Land – Conveyance – Restrictive covenant – Claimant seeking declaration that defendant’s property subject to restrictive covenant limiting construction on land to one detached dwelling house – Defendants applying for summary judgment in their favour and declaration that proposed development of block of flats not breach of covenant – Application dismissed
The claimant was the freehold owner of residential premises at 432 Selsdon Road, South Croydon. The first defendant was the freehold owner of No 444. Both properties were detached dwelling houses, formerly a part of land then owned by the Whitgift Educational Foundation and known as the Governors Fox Farm Estate.
No 432 was sold out of the estate by a conveyance dated 7 November 1947. No 444 was sold out of the estate by a conveyance dated 3 October 1947. By paragraph 7 of the third schedule to the October conveyance, the purchaser of No 444 covenanted that “No building (should) be erected on the (land conveyed) except one detached dwelling house… which said property (should) not be used other than as a private residence”.
Paragraph 11 of the third schedule provided that “The governors reserve the right to deal with any of the plots situated upon this estate or any of their adjoining or neighbouring land without reference to and independently of these stipulations and also reserve the right to allow a departure from them…”.
The second defendant held an option to purchase No 444 and applied for planning permission for the demolition of the existing house and the construction of a block of nine residential apartments.
The claimant sought a declaration that No 444 was subject to the restrictive covenant in the terms of paragraph 7. The defendants applied for summary judgment in their favour on the claim and a declaration that following the execution of the deed of modification the development of No 444 would not be a breach of paragraph 7.
Held: The application was dismissed.
(1) Declaratory relief was not available as of right, simply upon proof of the facts which gave rise to the right in law in respect of which declaratory relief was sought. Further, the court would not grant declaratory relief if the application was premature, or if the question was hypothetical, or would serve no useful purpose.
A declaration which merely clarified the parties’ legal rights did not, in itself, serve a useful purpose and could properly be regarded as academic or hypothetical. However, where the clarification of the parties’ rights served a useful purpose, the grant of relief would not, in principle, be academic, premature or hypothetical.
It was over-simplistic to treat a question as hypothetical and ineligible for declaratory relief where the facts relevant to the grant of that relief had not yet occurred. The facts should not be treated as hypothetical as long as they were likely to occur within a reasonable timescale. Further, if sensible and practical reasons existed for the grant of a declaration, that relief would be available even though the events that were the subject of the declaration had not and might not happen: San Juan v Allen [2016] EWHC 1502 (Ch) followed.
(2) It was not wrong, in principle, where a clear dispute existed between the parties as to the legal effect of an event which, subject to the court’s conclusion, was highly likely to occur and would have significant consequences for the parties, for the court to resolve the dispute at an early stage rather than wait upon the happening of the event and then to rule ex post facto upon its effect or consequences. The present case fell within that parameter. The dispute as to the meaning and effect of paragraph 11 of the third schedule was fully pleaded and there was no lack of clarity as to the issue in debate and the issue was “live” between the parties.
There was no dispute that the opening words of paragraph 11 reserved to the foundation and its predecessors the right, in its dealings with the estate and its adjoining and neighbouring land, to deal with those lands without reference to, and independently of, the restrictions imposed in respect of No 444. Therefore, there was no obligation to impose the like restrictions over any other of its lands when disposing of them. The width of those words was sufficient to enable, or allow, the foundation or its predecessors when disposing of other lands to impose restrictions which were different to those imposed upon No 444.
In determining the proper construction of the latter part of paragraph 11, the court’s task was to consider the language of the provision in its context, giving such weight as was appropriate in the circumstances. In so doing, the court could test rival constructions against the touchstone of commercial common sense. However, the court had to be careful not to invoke commercial common sense so as to undervalue the language of the provision under examination. The court also had to construe the instrument before it on its own terms and in its own context and to appreciate that similar phrases used in other contexts might well bear different meanings: Wood v Capita Insurance Services [2017] AC 1173 applied.
(3) The weight to be given to arguments based upon surplusage, and the approach to be adopted to the construction of a reservation, were also relevant to construction upon the particular facts and arguments in this case.
As to the former, there was a powerful body of judicial wisdom and experience to the effect that, particularly in respect of conveyancing documents, where traditionally draftsmen had adopted a “torrential” style of drafting, arguments based upon surplusage, or redundancy of language, carried little weight.
As to the latter, there was a settled rule of construction to the effect that, when construing a reservation or exception to a grant, the court would construe that reservation contra proferentem the grantor and in favour of the grantee.
(4) The very clear context in which paragraph 11 fell to be construed was the evident intent of the governors not to create a building scheme, or a system of mutually enforceable covenants or local law over, or in respect of, the estate. The words “in any one or more cases” did not allow the governors to retrospectively depart from restrictions already imposed. It followed that, although it would be appropriate to grant the declaration sought by the defendants, should the facts justify it, no such declaration would be granted and the defendants’ application for summary judgment would be dismissed.
Mark Warwick QC (instructed by Wellers Law Group LLP of Bromley) appeared for the claimant; Carl Fain (instructed by Davitt Jones Bould of Taunton) appeared for the defendants.
Eileen O’Grady, barrister
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