Harris v Williams-Wynne
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE CHADWICK,THE CHANCELLOR OF THE HIGH COURT,SIR PAUL KENNEDY |
| Judgment Date | 02 February 2006 |
| Neutral Citation | [2006] EWCA Civ 104 |
| Docket Number | A3/2005/0390 |
| Court | Court of Appeal (Civil Division) |
| Date | 02 February 2006 |
[2006] EWCA Civ 104
The Chancellor of The High Court
Lord Justice Chadwick
Sir Paul Kennedy
A3/2005/0390
MR M DIGHT (instructed by Messrs CKFT) appeared on behalf of the Appellant
MR J QUIRKE (instructed by Messrs Evans-Roberts) appeared on behalf of the Defendant
Judgement
(As Approval by the Court)
This is an appeal from an order made on 11 February 2005 by Mr Bernard Livesey QC, sitting as a deputy judge in the High Court in the Chancery Division, in proceedings brought by Mr Nicholas Harris against Mr William Williams-Wynne. The claimant succeeded in his claim in those proceedings; but failed in his defence to the counter claim brought by the defendant under CPR part 20. The appeal is limited to such of the order on 11 February 2005 as gave judgment on the counter claim, with interest, and the consequential orders for costs. Permission to appeal was granted by this court (Arden LJ) on 8 August 2005.
The underlying facts are not now in dispute. The Williams-Wynne family are the owners of land in Gwynedd, known as the Peniarth Estate. In 1987, Mr Williams-Wynne served and conveyed to Mr Harris a farmhouse known as Berthlwyd Farm, Bryncrug, near Tywyn, formerly part of that estate and within the Snowdonia National Park. Mr Harris wanted additional land to enjoy with the property which he had purchased. On 21 April 1988, the parties reached agreement for the sale of agricultural and other land comprising one and a half acres or thereabouts surrounding the farmhouse. The land is shown edged red on the copy of the Ordnance Survey plan, annexed to the 1988 agreement.
The 1988 agreement provided for the purchaser to take immediate possession of the land sold; and for the vendor to execute a transfer of the freehold of that land upon written notice being given by the purchaser within the period of 21 years from the date of the agreement. No notice requiring a transfer was given until early 2003. In the meantime, the land sold remained in the legal ownership of Mr Williams-Wynne.
The agreement of 21st April 1988 contained a covenant by the purchaser, Mr Harris, in these terms:
"3. The Purchaser: …
(b) in view of the land being within a National Park convenants for the benefit of the Vendor's retained land not to erect any buildings on the land the subject of this agreement."
Notwithstanding that covenant, Mr Harris applied in 1991 for planning consent for the erection on the additional land of a two-storey garage and studio. The judge explained that the overall size of the building for which consent was obtained was in excess of 2,000 square feet. That, he said, was the size of a modern four-bedroom house. Full plans approval was eventually granted in December 1995.
The judge described the building works carried out thereafter at paragraph 9 of his judgment [2005] EWHC 151(Ch):
"… the building work was carried out piecemeal in the following stages. The foundations were installed during the late summer of 1997. It was then not until the end of 1999 that further work began which resulted in the building rising from foundation level to first floor level by the Spring of 2000. The roof was not begun until 2002. Between April and June 2002, the rafters were installed and the roof was slated in December 2002."
By early 2002, Mr Harris had decided to sell the farmhouse and the additional land. A purchaser was found who, by October 2002, was ready to exchange contracts. It was then appreciated by those advising Mr Harris that he had no registered title to the additional land. Some approach was made to Mr Williams-Wynne to resolve that difficulty; but that approach seems to have fallen short of a written demand under the 1988 contract—at least until well into 2003.
Mr Harris commenced proceedings for specific performance on 2 April 2003: alleging at paragraph 9 of his particulars of claim that there had been requests "by way of telephone and writing from the claimant's solicitors since December 2002" that the defendant should execute a conveyance. The claim sought, in addition to specific performance, damages for failure to convey.
On 18 March 2003 that is to say shortly before the commencement of these proceedings solicitors instructed by Mr Williams-Wynne wrote to those acting for Mr Harris in these terms:
"We understand that your client maintains that he is not subject to any restrictive covenant in relation to the land at Berthlwyd, Bryncrug, Tywyn, Gwynedd. We have finally located the agreement dated 21 April 1988 and hasten to enclose a copy herewith for your consideration. However, we fail to understand why your client would not have retained a copy of the agreement at the time. Your correspondence suggests that your client denies the existence of any such agreement, when clearly that is not the case. There can be no dispute that your client remains in breach of the agreed covenant.
"Presumably, you shall want to discuss matters further with your client before returning to us. We look forward to hearing from you."
No doubt it was that letter which led to the inclusion in the particulars of claim served on 2 April 2003 of a claim by Mr Harris for declaration that, on the true construction of the 1988 contract and in the events which had happened, the defendant was estopped from asserting that the building which had been erected on the additional land was erected in breach of covenant. The allegations to support the claim to a declaration in those terms are set out in paragraphs 5, 6 and 7 of the particulars of claim:
"5. Thereafter the Claimant obtained planning consent for the development of the Additional Land by the erection of a new two storey dwelling, to adjoin the existing house on the land which had been conveyed pursuant to the Conveyance, and, in due course, erected the said building, work thereon having started in 1995. During the course of the said works to erect the building the Claimant spent the approximate sum of £45,000 thereon and continues to incur additional sums with respect to the fit out of the building.
6. At all material times the Defendant, who lives and works near to the Additional Land and has been a visitor to the Claimant's house, was well aware of:
i. The application for and grant of planning consent;
ii. The commencement, continuation and completion of the said works to erect the building;
iii.The continuation of the said works in fitting out the building.
7. Notwithstanding the Defendant's said knowledge and the terms of the Agreement, the Defendant has stood back and has not raised any objection to the said works."
The defendant's response to the claim was to serve a counter-claim under CPR part 20, seeking damages for breach of the covenant and a declaration that any transfer of the additional land should incorporate a covenant to the same effect. Damages were claimed in such sum as the defendant might reasonably have demanded, as a quid pro quo for relaxing the covenant, had the claimant applied for relaxation.
In the pleaded defence and part 20 counter-claim it was denied that the defendant had known that the claimant was erecting a building on additional land in 1995. It was said that the first time the defendant became aware of a new building was in 2002. It was averred that the defendant had made no representations to the claimant to the effect that he did not intend to enforce his legal rights in relation to any breach of the covenant by way of injunction, damages or otherwise. It was said that the claimant had broken the covenant "flagrantly, wilfully and lawfully and with a view to profit for himself."
On 30 July 2003, the claimant applied for summary judgment under CPR part 24 on the claim for specific performance of the 1988 contract. It seems that the parties agreed terms. A consent order was made on 3 September 2003. The order of 3 September 2003 provided that the transfer to be executed by Mr Williams-Wynne should incorporate the terms of the 1988 contract. That transfer is not in evidence; but it is clear from the transfer by Mr Harris to his purchasers dated 28 November 2003, that the transfer to Mr Harris had incorporated the covenant restrictive building which was given by the purchaser in the 1988 contract. That position was confirmed by Mr Harris's undertaking to his purchasers that "he will fully and effectively indemnify them and their successor's in title, in respect of any costs, loss or damage occasioned as a consequence of any existing breach prior to the date of that transfer of the covenants contained in the transfer dated 22 October 2003 made by [Mr Williams-Wynne] to [Mr Harris]."
The position when the action came on for trial before the Deputy Judge in November 2004 was that the additional land had been conveyed to Mr Harris; and the farmhouse, with the additional land, had been conveyed on by Mr Harris to his purchasers. The remaining issues were damages. First whether (and, if so, in what amount) damages were to be paid by Mr Williams-Wynne in respect of the delay in transferring the additional land to Mr Harris; and second whether (and, if so, in what amount) damages were to be paid by Mr Harris to Mr Williams-Wynne in respect of the breach of the covenant restrictive of building.
The judge gave judgment in favour of the claimant in the amount of £6,145-odd—that being the interest lost to Mr Harris on the footing that the transfer ought...
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