Restrictive covenants — Consent — Successors in title — Conveyance of property — Covenant against additions or enlargements without consent of “vendor” — Whether consent of vendor’s successors in title required as current owners of dominant tenement — Whether meaning consent of original vendor only — Whether covenant discharged on death of original vendor or becoming absolute
In 2007, the claimant purchased the freehold of a flat-roofed bungalow set in a substantial plot. At that date, the bungalow benefited from an extant planning permission to replace the flat roof with a pitched roof. However, legal proceedings were progressing in respect of a claim by the defendants, as the owners of the adjoining property, to be entitled to prevent that development by relying upon a restrictive covenant in favour of their land. The claimant was substituted for the vendor of the bungalow as claimant in those proceedings, seeking declaratory relief, under section 84(2) of the Law of Property Act 1925, as to the meaning of the restrictive covenant.
The covenant in question was contained in a 1966 conveyance of the bungalow land by the parties’ mutual predecessor in title. The latter’s full name was set out at the start of the conveyance followed by the words “hereinafter called ‘the Vendor’”; a later clause dealing with the restrictive covenant prohibited additions to or the enlargement of the bungalow without the written consent and approval of “the Vendor”. The claimant contended that “the Vendor” meant only the original vendor under the 1966 conveyance and did not include her successors in title, such that the restrictive covenant had been discharged upon her death in 1977. The defendants argued that: (i) successors in title were included such that their consent was required as the current owners of the adjoining property; or (ii) if not, the death of the original vendor had not discharged the covenant but had rendered it absolute because no dispensing consent was available.
Held: Judgment was given for the claimant. (1) Where a professionally drafted document such as a conveyance contains a definition of a specific term, strong and cogent reasons will be required to justify departing from that definition or giving different meanings to it in different places. However, there is no rule of law that this will be justified only where an application of the definition would result in commercial absurdity. A requirement for consent to be given by a person who no longer retains an interest in the benefiting land does not produce absurdity or necessarily flout business common sense. Although there might be greater commercial merit in extending the definition of the person who may give consent, it is not for the court to rewrite the contract that the parties have made. Nor does a requirement for the consent of a third party prevent a restrictive covenant from “touching and concerning” the land in the sense of being imposed for the benefit of land retained by the vendor. In the 1966 conveyance, the reference to “the Vendor”, in respect of the restrictive covenant, meant the original vendor only and did not include her successors in title. The conveyance expressly referred to the successors in title of the vendor and purchaser where they were intended to be included. Consequently, approval and consent for alterations to the bungalow could be given only by the original vendor. (2) The death of the original vendor had resulted in the discharge of the restrictive covenant in its entirety. The parties to the 1966 conveyance could not have intended that, following the vendor’s death, the bungalow could never be enlarged or altered; the dispensing power of the original vendor was so fundamental that its discharge resulted in the discharge of the entire prohibition.
The following cases are referred to in this report.
Absalom v TCRU Ltd (formerly Monument Insurance Brokers Ltd) [2005] EWCA Civ 1586; [2006] 1 All ER (Comm) 375; [2006] 2 Lloyd’s Rep 129
Antaios Compania Naviera SA v Salen Rederierna AB (The Antaios) [1985] AC 191; [1984] 3 WLR 592; [1984] 3 All ER 229; [1984] 2 Lloyd’s Rep 235
Bank of Credit & Commerce International SA (in liquidation) v Ali (No 1) [2001] UKHL 8; [2002] 1 AC 251; [2001] 2 WLR 735; [2001] 1 All ER 961
Beechwood Homes Ltd’s application, In re [1994] 2 EGLR 178; [1994] 28 EG 128
Bell v Norman C Ashton Ltd (1956) 7 P&CR 359
BP Refinery (Westernpoint) Pty Ltd v Shire of Hastings [1977] (PC) Aust LR 363; (1978) 52 AJLR 20, PC
Briggs v McCusker [1996] 2 EGLR 197
City Inn (Jersey) Ltd v Ten Trinity Square Ltd [2008] EWCA Civ 156; [2008] 10 EG 167 (CS), [2007] EWHC 1829 (Ch); [2007] 3 EGLR 59; [2007] 46 EG 178
Crest Nicholson Residential (South) Ltd v McAllister [2004] EWCA Civ 410; [2004] 1 WLR 2409; [2004] 2 All ER 991; [2004] 2 P&CR 26; [2004] 2 EGLR 79; [2004] 24 EG 150, [2002] EWHC 2443 (Ch); [2003] 1 All ER 46; [2003] 1 EGLR 165
Equitable Life Assurance Society v Hyman [2002] 1 AC 408; [2000] 3 WLR 529; [2000] 3 All ER 961
Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1); Investors Compensation Scheme Ltd v Hopkin & Sons; Alford v West Bromwich Building Society; Armitage v West Bromwich Building Society [1998] 1 WLR 896; [1998] 1 All ER 98, HL
Mahon v Sims [2005] 3 EGLR 67; [2005] 39 EG 138
Marquess of Zetland v Driver [1939] Ch 1; [1938] 2 All ER 158; (1938) 54 TLR 594, CA
This was the hearing of a claim by the claimant, Wayne Margerison, against the defendants, David Bates and Carole Bates, for declaratory relief in respect of a restrictive covenant.
Nicholas Jackson (instructed by Halliwells, of Liverpool) appeared for the claimant; George Newsom (instructed by Stones, of Exeter) represented the defendants.
Giving judgment, Mr Edward Bartley Jones QC said:
Introduction
[1] The claimant (Mr Wayne Margerison) has, since 11 May 2007, been the owner of the freehold land known as Swaynes Jumps, Mill Lane, Willaston, Cheshire (Swaynes Jumps). Erected on Swaynes |page:166| Jumps is a large flat-roofed bungalow (the bungalow). This dates, in all probability, from around 1966-67. Swaynes Jumps is a substantial plot of land comprising (according to the conveyance of 3 May 1966, to which I shall refer below) some 3,750 sq yd.
[2] Swaynes Jumps originally formed part of the garden of an adjoining freehold property then and now known as Priors Knock (Priors Knock). Erected on Priors Knock is a large dwelling-house with generous gardens. Priors Knock has been owned by the defendants (Mr David and Mrs Carole Bates) since 1978.
[3] In 1966, Swaynes Jumps and Priors Knock were in the common ownership of Mrs Jennie Fisher Horn (Mrs Horn). She conveyed away Swaynes Jumps by a conveyance dated 3 May 1966 made between: (i) herself; and (ii) Mr Hugh Godfrey Badman (the 1966 conveyance).
[4] Mr Margerison now wishes to replace the flat roof on the bungalow with a pitched roof. However, Mr and Mrs Bates object to this, saying that, as the freehold owners of Priors Knock, they have the benefit of a restrictive covenant, contained in subclause 2(c) of the 1966 conveyance, that enables them to prevent the pitched roof from being erected.
[5] Subclause 2(c) of the 1966 conveyance was in the following terms:
(c) Not to make any addition or enlargement or alteration to the said bungalow [that is, the bungalow] outbuildings and motor garage without plans having been first approved by the Vendor and her consent thereto signified in writing such consent not to be unreasonably withheld.
[6] The following issues arise for determination in these proceedings:
(1) On the true construction of the 1966 conveyance, the reference to “the Vendor” in subclause 2(c) is a reference only to Mrs Horn or, alternatively, a reference to Mrs Horn and her successors in title from time to time to Priors Knock (that is, in the events that have happened, is it a reference to Mr and Mrs Bates)?: issue (1).
(2) If “the Vendor” in subclause 2(c) means Mrs Horn and only Mrs Horn, what is the effect of her death on 20 December 1977? Since she is unavailable to give consent, does this mean (as Mr Margerison claims) that the restrictive covenant contained in subclause 2(c) has been effectively discharged or does it mean (as Mr and Mrs Bates claim) that the restrictive covenant has become absolute (because no dispensing consent is available)?: issue (2).
(3) If, but only if, “the Vendor” in subclause 2(c) includes, in the events that have happened, Mr and Mrs Bates, has their consent to the erection of the proposed pitched roof on the bungalow been unreasonably withheld? Mr Nicholas Jackson (who appeared for Mr Margerison) accepted that the burden of proof on this issue was on Mr Margerison: issue (3).
[7] I found issue (3) to be easy to answer. In this, I was greatly assisted by a site visit to the two properties, which occurred on the morning of 2 April 2008. I was also greatly assisted at that site visit by the fact that Mr Margerison (and the Gregsons, whose relevance will become apparent below) had erected on the roof of the bungalow — for my benefit — a mock-up of part of the pitched roof that it was desired to build. Much of the evidence, which I discuss below, goes only to issue (3), but some at least forms part of the background factual matrix against which I must construe the provisions of the 1966 conveyance. I will therefore discuss and analyse the evidence as a whole before turning to the specific issues that I have identified.
Location
[8] Willaston is a village on the Wirral that contains many expensive and highly desirable houses. The specific area in which Swaynes Jumps and Priors Knock are situated is one of mature woodland and greenery. The impression is not of houses with trees and greenery for their gardens but, rather, of houses situated within long-established areas of woodland and greenery.
[9] It is clear to me from inspecting the inside of both Priors Knock and the bungalow that each of Mr Margerison (and his girlfriend, who lives with him at Swaynes Jumps) and Mr and Mrs Bates are intensely house-proud and take pleasure in living in such an attractive location.
[10] As to Priors Knock, this is a detached villa-type residence, probably built in the late 1920s. Even after the sale of Swaynes Jumps, Priors Knock was left with a very large garden indeed. Mr Bates, in para 8 of his witness statement, described Priors Knock as “an imposing family residence surrounded by trees and is nicely secluded on all other sides by trees”. I would not quarrel with that description.
Basic facts
[11] Mrs Horn lived at Priors Knock until her death on 20 December 1977. She had probably done so since Priors Knock was first erected. Mr and Mrs Bates purchased Priors Knock from Mrs Horn’s executor in 1978, and they have remained there ever since. They emphasise that it is their family home and they have no intention whatsoever to leave or to sell. On their death, they intend Priors Knock to remain within their family.
[12] When Mr Badman acquired Swaynes Jumps from Mrs Horn by the 1966 conveyance, there was no building thereon. Swaynes Jumps was merely part of the garden of Priors Knock. By subclause 2(a) of the 1966 conveyance, Mr Badman covenanted with Mrs Horn:
(a) Not to erect or build anything save one bungalow (of which the ridge height shall not exceed 20 feet) with suitable outbuildings and motor garage annexed attached or appurtenant thereto and to be occupied therewith upon the land hereby conveyed and not to use any such bungalow for any other purpose than as a private dwellinghouse or the professional residence of a medical practitioner or dentist. The said bungalow and buildings shall be erected only in accordance with plans and elevations to be first submitted to and approved by the Vendor in writing with a copy thereof for her retention and on such site as she shall first approve.
[13] Mr Badman then erected the bungalow. There is no evidence of the plans therefor and the siting thereof being approved by Mrs Horn, but, equally, there is no indication that they were not. The bungalow is a substantial structure. It is approximately 98ft in length on the elevation facing Priors Knock. At one end, there is a small protruding gable, again facing Priors Knock. Another larger gable faces away from Priors Knock. The bungalow was built with a flat roof and built close to the boundary between Swaynes Jumps and Priors Knock. The distance from the bungalow to the front elevations and front door of Priors Knock is (according to the local planning authority) some 37.5m. There is presently in place a paling boundary fence between the two properties. That appears to be some 2m high and runs the entire length of the boundary. There is not much space between the bungalow and that fence, especially at the gable end. However, various trees have been planted in the available space. The overall effect is to shield Priors Knock from seeing the bulk of the bungalow from ground-floor level. Rather, what is primarily seen is the paling fence and the trees. Thus, from the two ground-floor entertaining rooms of Priors Knock all that can be seen of the bungalow is the tops of certain windows and the barge boards of the flat roof. However, from the first floor of Priors Knock, there is a much clearer view of and into the bungalow. This, in turn, has caused Mr Margerison effectively to reverse the outlook of the bungalow so that its internal rooms look out over the lawns and not backwards towards Priors Knock.
[14] One point that has been made on behalf of Mr Margerison is that subclause 2(a) of the 1966 conveyance allowed for the building of one bungalow of a ridge height no greater than 20ft. Therefore, it is said, since the overall height of the bungalow with the intended pitched roof will be less than 20ft, Mr and Mrs Bates cannot reasonably withhold consent under subclause 2(c) to the erection of the pitched roof. That contention seems to me to be overly simplistic. Mrs Horn had the right, under subclause 2(a), to approve the site for the new bungalow. Had Mr Badman built a bungalow with a ridge height of 20ft, Mrs Horn may well have wanted the same to have been sited far further into Swaynes Jumps and, hence, far further from her boundary. The siting of the bungalow so close to the boundary with Priors Knock could well have been authorised by Mrs Horn only because the bungalow would have a flat roof. Without knowing what exactly passed between Mr Badman and Mrs Horn, no definitive view can be expressed save to say that it cannot be said that it would be necessarily unreasonable |page:167| (under subclause 2(c)) to object to a pitched roof giving an overall height of less than 20ft.
[15] Swaynes Jumps passed through the hands of various owners until it was acquired by Mr Haydn Gregson and his brother (the Gregsons) on 5 December 2003. Clearly, their intention was to improve and renovate the bungalow and then sell Swaynes Jumps, hopefully at a profit. Initially, they did not intend to replace the flat roof, but that plan subsequently changed (perhaps because the flat roof was putting off prospective purchasers or deflating the available price). They made an application to the local planning authority (Ellesmere Port and Neston Borough Council (the council)) for planning permission to erect a pitched roof. Mr and Mrs Bates objected, claiming, even at that early stage, that the pitched roof would result in a development that was unduly prominent and would have an adverse effect upon their visual amenity. It is clear from the minutes of the relevant council meeting that the issue was very carefully considered by the council. Planning permission for the proposed pitched roof was granted on 16 June 2005 on the basis that the proposed pitched roof involved a maximum increase in roof height of 2.25m. The maximum height of the bungalow with the new roof would be 5.4m, but, because the ground sloped slightly, the maximum height overlooking Priors Knock would be 4.4m. The council noted that Swaynes Jumps was well screened by trees and landscaping. They noted that the boundary with Priors Knock consisted of approximately 2m-high fencing with some screening from trees. They noted that Swaynes Jumps was set back from the boundary with Priors Knock by 6.1m (that must, I think, be the major part of the bungalow and not the distance from the small gable end to the boundary) but that there was a distance of 37.5m between the front elevations of both properties. They noted that there were a number of trees that offered screening. They considered that the proposed new roof would improve the appearance of the bungalow. The proposed pitched roof was not considered to be overly intrusive to neighbouring properties. The pitched roof was considered to be in keeping with the character of the area. However, the following conditions were imposed on the grant of planning permission:
(1) no windows or roof lights should be inserted in the roof elevation facing Priors Knock;
(2) no part of the space within the roof should be used as habitable accommodation; and
(3) the materials to be used in the construction of the roof should be submitted to and approved by the council.
Subsequently, the Gregsons obtained building regulation permission for the proposed pitched roof.
[16] Following the grant of planning permission, correspondence quickly ensued between the solicitors for Mr and Mrs Bates and for the Gregsons. This was in the context of the pitched roof for which planning permission had been granted. Consent for the erection of the proposed pitched roof was sought and refused. The initial reasons given in Mr and Mrs Bates’ solicitor’s letter of 21 October 2005 were that the proposed pitched roof would be detrimental to them both in terms of visual amenity and from its potential effect upon the marketability of Priors Knock. By a letter dated 19 January 2006, Mr and Mrs Bates’ solicitor repeated this view. However, by a letter dated 15 March 2006, Mr and Mrs Bates’ objections to the proposed pitched roof were identified as being merely those of visual amenity. There was no reason, their solicitor wrote, why Mr and Mrs Bates’ view from their property and their amenity and enjoyment of their own property should be so seriously impeded by the erection of the pitched roof. As to marketability, Priors Knock was said to be intended as Mr and Mrs Bates’ home for life and to be passed on, thereafter, to their family. Hence, the issue of marketability was irrelevant and Mr and Mrs Bates’ focus was purely upon visual amenity.
[17] The present proceedings were commenced by Part 8 claim form issued on 21 December 2006. The claimants were the Gregsons. The Gregsons sought declaratory relief under section 84(2) of the Law of Property Act 1925 (the 1925 Act). Following the sale of Swaynes Jumps to Mr Margerison, he was substituted as the claimant in place of the Gregsons. There was some cross-examination at trial as to precisely what arrangements had been entered into between the Gregsons and Mr Margerison as to the terms of sale, the erection of the proposed pitched roof and costs. None of this mattered. Mr Margerison says, and I accept, that he would prefer, for perfectly good reasons, to see a pitched roof on the bungalow. That is a perfectly genuine view. Whether or not that results in benefit for the Gregsons is irrelevant.
[18] The planning permission conditions protect Mr and Mrs Bates to a degree and, to that extent, address certain of their concerns over the roof. Two of those concerns are that, in the future, windows or skylights could be placed in the roof or that the roof could be used for habitable accommodation. There are clear answers to these points. First, the pitch of the proposed roof is such (30 degrees) and the internal height such (1.9m) that the roof space could not be utilised in any meaningful way for living accommodation. Second, the planning permission conditions presently prevent windows or occupation. Third, if Mr and Mrs Bates do indeed have the benefit of subclause 2(c), they could object to the alteration of the pitched roof to incorporate windows therein. As to roof coverings, Mr Margerison and the Gregsons (who it appears likely will build the pitched roof for Mr Margerison) are content to use whatever materials Mr and Mrs Bates choose. Mr Bates has indicated that should the roof be built, Westmoreland green tiles would be acceptable.
[19] There was considerable cross-examination of Mr Haydn Gregson at trial as to precisely what were the present plans for the proposed pitched roof. Mr Margerison did not appear to have any detailed grasp of the proposed new roof, he simply understands in broad general outline what was intended and, no doubt, expecting the Gregsons to build it. I suspect that the purpose of this cross-examination was to show that there were now disparities between what would be built and what was authorised by the planning permission so that, thereafter, the point could be made that consent had never been sought for what was now intended. I did not find this cross-examination helpful. It seemed to me that both Mr Haydn Gregson and Mr Margerison were anxious to accommodate Mr and Mrs Bates’ concerns so long as they were indeed able to build a substantial pitched roof. So Mr Haydn Gregson was, in my clear view, starting from what was authorised by the planning permission and contemplating making alterations thereto for the benefit of Mr and Mrs Bates (for example, by reducing the angle of pitch). Mr Margerison and the Gregsons should not be made subject to some technical disadvantage because, following the grant of planning permission, they have now come up with ideas for a structure that might, in their view, be less unacceptable to Mr and Mrs Bates than the pitched roof as authorised by the planning permission. The mock-up roof that I saw (which ran the length of some six trusses) was, as I understand the position, the roof as authorised by the planning permission and that had a pitch of 30 degrees. This gave the bungalow (where it faced Priors Knock) a total external height of some 14ft 5in.
Issues (1) and (2)
Construction
[20] For a summary of the modern approach to issues of construction, I start with what Lord Bingham of Cornhill had to say in Bank of Credit & Commerce International SA (in liquidation) v Ali (No 1) [2001] UKHL 8; [2002] 1 AC 251, in [8], at p259:
In construing this provision, as any other contractual provision, the object of the court is to give effect to what the contracting parties intended. To ascertain the intention of the parties the court reads the terms of the contract as a whole, giving the words used their natural and ordinary meaning in the context of the agreement, the parties’ relationship and all the relevant facts surrounding the transaction so far as known to the parties. To ascertain the parties’ intentions the court does not of course inquire into the parties’ subjective states of mind but makes an objective judgment based on the materials already identified. The general principles summarised by Lord Hoffmann in Investors Compensation Scheme Limited v West Bromwich Building Society [1998] 1 WLR 896, 912-913 apply in a case such as this. |page:168|
[21] Lord Hoffmann, in Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1)*, at p913C, emphasised that the meaning that a document would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of ambiguous words but even to conclude that the parties must, for whatever reason, have used the wrong words or syntax. Although, at p913D, we do not easily accept that people have made linguistic mistakes, particularly in formal documents, nevertheless, if one would conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention that they plainly could not have had. Lord Hoffmann then quoted, with approval, the words of Lord Diplock in Antaios Compania Naviera SA v Salen Rederierna AB (The Antaios) [1985] AC 191, at p201D:
if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense.
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* Editor’s note: Reported at [1998] 1 WLR 896
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[22] I also note what Longmore LJ had to say in Absalom v TCRU Ltd (formerly Monument Insurance Brokers Ltd) [2005] EWCA Civ 1586; [2006] 2 Lloyd’s Rep 129, at p131, in [7]. He emphasised various key principles to be derived from the authorities, in particular:
(i) the aim of the exercise is to ascertain the meaning of the relevant contractual language in the context of the document and against the background to the document. The object of the enquiry is not necessarily to probe the “real” intention of the parties, but to ascertain what the language they used in the document would signify to a properly informed observer; and
(ii) a commercial document must be interpreted so as to make business common sense within its context. However, if a detailed semantic and syntactical analysis of a word in a commercial contract will lead to a conclusion that flouts business common sense, it must be made to yield to business common sense. Longmore LJ then referred to the comments of Lord Diplock in Antaios that I have quoted above.
[23] A detailed semantic and syntactical analysis of the various formulations of the principles of construction as used in the various authorities is unlikely to assist. Thus, on a detailed semantic and syntactical analysis of what Longmore LJ had to say in Absalom it might perhaps be suggested that there is a degree of tension between what Longmore LJ had to say and what Lord Diplock had to say. Longmore LJ pointed out that a commercial document had to be interpreted so as to make business common sense in its context, whereas Lord Diplock referred to a conclusion that would “flout” business common sense. An interpretation in accordance with business common sense may not be, perhaps, entirely the same concept as identifying a conclusion that flouts business common sense. The former approach could be a purposive one — the latter merely a reactive one. However, the basic position is clear. If it is accepted (as is the case) that the court’s role is to ascertain the true meaning of the language used (in the sense of ascertaining what the language used would signify to a properly informed observer in the context of the document and its obvious purpose read against the relevant background factual matrix), approaching the question with a perception of business common sense (as that would appear to a properly informed observer) will cause any tensions to fall away.
[24] I make these points because I have had to consider carefully something that Jacob LJ had to say in [8] of his judgment (with which the other members of the Court of Appeal agreed) in City Inn (Jersey) Ltd v Ten Trinity Square Ltd [2008] EWCA Civ 156†. City Inn was a case that raised an issue identical to issue (1) in this case, but which had different facts. Jacob LJ said:
8. It is obviously a strong thing to say that where a draftsman has actually defined a term for the purposes of his document that in some places (but not others) where he uses his chosen term he must have intended some other meaning. It is not impossible, however. If, approaching the document through the eyes of the intended sort of reader (here a conveyancer), the court concludes that notwithstanding his chosen definition the draftsman just must have meant something else by the use of the term, it will so construe a document.
This part of what Jacob LJ had to say seems to me to emphasise the great caution that needs to be applied if, in a professionally prepared document such as a conveyance, a specified defined term is to be given, on certain occasions, a meaning other than the one contained within its definition. However, Jacob LJ then went on to say:
Such a conclusion will only be reached where if the term is given its defined meaning the result would be absurd, given the factual background, known to both parties, in which the document was prepared. Nothing less than absurdity will do — it is not enough that one conclusion makes better commercial sense than another.
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* Editor’s note: Reported at [2008] 10 EG 167 (CS)
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[25] These latter words have caused me to pause long and hard (because, as will be seen, I cannot reach the conclusion that it would be “absurd” for the only person who could give consent under subclause 2(c) to be Mrs Horn alone). The words used by Jacob LJ are strong ones and, clearly, I am bound by any relevant point of law that the Court of Appeal decided in City Inn. Granted, the fact that the present case involves the use of a “definition” (namely that of “the Vendor” as being Mrs Horn only), in a professionally prepared document ought I to do no more than to ask the question as to whether applying that “definition” according to its terms creates commercial absurdity? Am I precluded from going further and seeking to construe the 1966 conveyance as a whole (which might well involve giving the “definition” a differential meaning — without finding commercial absurdity — in the application of that “definition” to various individual provisions in the 1966 conveyance)?
[26] However, as with documents, judgments have to be construed as a whole and I am entitled to analyse the decision of the Court of Appeal in City Inn to determine for myself what was actually decided as a point of law. I note, in particular, that Jacob LJ went on to construe the relevant transfer. He did not confine himself solely to issues of commercial absurdity. Ultimately, in [31], Jacob LJ addressed the rival contentions as to “commercial sense”. Indeed, he pointed out that the submissions (on commercial sense) as to why the definition should not be applied according to its express terms had caused him to “pause long and hard”. Taking the judgment as a whole, I see Jacob LJ doing nothing more than construing the relevant transfer in accordance with the principles that I have identified above, albeit against the background that strong and cogent reasons must be advanced as to why a definition in a professionally prepared document should be departed from or given in different places alternative meanings. I do not see Jacob LJ establishing any point of law to the effect that only commercial absurdity would suffice for departure, as a question of construction, from a specific definition. I am fortified in reaching this conclusion not merely by the terms of Jacob LJ’s judgment as a whole but also from the entire basis of the approach to issues of construction as identified by Lord Hoffmann in West Bromwich, at p912G, where he indicated that, under the modern approach: “Almost all the old intellectual baggage of ‘legal’ interpretation has been discarded.” The modern approach to construction involves an interpretation of meaning applying the principles that I have identified above, not an approach that is governed in respect of specific issues or instances by fixed rules of law.
[27] There is one further point that I should make on the question of construction. Nothing in what I have said above entitles the court to remake the parties’ contract for them (or to remake the parties’ contract on the basis of what the court thinks a properly informed observer would say was the contract the parties ought to have entered into). The present is an easy case in which to fall into this particular trap. I must |page:169| construe only the contract that the parties actually entered into, not the one that I might have hoped that they would have entered into.
Issues (1) and (2)
1966 conveyance:
[28] The 1966 conveyance commences by identifying Mrs Horn by her full name and address. She is then said to said to be “hereinafter called ‘the Vendor’”. The time-hallowed expression:
which expression shall, where the context permits, include her successors in title
is not utilised. Although Mr Badman is also described as “the Purchaser” without any reference either to his successors in title, it is quite clear that the draftsman was more than well aware of the distinction between Mrs Horn and Mr Badman personally, on the one hand, and their successors in title, on the other. Thus, in clause 2, Mr Badman covenants expressly “for himself and the person [sic] deriving title under him” and the covenants are given by Mr Badman “with the Vendor her heirs and assigns and so as to benefit and protect the adjoining property of the Vendor”. The covenants are expressly stated not to bind Mr Badman “or his successors in title” after disposing of their interest in Swaynes Jumps. It is crystal clear, therefore, that prima facie “the Vendor” on every occasion where these words appear in the 1966 conveyance means Mrs Horn and Mrs Horn alone.
[29] I have engaged in the exercise that Jacob LJ undertook in City Inn and studied the 1966 conveyance (other than, at this stage, clause 2 thereof) to see whether, at any point therein, the draftsman may have used the phrase “the Vendor”, in the relevant context, to mean “the Vendor and her successors in title”. Analysing the 1966 conveyance (other than clause 2), nowhere is there any imperative or necessity (to make common sense of the various provisions) to construe “the Vendor” as “the Vendor and her successors in title”. On the contrary, in subclause 3(a) (an indemnity covenant given by Mr Badman in respect of certain earlier restrictive covenants binding Swaynes Jumps), the draftsman provides that Mr Badman’s covenant is “to keep the Vendor and her estate and effects” fully indemnified. Even more importantly, in subclause 3(b) Mr Badman covenants as follows:
To pay to the Vendor or her successors in title one half of her two third portion for which she is liable by way of contribution to the expense of maintenance and upkeep of [a common driveway] when and so soon as the Vendor or her successors in title shall give him notice that she or they have received an assessment of the amount of such contribution.
(Emphasis added.)
[30] So, here, there is an express reference to “successors in title” and, further, the draftsman uses the words “she or they” after his reference to the vendor or her successors in title. Further, clause 4 of the 1966 conveyance is a provision against the acquisition of rights of light or air or other quasi-easements:
which would restrict or interfere with the free use of the adjoining property of the Vendor or any part of the same by the Vendor or any persons deriving title under her for any purposes whatsoever.
(Emphasis added.)
[31] Quite clearly, therefore, the draftsman intended “the Vendor” to be Mrs Horn alone, and where he thought he should refer to her “successors in title” he did so expressly.
[32] I turn now to clause 2. The two relevant restrictive covenants are contained in subclauses 2(a) and 2(c), which I have set out above. Subclause 2(b) was an absolute prohibition against certain temporary buildings or structures. Subclause 2(d) was an absolute prohibition against certain hoardings and so on and subclause 2(f) was an absolute prohibition against obstructing the communal driveway. None of these subclauses refers to “the Vendor”. However, subclause 2(e) is of some passing relevance, and it provided as follows:
(e) Not to do or carry on on the property hereby conveyed or in any erection or building at any time standing or being thereon anything which shall cause annoyance or be prejudicial to the Vendor or the owner or occupiers of any of the adjoining or neighbouring property.
[33] Clause 2 opens with the following words:
THE Purchaser for himself and the person [sic] deriving title under him and to the intent and so as to bind not only himself personally but also so far as practicable all persons claiming title under him and to bind the property hereby conveyed into whosesoever hands the same may come HEREBY COVENANTS with the Vendor her heirs and assigns and so as to benefit and protect the adjoining property of the Vendor but not so as to bind the Purchaser or his successors in title after he or they should have disposed of all his or their estate or interest therein…
Issue 1
Analysis
[34] It is self-evident to me, in the context of construing the 1966 conveyance as a whole, that where reference is made in subclause 2(c) to approval of plans “by the Vendor”, this means Mrs Horn and Mrs Horn alone. I have already identified how the draftsman of the 1966 conveyance could, where he wished to do so, refer to Mrs Horn’s successors in title and it is not wholly insignificant that the reference in subclause 2(c) is to “her” consent. Indeed, Mr George Newsom (who appeared for Mr and Mrs Bates) accepted that this is the strict literal interpretation of the words contained in subclause 2(c).
[35] However, Mr Newsom urged me to go on and to construe subclause 2(c) by including Mrs Horn’s successors in title to Priors Knock within the definition of those who can approve the plans. Mr Newsom’s submission is, I think, that this is a matter of construction, although he may fall back on the implication of a term. As to implication (in the sense of the implication of a term), I am conscious of what Lord Steyn had to say in Equitable Life Assurance Society v Hyman [2002] 1 AC 408, at p458G. Lord Steyn drew a clear distinction between the process of contractual interpretation and the process of implication. The legal test for implication is one of “strict necessity”: see p459D.
[36] At the heart of Mr Newsom’s submissions is what he said are the commercial realities of the situation. Mr Badman was being sold a vacant plot of garden land and paying a substantial sum of money therefor on the basis that he would be able to build a bungalow thereon. Restrictive covenants were being given that, ex hypothesi, could bind Mr Margerison only because they fulfilled the equitable requirements for being restrictive covenants (in particular, on the facts of this case, because they “touched and concerned” Priors Knock). The commercial reality was, Mr Newsom said, that those restrictive covenants should be enforceable by the owners for the time being of Priors Knock. Mrs Horn was bound to die one day, and it would seem that she was probably already elderly. She might move away to a distant part of the country. She might become untraceable. She might, perhaps, lose the mental capacity to give consent at all. Moreover, what interest would she have in giving consent after she had parted with all interest in Priors Knock? Why should additions or alterations to the bungalow affect her at all in these circumstances? Why should her consent (as opposed to that of her successors in title) be required at all? Mr Newsom said that the commercial realities strongly suggest — indeed I think that Mr Newsom would say dictate — that consent should be sought from the owners from time to time of Priors Knock. In addition, although subclause 2(a) is no longer in issue, Mr Newsom said, with force, that the phrase “the Vendor” in that subclause must bear the same meaning as in subclause 2(c). What if the only person who could approve the plans for the first erection of the bungalow were Mrs Horn and she were to have died immediately after the 1966 conveyance? Would that mean that the bungalow could not have been built at all? (This latter submission depends, however, upon Mr Newsom’s submission on issue (2), namely that if issue (1) were to be decided against Mr and Mrs Bates, the restrictive covenants become absolute and are not discharged. If the only person who can give consent is Mrs Horn and the restrictive covenants are effectively discharged following her death, some of the force comes out of this particular submission.) Mr Newsom also pointed out that the effect of construing subclause 2(c) so that the only person who can given consent is Mrs Horn is to create, |page:170| granted Mrs Horn’s death, the unfortunate situation whereby either the restrictive covenants contained in subclause 2(c) have become absolute or are effectively discharged.
[37] There is considerable force in these submissions, and I confess that I was initially much attracted by them. However, to accede to these submissions would, in my view, be to do clear violence to the wording of the 1966 conveyance taken as a whole. It is crystal clear that the draftsman knew exactly the limitations contained within his use of the definition “the Vendor” and that he could, and did, refer to Mrs Horn’s successors in title where he thought it appropriate to do so. Nor can it be said that to confine the only person able to give consent under subclause 2(c) to Mrs Horn amounts to commercial absurdity. Mrs Horn may have been interested only in what occurred on Swaynes Jumps during her lifetime, or during the period she remained in occupation of Priors Knock (as it happens, her grant of probate indicates that she remained living at Priors Knock until her death). If she moved from Priors Knock, she might have been prepared to give or refuse her consent in accordance with what she thought were the best interests of her successors in title. The situation whereby consent is to be given by a person who no longer retains any interest in the benefiting land is not a wholly unknown phenomenon. Nor is it without commercial purpose. It prevents, for example, a multiplicity of consents from being required in the event of a subsale of various parts of the benefiting land (and the retained garden to Priors Knock was certainly large enough to support at least one further house). The underlying logic of the decision of Neuberger J in Crest Nicholson (see below) is that it is quite possible to envisage circumstances in which consent for the doing of acts that would otherwise be prohibited as a breach of restrictive covenant can remain vested in the original covenenatee: see, in particular, [42] to [46] of his judgment. Moreover, of course, City Inn was just such a case, although its facts were substantially different from those of the present. It might be said that by confining the person who can give consent to herself, Mrs Horn was potentially devaluing Priors Knock (in the sense that the practical benefit of giving or refusing consent would not pass to her successors in title). However, she may have had no concern over that (for all I know, she may have had no one to leave her money to apart from charity). She may, having apparently lived in Priors Knock for some 30 or more years, have been concerned, entirely, only with what happened during her continued occupation of Priors Knock and not with what would happen after her death. For all I know, she could have obtained a larger price for Swaynes Jumps from Mr Badman for the very reason that the only person who could give consent was herself. In this context, I refer to subclause 2(e). Again “the Vendor” must have the same meaning as in subclauses 2(a) and 2(c). It is, perhaps, somewhat surprising that the covenant against annoyance should relate only to activities prejudicial to Mrs Horn alone, but again, on this analysis, that is not necessarily commercially absurd. (I should perhaps add that no suggestion has been made to me that Mr and Mrs Bates could seek to prevent the erection of the pitched roof by qualifying as “owner or occupiers of any of the adjoining or neighbouring property” under subclause 2(e).)
[38] On analysis of the conflict of commercial realities and merits between (a) confining the person who can give consent under subclause 2(c) to Mrs Horn and (b) extending it to her successors in title to Priors Knock, my clear view would be that the greater commercial merits and realities lay in extending the definition of the person who could give consent. However, that is not the point. It is not for me, or the reasonable observer, to rewrite the contract that parties actually made into one that I, or the reasonable observer, think that they ought to have made.
[39] Put simply, therefore, the terms of the 1966 conveyance are clear and even applying “business common sense” this would not mandate a construction contrary to the express words used in the 1966 conveyance. It makes sufficient common sense (albeit perhaps not necessarily the greatest common sense) for Mrs Horn to be the only person who can give consent. Certainly, such an analysis is not “absurd”, nor one that necessarily flouts business common sense.
[40] It might be suggested that the draftsman of the 1966 conveyance has made some mistake in confining his definition of “the Vendor” in the way he did. However, for the reasons that I have already given, the draftsman clearly knew what he was doing in so confining his definition of the “the Vendor”. So there, at least, there is no mistake. The mistake, if it existed, would have to be a deeper conceptual one — and one that it is difficult to articulate. Presumably, it would be suggested that, somehow, the draftsman did not appreciate that the only person who could give consent following the onward sale of Priors Knock was Mrs Horn. However, it is very difficult to see how the draftsman even made a conceptual mistake of this nature granted his ability in the 1966 conveyance to refer to “successors in title” wherever he thought it appropriate.
[41] Mr Newsom drew my attention, in support of his submissions, to the decision of Hart J in Mahon v Sims [2005] 3 EGLR 67*. This was an appeal from HH Judge Kirkham, sitting in Birmingham County Court. However, Mahon had a fundamental difference from the present case. In Mahon, there was no reference whatsoever to successors in title (or heirs and assigns) in the covenant itself. It was this, when combined with section 78 of the 1925 Act, that opened up the way for Judge Kirkham and Hart J to adopt a construction that allowed the words “successors in title” to be implied after the words “the Transferors” wherever they appeared in the same covenant. In effect, the judges were saying in that case that because, in the opening words of the covenant itself, the words “and their successors in title” were to be implied, under section 78, after the words “the Transferors”, it was possible to construe the words “the Transferors” later in the same clause as also referring to “the Transferors and their successors in title”. As in City Inn, such a gateway to construction is not available in the present case because the 1966 conveyance clearly distinguishes between “the Vendor” and “her successors in title” and because the covenant in this case is made with “the Vendor her heirs and assigns”. However, only “the Vendor” is referred to in subclause 2(c).
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* Editor’s note: Also reported at [2005] 39 EG 138
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[42] It is true that, in [12] of his judgment, Hart J regarded the initial definition of “the Transferors” as being not, in itself, a defined expression to any greater extent than a term used by the transfer to describe the vendors personally. Moreover, as well as relying upon section 78 of the 1925 Act, Hart J regarded the use of express words of annexation as making it clear (to the legally informed reader) that the benefit of the covenant was intended to run with the retained land. These facts made it possible, in Mahon, to read the relevant reference to “the Transferors” (that is, in the context of who could give consent) as also including successors in title; and if that were a possible reading, it appeared to Hart J to be one that made far better sense of the covenant than the literal meaning.
[43] As to annexation, the Court of Appeal re-emphasised in Crest Nicholson Residential (South) Ltd v McAllister [2004] EWCA Civ 410; [2004] 2 P&CR 26† the necessity, as identified in Marquess of Zetland v Driver [1939] Ch 1, for a covenant, if it is to be enforceable as a restrictive covenant, to, inter alia, “touch and concern” the land, by which is meant that it must be imposed for the benefit of or to enhance the value of land retained by the vendor: see per Chadwick LJ, in [32]. However, a covenant can still “touch and concern” land if consent is to be given by a third party. At a bare minimum, that third party will not be able to act arbitrarily or capriciously in refusing consent, and a refusal for reasons that bear no relationship whatsoever to the benefited land must, of necessity, be arbitrary or capricious. Further, the benefit of the covenants in question in this case had to be annexed to Priors Knock so that they could be enforced, in equity, against successors in title of Mr Badman to Swaynes Jumps (even if the only person who could give consent were Mrs Horn). So the fact of annexation is not, to my mind, conclusive in any way, and the reasoning that found favour with Judge Kirkham and Hart J in Mahon cannot govern in respect of the 1966 conveyance, granted its express terms as analysed above. |page:171|
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† Editor’s note: Also reported at [2004] 2 EGLR 79; [2004] 24 EG 150
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[44] Mr Jackson, naturally, relied upon the decisions of Mr Alan Steinfeld QC at first instance (see [2007] EWHC 1829 (Ch)*) and of the Court of Appeal in City Inn. Obviously, on its facts, that case was different from the present in that there was a strong commercial imperative or justification for the Port of London Authority to retain the giving of consent to itself, in that the Port of London Authority seemed as permanent as the nearby Tower of London (Jacob LJ, in [31]) and in that one of the relevant covenants expressly referred to the “Estate Officer” for the time being of “the Transferor”. I have already dealt with the major points of principle that arise from City Inn. I would, perhaps, add only what Jacob LJ had to say in [31]. It is not always the case that in construing a document, the court must assume that the parties have thought of every “what if?”. Here, it is quite possible that Mrs Horn was concerned only with giving consent herself, and neither she nor Mr Badman directed their minds to the “what if” that would arise when she died or became untraceable.
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* Editor’s note: Also reported at [2007] 3 EGLR 59; [2007] 46 EG 178
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[45] So far, I have dealt with Mr Newsom’s submissions on the basis of contractual interpretation. To the extent that he relied upon the implication of a term, it seems to me that there are no grounds whatsoever for any such implication, if only because:
(i) the suggested term is not necessary to give business efficacy to the 1966 conveyance. The implication of the term merely gives a different business efficacy to the 1966 conveyance;
(ii) I do not think that it can be said that any suggested term is so obvious that it “goes without saying”; and
(iii) in my view, any suggested implied term would contradict the express terms of the 1966 conveyance.
(See the five requirements that must be satisfied before a term will be implied as identified by Lord Simon of Glaisdale in BP Refinery (Westernpoint) Pty Ltd v Shire of Hastings (1978) 52 AJLR 20, at p26.)
Issue (1)
Conclusion
[46] On issue (1), my view on the true construction of the 1966 conveyance is that, under subclause (2)(c), the plans have to be and can be approved by Mrs Horn and Mrs Horn alone.
Issue (2)
Analysis
[47] In these circumstances, Mr Jackson, on behalf of Mr Margerison, contended that the restrictions contained in subclause 2(c) of the 1966 conveyance have effectively been discharged (Mrs Horn being dead and no longer able to give consent). Mr Newsom, on behalf of Mr and Mrs Bates, contended that because the dispensing power conferred upon Mrs Horn by subclause 2(c) cannot now be exercised, the restrictions contained in subclause 2(c) have become absolute.
[48] Mr Newsom’s submissions accord with what was once undoubtedly perceived to be the position. Thus, in Bell v Norman C Ashton Ltd (1956) 7 P&CR 359, Harman J held that where the only persons who could consent were the original vendors and they had ceased to be available, there was no dispensing power and, hence, the covenant was absolute. A similar conclusion was reached in Briggs v McCusker [1996] 2 EGLR 197, albeit that Judge Rich QC, sitting as a judge of the High Court, seems to have considered himself bound by the reasoning of the earlier decision of the Court of Appeal in In re Beechwood Homes Ltd’s application [1994] 2 EGLR 178†. However, it is perhaps worthy of note that, in Re Beechwood, Dillon LJ said, at pp179M-180B, that the case had proceeded below in the Lands Tribunal and had therefore to proceed in the Court of Appeal on the common basis that the power to consent was a dispensing power attached to another otherwise absolute prohibition.
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* Editor’s note: Also reported at [1994] 28 EG 128
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[49] The issue was considered again by Neuberger J in Crest Nicholson [2002] EWHC 2443 (Ch); [2003] 1 EGLR 165. The matter went to the Court of Appeal on a point that had not been argued before Neuberger J, but the Court of Appeal added, albeit not as part of its decision, that it saw no reason to differ from the conclusions reached by Neuberger J on the issues that he had decided. As Chadwick LJ (with whom Arden LJ and Auld LJ agreed) said, in [53], he thought that Neuberger J was right and for the reasons that he had given.
[50] The essential point being made by Neuberger J in Crest Nicholson was that the issue absolute/effectively discharged was a question that did not depend upon rules of law contained in the authorities but, rather, was a matter of construction or, perhaps, a matter as to whether a term should be implied. Of these two differing approaches, Neuberger J favoured the former: see [54]. I do, however, note that Neuberger J was satisfied that if an implied term were required, the five tests identified by Lord Simon were, on the facts of that case, satisfied.
[51] Neuberger J held, in Crest Nicholson, that the restrictive covenants had been effectively discharged through the disappearance of the only persons who could give consent. I reach an identical conclusion on the facts of the present case and, broadly, for the same reasons as those identified by Neuberger J, albeit applying those reasons to the specific facts of this particular case. To summarise:
(1) I accept that Mr Newsom’s submission may have the merit of being in accord with a strict literal meaning of subclause 2(c) (but see (4) below). However, it seems to me that such a strict literal meaning flouts common sense and cannot properly reflect the true intention of the parties to the 1966 conveyance (objectively analysed in accordance with the principles that I have identified above). It cannot, to my mind, have been their true intention that, following the death of Mrs Horn, no addition, enlargement or alteration to the bungalow whatsoever could ever be undertaken. What if, for example, the bungalow were entirely, or partially, damaged by fire? Somewhat less dramatically, what if some minor addition or alteration were needed to, for example, rectify a major defect in the roof? Doubly so is this the case since subclause 2(c) is what is frequently described as a “regulatory” restriction — it does not seek to prevent the very existence of the bungalow on Swaynes Jumps. It was merely concerned with giving Mrs Horn a degree of control over the plans for any addition, enlargement or alteration. Addition, enlargement or alteration is not prohibited as such, it is merely the form thereof that subclause 2(c) seeks to regulate. The bungalow is on Swaynes Jumps perfectly properly (presumably in accordance with consent given by Mrs Horn under subclause 2(a)). It would seem strange, indeed perverse, if, following the death of Mrs Horn, it could not be added to, enlarged or altered in any way. Mr Badman paid a substantial sum of money for Swaynes Jumps and for the right under subclause 2(a) to build the bungalow thereon.
(2) The perversity that I have just identified is reinforced by the fact that, under subclause 2(c), Mrs Horn’s consent to the relevant plans could not be unreasonably withheld. It would seem astounding if, following her death, not merely could approval not be given but also no alteration and so on to the bungalow whatsoever could ever be effected in the future.
(3) Conversely, granted the construction that I have given to the words “the Vendor” in respect of issue (1), I find no perversity in subclause 2(c) being effectively discharged. If, as I have found to be the case, the consent to be given was that of Mrs Horn alone (she being concerned, for whatever reason, with her occupation of Priors Knock while she remained alive), there is no perversity in the restrictions in subclause 2(c) falling away after her death. To render the restrictions in subclause 2(c) absolute following her death is effectively, by a side wind, to confer further and greater benefit on Mr and Mrs Bates than would have been the case had I decided issue (1) in their favour. That is indeed perverse.
(4) I accept that, at first blush, it appears necessary to do some violence to subclause 2(c) to reach my conclusion, but that is only at first blush. The suggestion of violence to language depends upon breaking subclause 2(c) into independent component parts namely: (i) the restriction; and then (ii) the dispensing power. However, if subclause 2(c) is construed as a whole, it is easier to see how, as a question of construction, if there is no Mrs Horn there is also no |page:172| restriction. This I understand to be the point made by Neuberger J, in [52] of Crest Nicholson, namely that the exception (that is, the dispensing power) is so fundamental to the prohibition that if the exception is discharged, the prohibition is discharged with it. The prohibition and the exception are so intimately bound together that if one goes so does the other: see per Neuberger J, in [54]. I do not see how the reasonable observer, examining the terms of the 1966 conveyance, could have reached any other conclusion.
(5) Mr Newsom suggested that I could take into account the possibility of discharge or modification by the Lands Tribunal of the restrictive covenants if they did indeed become absolute. This, he said, mitigated the effect of their becoming absolute. However, I can construe the 1966 conveyance only by reference to facts that existed at the date upon which the same was executed. Section 84(1) of the 1925 Act was amended and relaxed only by the Law of Property Act 1969. In 1966, obtaining release or discharge of covenants such as those contained in subclause 2(c) was far more difficult, and I can attach no significance to this particular point.
[52] To my mind, the answer to issue (2) is a question of construction of the 1966 conveyance, not a question of implication of a term. For my part, I would have doubted, had the Court of Appeal not approved what Neuberger J had said, that it would be appropriate to imply a term to effect discharge of the relevant restrictions. However, I need say no more on this point because I am content to reach my conclusion as a matter of construction of the 1966 conveyance, an approach that must be open to me granted the approval by the Court of Appeal of that part of Neuberger J’s approach in Crest Nicholson that directed itself to construction.
Issue (2)
Conclusion
[53] In my judgment, the restrictions contained in subclause 2(c) were discharged on the death of Mrs Horn. Mr Margerison is not subject to any absolute prohibition against making additions, enlargements or alterations to the bungalow.
[54] I should, however, add something about the effect of my judgment upon the restrictions contained in subclause 2(a). The requirements for plans and elevations to be approved by Mrs Horn and for her to approve the site upon which the bungalow was to be erected are contained in a separate sentence. Those requirements have clearly been effectively discharged by the death of Mrs Horn (in accordance with my reasoning set out above). However, I do not think that the effect of the death of Mrs Horn is, on the true construction of subclause 2(a), to discharge the remainder of the restrictions contained in subclause 2(a). Thus, the restriction against erecting or building anything save one bungalow, with a ridge height not exceeding 20ft, with suitable outbuildings and motor garage annexed thereto, and the restriction against using any such bungalow for any purpose other than as a private dwelling-house or the professional residence of a medical practitioner or dentist continue. I have not heard any submissions as to the true meaning and effect of subclause 2(a). Self-evidently, the user restriction must continue. What has not been addressed before me and, hence, what I express no view upon, is whether the restriction against building anything save one bungalow with a ridge height not exceeding 20ft was spent when the bungalow was itself built or whether those restrictions continue. I can see that issues could arise as to whether the bungalow could or could not be replaced by another bungalow in a different location.
Issue (3)
Analysis
[55] Granted my conclusions on issues (1) and (2), this issue does not arise for decision. However, I think that I should express my views thereon lest a different view be subsequently taken on issues (1) and (2).
[56] I can address issue (3) relatively briefly, partly because I have set the facts out in detail in the earlier part of this judgment, but primarily because the answer thereto is, to my mind, crystal clear.
[57] Subclause 2(c) requires “plans” to be submitted to and approved by (on this hypothesis) Mr and Mrs Bates and for their consent to be in writing. I am not entirely sure that subclause 2(c) was ever properly triggered in the sense that the parties appear to have corresponded on the proposed pitched roof without the Gregsons or Mr Margerison actually submitting specific plans for approval. Perhaps this was because Mr and Mrs Bates had made clear, at the earliest opportunity, their implacable opposition to the pitched roof for which planning permission had been sought. Most sensibly, no technical point on this was ultimately taken by either party before me and I shall proceed upon the basis that consent had been validly sought by the Gregsons and Mr Margerison under subclause 2(c) for the mock-up roof that I saw on site and that such consent had been refused.
[58] Mr and Mrs Bates were not entitled to refuse their consent unreasonably. Now, were this a matter of reasonability generally, balancing the interests of Mr Margerison as freehold owner of Swaynes Jumps against the interests of Mr and Mrs Bates as freehold owners of Priors Knock, and taking into account the nature of the locality generally but ignoring the existence of the restrictive covenant, I might have been inclined to the view that Mr and Mrs Bates were acting unreasonably in withholding their consent. Although, undoubtedly, the intended pitched roof would have adversely affected Mr and Mrs Bates’ visual amenity, there was nothing unreasonable in Mr Margerison wishing to replace a problematic flat roof with a pitched roof (which would be in keeping with other houses in the area). It seems to me that the council, on this analysis, got matters exactly right when considering whether or not to grant planning permission.
[59] However, this is not the correct approach to the problem. It overlooks entirely that, on this hypothesis, Mr and Mrs Bates have the benefit, as a proprietary right, of the restrictions contained in subclause 2(c). They are therefore entitled to look at this issue through the prism of their own property rights under the restrictive covenant. They are not obliged to take into account wider considerations relating to the locality or the reasonableness of Mr Margerison wishing to have a pitched roof on his property. They are entitled to say that the very purpose of the restrictive covenant is to give them, as freehold owners of Priors Knock, rights superior to those conferred by planning control.
[60] It was, no doubt, for reasons such as this that Mr Jackson, on behalf of Mr Margerison, very fairly and properly conceded that the test that I should apply is that as set out by Hart J in Mahon. In [29], Hart J said:
In the present context, I do not think that it does make any practical difference whether the implied proviso is expressed as “not to be arbitrarily or capriciously withheld” or as “not to be unreasonably withheld.
If the implied proviso takes the latter form, it is important to bear in mind that this does not have the consequence that the court can, at the invitation of the covenantor, simply substitute its judgment as to what is reasonable for that of the covenantee. All the proviso means is that refusal of approval will be unreasonable if the court is satisfied that no reasonable covenentee would have refused approval in the circumstances. It is clear that the protection of the sensibilities of the covenantee is one of the purposes of the covenant in this case. The test, which the implied proviso requires in a context such as the present, is one that pays full respect to those sensibilities so far as any particular proposal is concerned. It will be only if satisfied that no reasonable neighbour could object to the proposal that the court will be justified in overriding a decision by the covenantee to refuse approval. If the refusal was on a subjective ground, upon which the opinions of reasonable neighbours might differ, that will, in a context such as the present, be reasonable ground enough. In my judgment, the application of such a test will not therefore deprive the covenantee of what the judge described as the ability “to exercise firm control over any building”. It will however prevent it from acting arbitrarily or capriciously or from improper motives.
[61] This test clearly indicates that a person with the benefit of a restrictive covenant is entitled, when deciding whether to grant consent, to look at matters through the prism of his own self-interest (so far as that self-interest relates to the use and enjoyment of the benefiting land). Only if no reasonable covenantee would have refused approval can the court intervene. The court is not to impose its own view for that |page:173| of the covenantee and must recognise that where subjective issues are involved then again the covenantee is entitled to his subjective views.
[62] I have viewed the mock-up roof from the ground-floor entertaining rooms of Priors Knock. It is self-evident to me that the pitched roof, if built, will occupy a space that is presently open air and that presently gives Mr and Mrs Bates a distant view of certain trees (some of which at least, it was conceded, were subject to tree preservation orders). Mr and Mrs Bates say that they like their present view, that they like the bungalow at its present height and that they like the open air above the flat roof and the view of trees in the distance beyond it. That open air will be filled, if the pitched roof is built, by a structure that will undoubtedly make the bungalow considerably more visible and intrusive from their ground-floor entertaining rooms. Granted the dimensions that I identified earlier, the pitched roof will be a substantial structure and Mr and Mrs Bates say that they do not want it. It will adversely affect, they say, their visual amenity. That seems to me to be a perfectly reasonable view and, from the beginning, Mr and Mrs Bates have objected to the erection of the pitched roof on the ground of their visual amenity. Having seen the site, and the mock-up of the pitched roof, I most certainly cannot say that no reasonable covenantee would have refused approval on visual amenity grounds to the pitched roof. Indeed, I can go further and say that had I been the freehold owner of Priors Knock and had I looked at this issue through the prism of my own self-interest as such owner, I too might well have objected to the erection of the pitched roof. In saying this, I do not seek to substitute my own judgment for that of Mr and Mrs Bates. I simply make the point to underline the fact that I cannot possibly find that no reasonable neighbour would have refused consent on the grounds of visual amenity. It was not argued before me that Mr and Mrs Bates’ visual amenity was not something that was properly protectable by subclause 2(c); nor was it argued that they were acting from “improper motives”. It follows, granted my findings, that they most certainly were not acting unreasonably, arbitrarily or capriously in refusing their consent.
Issue (3)
Conclusion
[63] Accordingly, on issue (3) I entirely reject Mr Margerison’s claim that consent for the erection of the proposed pitched roof was unreasonably withheld by Mr and Mrs Bates.
Hand down
[64] I intend to circulate a copy of this judgment to the parties in draft. That draft judgment is subject to the restrictions set out in para 2.4 of the practice direction — reserved judgments to CPR 40. If the parties are able to agree a minute of order reflecting the terms of this judgment and all consequential matters, they need not attend on hand down. I, or some other judge, will hand this judgment down on a date to be appointed. The parties will be notified of that date and time limits for appealing will run from the date of actual hand down. I appreciate that the parties may seek permission to appeal and, if they do, I am content to deal with that by way of telephone hearing in order to minimise costs. I am also content to deal with any other disputes between the parties as to the form of the minute of order and all consequential issues by telephone, again to save costs. However, if either party wishes for an oral hearing, that party is entitled to such a hearing. At such oral hearing, I will first hand down this judgment myself and then hear the consequential submissions. That hearing will be arranged by the court to reflect the availability of the parties and myself.
Summary
[65] Accordingly, on the issues that arise:
(1) I find that in subclause 2(c) of the 1966 conveyance the reference to “the Vendor” is a reference to Mrs Horn and to Mrs Horn alone;
(2) Mrs Horn having died, the restrictions contained in subclause 2(c) have been discharged and Swaynes Jumps is no longer bound thereby; and
(3) Were the issue to have arisen, I would have found that Mr and Mrs Bates’ refusal of consent to the proposed new pitched roof at Swaynes Jumps was not unreasonable.
Judgment for the claimant.