Council purchasing land and covenanting to build drainage system to accept surface water discharging from retained land – Developer purchasing retained land and applying for planning permission – Planning permission granted on condition lagoon constructed – Whether council liable for costs and loss thereby incurred – Claim rejected – Appeal dismissed
By a conveyance made on 6 September 1993, M conveyed two small strips of land at Reddings Road, Badgeworth, Gloucester, to the defendants. The defendants required the land, in their capacity as the local highway authority, for the construction of the A40/A46 link road. M retained a substantial area of land adjacent to the proposed road. The conveyance contained a covenant whereby the defendant was: “To provide and thereafter to maintain until adopted by the relevant Water Authority a drainage system within the A40/A46 Link Road to accept the surface water discharge resulting from the future residential development of the Retained Land for the provision of a maximum of 50 dwelling units” (the drainage system).
A drainage system was duly constructed together with the A40/A46 link road. Subsequently M sold the retained land to the claimant. It was common ground that the drainage system built was physically capable of accepting the surface water discharge from the retained land, but that it did not do so legally, because the system carried the water to a nearby brook that was not capable of accepting the quantity of water in storm conditions. The claimant was granted permission to develop 31 houses on the retained land, subject to a condition that a lagoon was built to regulate the flow of water to the drainage system and thereby avoid flooding in storm conditions. The claimant built the lagoon but was only able to build 30 houses on the land. The claimant issued proceedings claiming the costs of building the lagoon and the loss caused by only being able to build 30 rather than 31 houses. The claimant contended that the covenant had required the defendants to build a drainage system that was both physically and legally capable of disposing of the surface water from the land, and therefore the defendants were liable for its loss.
Held: The appeal was dismissed.
In order to ascertain the scope of the covenant, it was necessary to look at the circumstances when it was entered into, which was before the construction of the works and before an application for planning permission was made. It could not have been known until planning permission was granted that a condition would be imposed, requiring a lagoon to be built to regulate the flow of surface water. It was impossible to extend the obligation of the covenant to the extent sought by the claimant either by a natural or purposive construction or by implication.
David Iwi (instructed by Rawlinson & Butler, of Crawley) appeared for the plaintiff; Martin Rodger (instructed by Clarke Willmott & Clarke, Bristol) appeared for the defendant.
Thomas Elliott, barrister
