Dano Ltd v Earl Cadogan and Others
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SCHIEMANN,LORD JUSTICE CARNWATH,SIR CHRISTOPHER STAUGHTON |
| Judgment Date | 19 May 2003 |
| Neutral Citation | [2003] EWCA Civ 782 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 May 2003 |
| Docket Number | A3/2003/0477 |
[2003] EWCA Civ 782
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
(MR JUSTICE ETHERTON)
Royal Courts of Justice
Strand
London, WC2
Lord Justice Schiemann
Lord Justice Carnwath
Sir Christopher Staughton
A3/2003/0477
MISS E APPLEBY QC AND MR T DAVEY (instructed by Pemberton Greenish, London SW1X 0BX) appeared Appellants
MR M BARNES QC AND MR R REED (instructed by Jones Day Goulders, London EC4M 7NG) appeared Respondents
(Approved by the Court)
Monday, 19 May 2003
Lord Justice Carnwath will deliver the first judgment.
The short point raised by this appeal is the meaning, in a restrictive covenant imposed in 1929, of the term "the Cadogan Settled Estate in Chelsea". The judge decided the issue in favour of the respondents ("Dano"), with the result that the covenant was in effect unenforceable. Three other grounds for challenging the covenant were decided in favour of the appellants ("Cadogan"), and are no longer in issue.
The facts
The property in question ("the Site") is 60 and 62 Chelsea Manor Street, London SW3, a rectangular piece of land on the west side of Chelsea Manor Street. In 1929 it was part of a large area of land owned by the Cadogan family, comprised in a settlement of 1889. Under the Settled Land Act 1925 the fee simple was vested in the tenant for life, who had a statutory power to sell the land subject to the terms of the Act.
In 1929 the Sixth Earl, acting under those powers, sold to the Metropolitan Borough of Chelsea an area of land to the west of Chelsea Manor Street ("the Sale Land") including the Site. The conveyance contained the following restrictive covenant, the interpretation of which is in dispute.
"… AND the Purchasers to the intent and so as to bind so far as practicable the property hereby assured into whosoever hands the same may come and to benefit and protect the property adjoining or neighbouring to the property hereby assured for themselves and their assigns hereby covenant with the Vendor and his successors in title as Owners of the property adjoining or neighbouring to the property hereby assured so long as such adjoining or neighbouring property or any part thereof forms part of the Cadogan Settled Estate in Chelsea but not further or otherwise that the property hereby assured shall not nor shall any buildings thereon erected be used for any purpose whatsoever except for the housing of the working classes …" (emphasis added)
The greater part of the Sale Land was let in 1930 by the council to the Peabody Donation Fund for a term of 999 years with a clause requiring use of the flats for the working classes (since amended to "affordable housing"). Flats have been erected on the land so let and are occupied under assured tenancies. The Site was not part of that lease. As envisaged by the conveyance, it was used for erection of a public house which remained until 1999, being known in more recent times as "the Rat and Parrot". In 2000 the Site was sold to the Council to Dano, who have planning permission to build four private houses. They wish to do so free of the restriction to use "for the working classes."
The 1889 settlement remained in force until 1961, when the legal structure of the estate was reorganised, no doubt for sound management or fiscal reasons. At that time the Seventh Earl held the life interest and his son, Viscount Chelsea, the fee simple in remainder. The precise details of the new arrangements are not material and it is sufficient to adopt the judge's summary:
"10. By a deed of exchange dated 16 March 1961 ("the Deed of Exchange") Viscount Chelsea assigned to the Seventh Earl Cadogan his interest in remainder in certain of the properties comprised in the Settlement; and the Seventh Earl Cadogan assigned his life interest in the remaining properties in the Settlement to Viscount Chelsea. The effect was that the properties comprised in the Settlement were divided between the Seventh Earl Cadogan and Viscount Chelsea in fee simple absolute possession.
11. By deed dated 17 March 1961 the Seventh Earl Cadogan conveyed to Viscount Chelsea the various properties to which he had become absolutely and beneficially entitled pursuant to the Deed of Exchange.
12. By deeds of discharge dated 17 March 1961 and 23 March 1961, pursuant to the SLA s17, the trustees of the Settlement declared themselves discharged from their duties in respect of the properties which were the subject of the Deed of Exchange.
13. By a series of deeds and agreements made on and after 23 June 1961, the equitable interest in the lands formerly comprised within the Settlement, and which were the subject of the Deed of Exchange and thE deed of conveyance of 17 March 1961, was vested in various private companies. These companies are ultimately owned and controlled by the trustees of a deed of settlement of 6 December 1961, under which the trustees stand possessed of the trust assets for the benefit of beneficiaries who are either descendants of the Seventh Earl Cadogan or are married to such descendants."
It is accepted that as a result of those arrangements the Site ceased to be settled land.
The present proceedings were begun in November 1991. The defendants were the Eighth Earl Cadogan, and three of the...
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