the particular statutory body has acquired the property.
Mr David Neuberger QC urges upon me that
the functions of the Royal Brompton Hospital National Health Service Trust
include, by virtue of the second schedule to the National Health Service and
Community Care Act 1990, a duty to carry out effectively, efficiently and
economically the functions for the time being conferred upon it. He suggests
that the necessity to obtain the approval of the Cadogan Estate to the external
elevation of any building which they propose to erect will inhibit their
carrying out that duty.
I accept that if the powers of
consideration and approval of the external elevation of proposed buildings were
so exercised by the Cadogan Estate as to prevent building, or maybe even so as
to impede it in a manner which was reasonable, it might be said that the
obligation to obtain such approval was inconsistent with that statutory duty.
But it does not appear to me that the requirement of approval of the design of
new buildings can be said to be inconsistent with doing all that is necessary
effectively to manage a hospital, in the same way as the function of providing
for patients suffering from diseases which are not peculiar to the female sex
is necessarily one which cannot be carried out while restricting the use of the
hospital to treating patients who are suffering from diseases which are
peculiar to the sex.
Under Ord 14A it is my function to
determine only summarily the particular issue that is raised, whether or not
the particular defence is a complete bar to the particular claim that is
raised; at least that is the position as it arises in the circumstances of this
particular case. A claim for a declaration that the stipulation contained in
para 4 of the schedule to the indenture is valid and enforceable does not seem
to me to be absolutely barred by the rule of law to which I have referred. Nor
does it seem to me that it would be an absolute bar to a claim for an
injunction restraining the erection of a building without first at least having
applied for approval of its proposed external elevations, at least at the stage
when no application has been made and no unreasonable consideration or
interference with the discharge of the defendant’s functions can therefore be
shown.
In those circumstances, I am prepared to
hear counsel as to the precise form of order that I should make so that
effectively there is achieved for the defendant the striking out of the claim
in respect of para 1, but there is left to the plaintiffs the opportunity of
seeking such relief as they may be able to prove in respect of para 4 of the
schedule to the indenture.