Elwood v Goodman
| Jurisdiction | England & Wales |
| Judge | Lord Justice Patten,Lord Justice Beatson,Lady Justice Arden |
| Judgment Date | 04 September 2013 |
| Neutral Citation | [2013] EWCA Civ 1103 |
| Docket Number | Case No: A3/2013/0641 |
| Date | 04 September 2013 |
| Court | Court of Appeal (Civil Division) |
[2013] EWCA Civ 1103
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
His Honour Judge Simon Barker QC
1BM30296, 1BM30298, 1BM30299
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Arden
Lord Justice Patten
and
Lord Justice Beatson
Case No: A3/2013/0641
Graham Machin (instructed by Elvin & Co Solicitors) for the Appellants
Martin Hutchings QC (instructed by DLA Piper LLP) for the Respondent
Hearing dates: 18 th and 19 th July 2013
Approved Judgment
Introduction
This is an appeal by various defendants in some consolidated proceedings which were tried by HH Judge Simon Barker QC (sitting as a judge of the High Court) in September 2012. He determined a series of preliminary issues which related to the defendants' liability to contribute to the cost of maintaining a road on the Colwick Industrial Estate ("the Estate") near Nottingham which provides access to the defendants' premises. Each of the defendants is the freehold owner of a light industrial unit adjacent to the road in question. The road is referred to in the documents of title as Roadway 4 and, for convenience, I will adopt the same terminology in this judgment.
Each of the defendants has been sued by the respondent, Mr Elwood, for arrears of the contributions to maintenance which he alleges they are liable to pay. At one point the defendants' resistance to the claim was limited to a challenge to the method and basis of assessment. At trial, however, they took the position that they have no liability to pay at all either under the terms of the transfers under which they acquired title to the various units or more generally under the equitable principle of benefit and burden illustrated by the decision of Upjohn J in Halsall v Brizell [1957] Ch 169. This is of particular relevance to M & R Property Holdings Limited ("M&R") which is a successor in title to the original purchaser of its unit from a common owner. Both Mr Goodman and Mr Stephens are original purchasers and original covenantors.
As a result of case management directions given earlier, the claim against Mr Goodman was identified as the lead action which the judge tried for the purpose of deciding the various preliminary issues. His decision on those issues is, as a result, binding on the defendants in the other actions and Mr Goodman, Mr Stephens and M&R now seek to challenge the judge's findings on liability. Mr Golar, who is the owner of Unit E, has not appealed the judge's decision.
The judge was concerned with a long series of preliminary issues relating to both liability and the calculation of the maintenance charge. But this appeal is concerned with only three of those issues: the liability of the original purchasers under the covenants in the transfers; their liability in equity under the benefit and burden principle; and whether the maintenance contribution liability extends to an extra 1m wide strip of the carriageway and some lights which were additions to Roadway 4 which post-date the defendants' acquisition of their units.
Conveyancing history
Before I come to those issues I need to set out the relevant documents of title which are said to give rise to the liabilities in issue.
Prior to 1986 the Estate was in the ownership of Dobson Park Properties Limited and a related company which I will refer to collectively and individually as Dobson. The Estate extended to several hundred acres on the north bank of the River Trent. Some of this land was undeveloped but by then the developed part of the Estate included a row of light industrial units ("the Units") each adjoining Roadway 4 which were held by the defendants and others on long commercial leases which included a charge for the use of the Estate roads.
In about June 1985 Dobson indicated that it was interested in disposing of parts of the freehold and the tenants of the Units formed a consortium to negotiate the purchase of the freehold of the properties they occupied as lessees. At this time and up to the subsequent acquisition of those freeholds, Roadway 4 was a concrete slab road some 6m wide. On the opposite side from the Units there was a grass verge also about 6m wide which was used by articulated lorries as swing space to enable them to turn into the Units and also as parking for employees.
By June 1986 terms had been agreed in principle for the purchase of the freehold of the Units but at the same time there were ongoing negotiations between Dobson and Mr Elwood for the purchase by him of a substantial area of land on the Estate including the undeveloped land (a former gravel pit) on the side of Roadway 4 opposite the Units. Mr Elwood wanted to acquire the roadways on the Estate as part of his purchase and the judge found that in July 1986 the consortium's property agent advised the defendants that Mr Elwood was insistent on purchasing Roadway 4 but would grant the defendants rights of way over the roadway and maintain it subject to the defendants contributing to the cost of maintaining the section of Roadway 4 in front of the Units but not any unilateral improvements. He was also prepared to grant them a licence to use the grass verge terminable on 6 months' notice.
Mr Elwood completed his purchase of what amounted to a large portion of the Estate on 29 th September 1986. Included in the transfer from Dobson was Roadway 4 and the other estate roads plus the entirety of the undeveloped land on the opposite side of Roadway 4 including the grass verge. Dobson reserved for itself and its successors in title and their tenants and licensees the right:
"to use for all reasonable purposes for the benefit of the Transferors' Estate Premises the said roadways numbered 2 3 and 4 on the Estate…..".
In clause 5 Mr Elwood covenanted with Dobson and its successors in title that he and his successors in title would maintain Roadway 4 and the other estate roads:
"…to not less than the existing standards of construction including street lighting as now subsisting and also the sewers and drains serving those parts of the Estate as are hereby transferred….and as comprise also those parts of the Transferors retained premises (hereinafter called "the Transferors' Estate Premises") as are shown hatched green on Plans B — H in a proper state of repair and condition so as to serve the Estate as an Industrial Estate unless and until the same shall be adopted by the Statutory Authorities as maintainable at the public expense."
The Units were included in the retained premises shown hatched green on the plan.
In return Dobson, in clause 7(b), covenanted with Mr Elwood that:
"…they and their successors in title owners for the time being of …(ii) those parts of the Transferor's Estate premises as lie to the north- east of Roadway 4 and are shown hatched green on Plans G and H (hereinafter called "the Transferor's Roadway 4 premises") will pay to the Transferee or as the Transferee shall direct such sums as shall from time to time be likewise certified by the Transferee's Surveyor as being fair and reasonable proportions of the expenses incurred by the Transferee and his successors in the maintenance respectively of ….. the portion of Roadway 4 upon which the Transferors Roadway 4 premises abut by reference to user thereof by the First Transferee and their successors in title and by the owners and occupiers of other land and premises for the time being served thereby."
The negotiations with the consortium continued and on 8 th December 1986 their solicitor informed them that the "new owner" intended to restrict their use of the verge. On 10 th December 1986 Mr Goodman completed his purchase of Unit F by taking a transfer of the freehold from Dobson. There was no evidence before the judge as to precisely what documents of title (if any) Mr Goodman's solicitors received in addition to their search of Dobson's registered title and it was in issue whether Mr Goodman and the other purchasers of the units were by then aware that the sale from Dobson to Mr Elwood had been completed. But the judge found that, as a result of the negotiations with Dobson to which I have referred, they had no reason to suppose that anyone apart from Mr Elwood was to become Dobson's successor in title in respect of Roadway 4 and the grass verge:
"30. It may have been that, at the time and for the purpose of considering their obligations under the December Transfer, Mr Goodman and the other Consortium members did not give particular thought to the precise sequence of the transfers by Dobson to Mr Elwood and to themselves. However, I do not accept that the Consortium, including Mr Goodman, consciously proceeded on the basis that Dobson retained R4 at the time of the December Transfer or that the Consortium then regarded anyone other than Mr Elwood as the successor in title to Dobson and owner of R4 and the Verge."
He also found that the consortium had no reason to think other than that the sale to Mr Elwood had completed. He therefore concluded:
"37. Having regard to all the evidence, I find that at all material times (that is on and from 3 November 1986 at the latest) the Consortium (including Mr Goodman) in fact proceeded on the basis that (1) Mr Elwood had already acquired title to R4 from Dobson; and, (2) Mr Elwood had, in consequence, assumed Dobson's responsibilities and rights in relation thereto".
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