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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Birdlip Ltd v Hunter & Anor [2015] EWHC 808 (Ch) (24 March 2015) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2015/808.html Cite as: [2015] EWHC 808 (Ch) |
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CHANCERY DIVISION
Strand London WC2A 2LL |
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B e f o r e :
____________________
 BIRDLIP LIMITED |
Claimant |
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| - and - |
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| (1) ANDREW PENNINGTON HARVARD HUNTER (2) MICHELLE HUNTER |
Defendants |
____________________
Wayne Beglan (instructed by SJS Law) for the Defendants
Hearing dates: 2nd and 3rd March 2015
____________________
Crown Copyright ©
Judge Behrens :
1. Abbreviations
| Ashlea | Ashlea House, 46 Bulstrode Park Way Gerrards Cross |
| Birdlip |
Birdlip Ltd |
| Little Orchards | Little Orchards, Layters Way, Gerrards Cross |
| The 1909 Indenture | The Indenture dated 3rd May 1909 |
| The 1910 Indenture | The Indenture dated 18th April 1910 |
| The 1925 Act | The Law of Property Act 1925 |
| The Association | The Bulstrode Way and Layters Way 1908 Covenantors Association |
| UT | The Upper Tribunal (Land Chamber) |
2. Introduction
Birdlip is the owner of Little Orchards. Mr and Mrs Hunter are the owners of Ashlea. As can be seen from Birdlip's Land Registry Plan, part of Little Orchards' southern boundary is Ashlea's northern boundary. The properties are accordingly adjoining.
Birdlip was granted planning permission to build two new detached dwelling-houses on part of Little Orchards. The title deeds for Little Orchards contain restrictive covenants. It is not in dispute that if those covenants are enforceable and not modified they will prevent the development from going ahead.
Birdlip contends that there is no such scheme and that the covenants are unenforceable.
Birdlip has instituted 2 sets of proceedings. On 27th March 2013 Birdlip issued these Chancery proceedings seeking a declaration under s 84(2) of the 1925 Act that the restrictive covenants were not enforceable by Mr and Mrs Hunter. Birdlip had sufficient confidence in its claim to issue an application for summary judgment. On 4th November 2014 after 2 days of argument Master Bowles delivered a detailed reserved judgment and a detailed addendum to deal with matters raised after he had sent out a draft of his judgment. It was the view of Master Bowles that Mr and Mrs Hunter did not merely have an arguable case that there was an enforceable scheme. In his view they had a strong case for such a scheme. Accordingly he gave directions for trial. On 21st November 2014 Birdlip sought permission to appeal from Master Bowles's decision. The application for permission was listed before me. However before it was heard the parties agreed to treat the hearing before me as the trial of the action.
Birdlip issued an application to the UT under s 84(1) of the 1925 Act for an order modifying or discharging the restrictive covenants. 8 objections have been received from persons who contend that they are entitled to enforce the covenants as part of the scheme. By order dated 9th September 2014 the Registrar ordered that the objector's entitlement to object to the application be determined at a s 84(3A) hearing. That hearing is listed before me in addition to the Chancery trial. It is not in dispute that if the restrictive covenants are enforceable under the local scheme the objectors are entitled to object. On the other hand if there is no enforceable scheme they are not. It follows that the hearing raises the same question as the Chancery trial.
3. The Evidence
1. The Title to Little Orchards. As will appear below this comprises two Indentures made in May 1909 and April 1910. The 1909 Indenture is in manuscript and in some respects the copy now available is difficult to read. I was, however, provided with a typed copy. The 1910 Indenture is only available in abstract form.
2. Conveyances of other properties in the area which contain restrictive covenants in similar but not identical form. 18 such conveyances were produced covering the period between 24th August 1906 and 16th February 1914.
3. Agreements for the sale of Lots 38 and 116. The first is dated 3rd February 1908 and the second is dated 16th February 1914. Each of the agreements is printed on what appears to be a standard form with manuscript additions. Each of the agreements incorporates a lotted plan. Mr and Mrs Hunter rely on the 1908 plan to define the estate over which the local scheme operates. There are, however, significant differences between the 1908 plan and the 1914 plan.
4. Historical Evidence. This consists of passages from a 2006 History of Gerrard's Cross by Julian Hunt and David Thorpe; evidence relating to the Association; evidence relating to decisions of the Lands Tribunal where two attempts to modify the covenants by occupiers under s 84 of the 1925 Act were each rejected and evidence relating to another application which was compromised.
4. The Title to Little Orchards
Birdlip's ownership. The western part of the land, which is shown coloured pink on the plan was conveyed to Birdlip's predecessor in title in an Indenture dated 3rd May 1909. The eastern part of the land originally formed part of the land conveyed to Mr and Mrs Hunter's predecessor in title in an Indenture dated 18th April 1910.
" by the purchasers 'for themselves their respective heirs executors administrators and assigns .. with the Vendors their heirs and assigns and other[1] the owner or owners for the time being of the adjoining and adjacent estate now or formerly belonging to the Vendors in the Parishes of Chalfont St Peter Gerards Cross and Iver that the Purchasers their heirs and assigns' would 'at all times hereafter observe and perform the .. stipulations and restrictions specified in the Schedule' to the conveyance."
" with the intent to bind all persons in whom the hereditaments hereby conveyed shall for the time being be vested but not so as to be personally liable under this covenant after he shall have parted with the same' covenanted 'with the Vendors and the survivor of them their and his assigns and other the owners or owner for the time being of the adjoining or adjacent estates now or formerly belonging to the Vendors in the Parishes of Chalfont St Peter Gerards Cross and Iver that he the Purchaser' would 'observe and perform the stipulations and restrictions contained in the Schedule' to the conveyance 'so far as the same' were 'applicable to the hereditaments' conveyed".
No building other than one or two detached residences shall be erected on the said property hereby conveyed
Birdlip if the proposed dwellings are erected.
1. For the fencing of the land conveyed or the protection of existing hedge; The fencing is to be of material approved by the Vendors' surveyor and was to be erected within one month
2. For a minimum prime cost of £750 for the house to be built on the 1910 Indenture land and £500 for any house on the 1909 Indenture land;
3. For the houses constructed to be detached;
4. For the houses constructed to be used only as private or professional residences and not to be let out as flats;
5. For no detached privy or water closets to be built on the land;
6. For the land not to be used "for any purpose which should in any way be a damage to the Vendors their previous or future assigns or tenants or to the owners or tenants of adjoining or adjacent property";
7. For washing not to be hung out to dry on the conveyed land;
8. For no temporary or travelling buildings or caravans to be placed on the conveyed land subject to an exception where it was incidental to the erection of permanent buildings.
9. For no permanent building to be constructed on the conveyed land until plans and elevations had been approved by the Vendors surveyor. The Vendors' surveyor's approval of the plans was subject to payment of the fee "(not exceeding one guinea per house)" and "shall be paid by the person by whom the plans are submitted." The 1910 Indenture continued:
Such approval is required only for the mutual benefit of all purchasers to prevent depreciation of the property by the construction of unsightly buildings e.g. the covering of roofs will be restricted to tiles or best quality green Westmoreland slates
That sentence is not to be found in the 1909 Indenture.
10. For restriction of the construction of buildings outside the building line shown on the approved plans or within ten feet of the boundaries.
11. For the purchaser to refuse permission for any traction engines to pass over roads on the estate to deliver materials to the conveyed land.
Both conveyances contained a reservation by the Vendors of their right to vary the stipulations and restrictions. However the wording in the two Indentures is not identical. In the 1909 Indenture the right is "in regard to the remainder of the properties in the neighbourhood". In the 1910 Indenture the right is "so far as regards the other parts of their Estate"
The estate referred to in stipulation (11) above and in respect of which the vendors, Mr Hampton and Mr Moon reserved the right to vary the various stipulations in the 1909 and 1910 conveyances is not defined at all in the conveyances.
5. The covenants in the other conveyances
1. the expression "the other parts of their estate" is used on 15 occasions. In one of these (only) the parcels clause contains express reference to the land being conveyed being part of the "Gerard Estate at Gerards Cross." Another contains a proviso in relation to variations to 3 specific Lots.
2. the expression "the remainder of their properties in the neighbourhood" is used on 3 occasions.
3. the expression "the right to vary these stipulations and restrictions" is used on 2 occasions.
4. On 2 occasions there is no express right to vary at all.
6. The Agreements for Lots 38 and 116
6.1 The terms of the Agreements
the purchaser shall covenant 'for his heirs their executors administrators and assigns .. with the Vendors and the survivor of them their and his assigns and other, the owner or owners for the time being of the adjoining and adjacent estate now or formerly belonging to the Vendors in the Parishes of Chalfont St Peter Gerard's Cross and Iver that the Purchasers his heirs and assigns' will 'at all times hereafter observe and perform the said stipulations and restrictions but the Vendors shall not be bound to enforce or effectuate the said stipulations or restrictions or the liabilities mentioned therein.
6.2 The 1908 Plan
THE ESTATE BOUNDARIES ARE EDGED IN RED, AND THE SITES AS AT PRESENT STAKED OUT FOR SALE ARE COLOURED PINK
6.3 The 1914 Plan
Birdlip places considerable reliance on the fact that the south western boundary of this part of the Estate has changed from that shown in the 1908 plan. In particular the area shown as sold to the north of what was The Vicarage is shown outside the red line in the 1914 plan and inside the line in the 1908 plan.
Birdlip also places considerable reliance on the area to the west of Packhorse Lane. The 1914 plan does not purport to show that area in detail at all. To the south of Bulstrode Way it shows only lots 27 and 27A (which are for sale) within the red line. To the north there is a red line abutting Bulstrode Way extending as far as the end of Lot 27. According to the 1908 plan the property opposite Lot 27 had been sold and was within the Estate.
7 Historical evidence
7.1 The History of Gerrard Cross
1. Bulstrode Way was laid out in January 1906. The common vendors laid out about 35 building plots along the new road. The development of Bulstrode Way was slow to start. Only 2 plots were sold in 1906 and 5 in 1907. Twenty-two plots were sold in 1908.
2. The first section of Layters Way which contains several notable houses was developed between 1908 and 1910.
3. Marsham Way was laid out on land formerly belonging to Marsham Farm. The first houses were developed in 1906 and development continued until 1922.
4. The book contains a photograph of part of a plan of what is described as "Plan of the Building Plots on Bulstrode Way marketed by Hampton & Sons 1907". The plan is not identical to the 1908 plan but (so far as can be ascertained) the boundaries of the estate on the part of the plan photographed coincide with the red lines on the 1908 plan.
7.2 The Association
7.3 The decisions of the Lands Tribunal
It has not been argued that there is a building scheme affecting the estate but there may be.
7.4 The compromise
8. The Law
"it must be proved (1.) that both the plaintiffs and defendants derive title under a common vendor; (2.) that previously to selling the lands to which the plaintiffs and defendants are respectively entitled the vendor laid out his estate, or a defined portion thereof (including the lands purchased by the plaintiffs and defendants respectively), for sale in lots subject to restrictions intended to be imposed on all the lots, and which, though varying in details as to particular lots, are consistent and consistent only with some general scheme of development; (3.) that these restrictions were intended by the common vendor to be and were for the benefit of all the lots intended to be sold, whether or not they were also intended to be and were for the benefit of other land retained by the vendor; and (4.) that both the plaintiffs and the defendants, or their predecessors in title, purchased their lots from the common vendor upon the footing that the restrictions subject to which the purchases were made were to enure for the benefit of the other lots included in the general scheme whether or not they were also to enure for the benefit of other lands retained by the vendors. If these four points be established, I think that the plaintiffs would in equity be entitled to enforce the restrictive covenants entered into by the defendants or their predecessors with the common vendor irrespective of the dates of the respective purchases. I may observe, with reference to the third point, that the vendor's object in imposing the restrictions must in general be gathered from all the circumstances of the case, including in particular the nature of the restrictions. If a general observance of the restrictions is in fact calculated to enhance the values of the several lots offered for sale, it is an easy inference that the vendor intended the restrictions to be for the benefit of all the lots, even though he might retain other land the value of which might be similarly enhanced, for a vendor may naturally be expected to aim at obtaining the highest possible price for his land. Further, if the first three points be established, the fourth point may readily be inferred, provided the purchasers have notice of the facts involved in the three first points; but if the purchaser purchases in ignorance of any material part of those facts, it would be difficult, if not impossible, to establish the fourth point."
"It is now well established that there are two prerequisites of a building scheme namely: (1) the identification of the land to which the scheme relates, and (2) an acceptance by each purchaser of part of the lands from the common vendor that the benefit of the covenants into which he has entered will enure to the vendor and to others deriving title from him and that he correspondingly will enjoy the benefit of covenants entered into by other purchasers of part of the land. Reciprocity of obligations between purchasers of different plots is essential.
In Reid v. Bickerstaff [1909] 2 Ch 305 , 319, Cozens-Hardy M.R. said:
"What are some of the essentials of a building scheme? In my opinion there must be a defined area within which the scheme is operative. Reciprocity is the foundation of the idea of a scheme. A purchaser of one parcel cannot be subject to an implied obligation to purchasers of an undefined and unknown area. He must know both the extent of his burden and the extent of his benefit. Not only must the area be defined, but the obligations to be imposed within that area must be defined. Those obligations need not be identical. For example, there may be houses of a certain value in one part and houses of a different value in another part. A building scheme is not created by the mere fact that the owner of an estate sells it in lots and takes varying covenants from various purchasers."
The existence of these matters is a question of fact to be determined from the terms of the titles and the relevant circumstances surrounding the sales by the common vendor to the various purchasers."
Inference and Speculation
"But we are bound to deal with this case upon the evidence as it stands, and to shun conjecture, however plausible and attractive by keeping carefully within the bounds of legal inference."
Importance of Lotting
"that it is in all cases a question of intention at the time when the partition of the land took place to be gathered, as every other question of fact from the circumstances which can throw light upon what that intention was. One such circumstance which has always been held to be cogent evidence of an intention that the covenant shall be for the common benefit of purchasers is that the several lots have been laid out for sale as building lots."
Lack of Uniformity
"It is one of the badges of an enforceable building scheme, creating a local law to which all owners are subject and of which all owners take the benefit, that they accept a common code of covenants. It is most improbable that a purchaser will have any intention to accept the burden of covenants affecting the land which he acquires being enforceable by other owners of the land in the scheme area unless he himself is to enjoy reciprocal rights over the lands of such other owners: the crucial element of reciprocity would be missing. That does not mean that all lots within the scheme must be subject to identical covenants. For example in a scheme of mixed residential and commercial development, the covenants will obviously vary according to the use intended to be made of each category of lot. But if, as in the present case, the lots are all of a similar nature and all intended for high class development consisting of one dwelling on a substantial plot, a disparity in the covenants imposed is a powerful indication that there was no intention to create reciprocally enforceable rights."
The right to vary
The public nature of the Indentures.
9. Submissions
9.1 Mr Hutchings QC's submissions
Birdlip's case. First they submitted that there was no defined estate; second that Little Orchards did not have the benefit of the scheme and third that it had not been established that the restrictive covenants enured for the benefit of other purchasers as opposed to the vendor.
The estate
Intention to benefit Little Orchards.
Intention for Covenants to Enure
1. the covenants relating to fencing which was to ensure the character at the time of the building of the house
2. the building restrictions. Given that the restrictions were overseen by the vendor the intention was that the restriction was for their benefit.
92. Read together, as they must be, the intention manifested by the stipulations and restrictions is to ensure that the building development carried out by the initial purchaser was subject to the control of the vendor and to build a high class series of property. The objective intention does not go as far as making these restrictions permanent and enuring: neither the control mechanism of the vendor's surveyor nor the restrictions in relation to the building of the house are consistent with this.
93 Similarly, the language of the covenant itself, which defines the land by reference to the Vendors' property, is consistent with an intention to protect the vendor, and the vendor's former estate, during the course of the initial building out.
9.2 Mr Beglan's submissions
1. Each of the factors identified in the Elliston v. Reacher guidance is present in the case of the Moon Covenants.
2. It is clear that the covenants are classically of the kind calculated to, and therefore intended to, provide mutual benefit to those on the estate; and general observance of the restrictions was calculated to enhance the value (not necessarily monetary) of the several lots offered for sale so it is an "easy inference" that the vendor intended the restrictions to be for the benefit of all the lots:
3. To that easy inference must be added the additional factors identified by the Master.
4. Whilst these cases are all fact specific, it is interesting to note the level of congruity between the conditions of sale in this case and those conditions of sale highlighted by the Vice Chancellor in Allen v Veranne Builders at pp.2-3; in which he concluded that the prima-facie case for a building scheme was overwhelming (p.8).
Birdlip's submissions and grounds of appeal.
The Estate
Intention for Little Orchards and for other purchasers to benefit
10. Discussion and Conclusion
Birdlip's claim was suitable for summary judgment under CPR 24. To put it another way could he be satisfied that Mr and Mrs Hunter's claim that there was a building scheme which they were entitled to enforce was fanciful. In my view Master Bowles was plainly right to consider that the matter was arguable. Without going into detail the 1908 plan, the lotting of the plots, the similarity of the covenants and the covenant specifically referring to the mutual benefit of all purchasers are more than enough to make Mr and Mrs Hunter's claim arguable. It is true that there are contrary arguments based amongst other things on the 1914 plan but they do not in my view detract from the arguability of Mr and Mrs Hunter's claim. In my view an appeal against Master Bowles' decision has no realistic prospects of success. Permission to appeal is accordingly refused.
The defined estate
The intention to enure for the benefit of the purchasers
Note 1 This word is doubtful but I agree with Mr Hutchings QC that it is probably other. It may or may not be followed by a comma. [Back]