Dano Ltd v Earl Cadogan and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Etherton,The Honourable Mr Justice ETHERTON |
| Judgment Date | 21 February 2003 |
| Neutral Citation | [2003] EWHC 239 (Ch) |
| Court | Chancery Division |
| Date | 21 February 2003 |
| Docket Number | Case No: HC01CO4853 |
[2003] EWHC 239 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Etherton
Case No: HC01CO4853
Mr Michael Barnes Q.C. and Mr Rupert Reed (instructed by Gouldens) for the Claimant
Miss Elizabeth Appleby Q.C. and Mr Toby Davey (instructed by Pemberton Greenish) for the Defendants
Hearing dates : 29 th—31st January 2003
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
In these proceedings the Claimant seeks declarations to the effect that a covenant restricting the use of property at 60 and 62 Chelsea Manor Street, Chelsea, London SW3 ("the Property") to "the housing of the working classes" is not enforceable.
The background facts
By a deed of re-settlement dated 26 July 1889 made between the Fifth Earl Cadogan and his eldest son, Viscount Chelsea, and others, the Cadogan family estates in the county of Middlesex were settled on trusts which, on the coming into force of the Settled Land Act 1925 ("the SLA"), constituted a settlement within that Act. The Property was included in the land comprised in that settlement ("the Settlement").
By the date of commencement of the SLA the Fifth Earl Cadogan had died, and his son, the Sixth Earl Cadogan ("the Sixth Earl"), was the tenant for life under the Settlement for the purposes of that Act. By a vesting deed dated 1 May 1926, made pursuant to s.37 of the SLA, it was declared that the legal estate in fee simple in the land comprised in the Settlement, was vested in the Sixth Earl and that he should stand possessed of the same on the trusts and subject to powers and provisions of the 1889 re-settlement.
By a conveyance dated 27 May 1929 ("the Conveyance") between the Sixth Earl (1) the trustees of the Settlement (2) and the Mayor Aldermen and Councillors of the Metropolitan Borough of Chelsea ("the Council") (3) the Sixth Earl conveyed for £14,000 a substantial plot of land ("the Sale Land") between Wellington Street, Manor Street, and Grove Cottages in Chelsea, including the Property, to the Council. The Sale Land was shown coloured and marked "Plot 3" on a plan attached to the Conveyance. There was also marked on the Conveyance plan, within the south- east corner of the Sale Land, a rectangular area on which was written "Agreed Site for the Beehive B H". That rectangular area is the Property.
The Conveyance stated that the Council was to hold the Sale Land:
"in fee simple freed and discharged from all the uses and trusts of the Settlement but subject to and with the benefit of the existing tenancies interests agreements and conditions set out in the First Schedule hereto …"
The Conveyance contained the following restrictive covenant ("the Restrictive Covenant"):
"… 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…"
Paragraph 5 of the First Schedule to the Conveyance was as follows:
"5. THE property described on the said plan as "Agreed site for the Beehive Beer House" is subject to an Agreement dated 17th day of February 1928 made between the Wolseley Motors (1927) Limited (thereinafter called the Lessors) of the first part Watney Combe Reid & Co. Ltd. (thereinafter called the Tenants) of the second part the Vendor (thereinafter called the Freeholder) of the third part and Sir Samuel Edward Scott and Coutts & Co. (thereinafter called the Trustees) of the fourth part being an Agreement by the Tenants to erect upon the said site a Public House or Beer House to be completed fit for occupation and use on or before the 29th day of September 1929 in accordance with the terms and conditions contained in the said agreement."
Subsequent to the Conveyance, the Beehive Beer House, or Public House, was built on the Property. It eventually became known as "The Rat & Parrot",
Buildings known as the "Manor Street Estate", currently administered by the Peabody Trust, were constructed on the remaining part of the Sale Land.
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 in possession.
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.
By deeds of discharge dated 17 March 1961 and 23 March 1961, pursuant to the SLA s.17, 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.
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.
The Seventh Earl Cadogan died on 4 July 1997.
The Property ceased to be used as a public house in 1999. In July 2000 the Council, now the Royal Borough of Kensington and Chelsea, sold the Property to the Claimant.
In November 2000 the Claimant obtained planning consent, subject to various conditions, for the development of the Property by the demolition of the public house and the construction of four private houses.
The proceedings
The present proceedings were commenced by a claim form issued on 13 November 2001. The Defendants are the Eighth Earl Cadogan and three of the Cadogan Estate companies. Those Defendants claim to be the legal or beneficial owners of land entitled to the benefit of the Restrictive Covenant.
In its Particulars of Claim the Claimant claims (1) a declaration that the Restrictive Covenant is, as regards the Property, unenforceable and without effect; (2) further alternatively, a declaration that the words "working classes" in the Restrictive Covenant are not now capable of any meaningful definition and that, in so far as the Restrictive Covenant restricts the use of the Property for housing of the "working classes", then such restriction is no longer capable of being defined and enforced; (3) further alternatively, a declaration that there is no adjoining or neighbouring property forming a part of the Cadogan Settled Estate, within the Restrictive Covenant, and therefore no such adjoining or neighbouring property which the Restrictive Covenant is capable of benefiting; (4) damages and interest.
The Claimant is no longer pursuing its claim for damages.
A Defence and Counterclaim have been served by the Defendants. The Defendants counterclaim for a series of declarations as to the continuing enforceability of the Restrictive Covenant in relation to the Property, and as to the meaning of the Restrictive Covenant, and as to the Defendants' ability to enforce the Covenant for the benefit of the land of which the Defendants are the legal or equitable owners.
Representation
The Claimant was represented before me by Mr Michael Barnes Q.C. and Mr Rupert Reed. The Defendants were represented by Miss Elizabeth Appleby Q.C. and Mr Toby Davey.
The issues
In the Claimant's skeleton argument, and Mr Barnes' oral submissions, the following four issues were identified as central to the case. Firstly, the Claimant claims that, after March 1961 there ceased to be any "Cadogan Settled Estate in Chelsea", within the meaning of the Restrictive Covenant, and so there is no longer land which continues to have the benefit of the Restrictive Covenant. Secondly, the Claimant claims that, on the proper interpretation of the Conveyance, the land subject to the Restrictive Covenant never included the Property, on which the Beehive Beer House was to be constructed. Thirdly, the Claimant claims that the Restrictive Covenant does not, in fact, confer any benefit on any land of which the Defendants are the legal or beneficial owners. Fourthly, the Claimant claims that the meaning of the words "working classes" is so uncertain that the Court will not enforce the Restrictive Covenant by way of injunction, an equitable discretionary remedy.
Miss Appleby did not disagree with that fourfold classification of the issues in the case.
The first issue: "the Cadogan Settled Estate in Chelsea"
Mr Barnes' submissions in...
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