Karen Reeve v Aidan Gregory McDonagh

Hearing date: 14 February 2024

Approved Judgment

This judgment was handed down remotely at 10.00 am on 1 March 2024, by circulation to the parties or their representatives by e-mail and by release to the National Archives.

This is the hearing of an appeal from orders made by Deputy Master Bowles (“ the Master”) following the trial of a Part 8 Claim, commenced by the Respondents to this appeal, seeking relief under section 84(2) of the Law of Property Act 1925 (“ the LPA”). On 28 April 2023, the Master declared upon the true construction of a covenant (“ the 1958 Covenant”) contained in a transfer dated 24 January 1958 (“ the 1958 Transfer”), determining that it does not prevent the Respondents from replacing their existing house pursuant to the grant of planning permission. On 17 July 2023 he ordered that the Appellant should pay the Respondents' costs of the proceedings.

The Background

The Master dealt with the background facts, which are not contentious, although they are somewhat convoluted, in paragraphs [1]–[9] of his judgment. They are as follows:

In the 1920s, a housing estate (comprising vacant plots) was laid out in Poole. A big house called Barnwood together with a small lodge (known as “The Lodge”) was built on one plot at the junction of Brudenell Avenue and Brudenell Road some time before World War II. The Lodge was situated close to the eastern boundary of the plot to the south of Barnwood. From the available plans, Barnwood appears to have had a terrace or veranda from which its residents could enjoy sea views downhill to Poole Harbour, Brudenell Road being only one road back from the shore-line.

By the 1958 Transfer, Mr Gordon Saul (then the freeholder of Barnwood) retained for himself The Lodge and the southern section of the plot, while he sold Barnwood and the northern section of the plot to Mr Herbert Donaldson, thereby dividing the plot in two. The Lodge itself formed only a relatively small part of the land retained by Mr Saul. There is no available copy of the 1958 Transfer but Entry 4 to the Charges Register of the Respondent's registered freehold title records that Mr Saul (as transferor) entered into the following covenant with Mr Donaldson (as transferee):

“…the Transferor for himself and his successors in title to benefit [Barnwood] and to bind [the Lodge] hereby covenants with the Transferee that no additional buildings whatsoever shall at any time be erected on [the Lodge]” ( emphasis added).

It is common ground before me, and it was accepted by the Master in [23] of his judgment, that at least part of the purpose of the 1958 Covenant was to protect the sea views available in 1958 from Barnwood.

At some time between 1958 and 1988, The Lodge was renamed Rose Cottage which explains why the Master's judgment sometimes refers to “The Lodge/Rose Cottage”. For the purposes of this judgment I shall refer to it hereafter as Rose Cottage.

On 6 June 1988, the then freeholders of Barnwood (Mr and Mrs Roger Grigg) and Rose Cottage (Mr Thompson and Ms Henty) entered into two transfers (“ the 1988 Transfers”), whose material effect was as follows. Dividing the Rose Cottage plot north/south, Mr Thomson and Ms Henty transferred to Mr and Mrs Grigg the western section of the Rose Cottage plot, leaving for themselves a relatively narrow strip of land, on which Rose Cottage was situated, running along the entire eastern boundary of the plot. The transferred section was itself divided east/west into two further plots with the plot adjoining the existing Barnwood site coloured blue on the relevant plan (“ the Blue Land”) (the expectation being that it would be incorporated into Barnwood's garden) and the southern most plot coloured pink (“ the Pink Land”) (with the expectation that a new house would be constructed there). The Pink Land and the Blue Land are marked clearly on a plan annexed to a Trust Deed entered into by the parties on the same date.

It is common ground that under the doctrine of unity of seisin, the 1958 Covenant was extinguished by the 1988 Transfers as it affected the Blue and Pink Land, but remained in force as it affected Rose Cottage and the retained garden land immediately surrounding Rose Cottage.

By a Deed intended as “supplemental” to the 1988 Transfers and entered into on the same day (“ the 1988 Deed”), which the Master described as part of “the overall arrangements” between the two sets of freeholders, Mr and Mrs Grigg granted to Mr Thompson and Ms Henty at clause 3:

“…the right to erect a rear extension at the side of [Rose Cottage] to form a garage and at first floor to form a dining room and kitchen and to convert the existing garage at the said property to a bedroom in accordance with the plan annexed to a grant of planning permission in respect thereof dated the 23 ^rd day of December [1985] together with a pitched roof on the said extension and the [1958 Covenant] relating to the erection of additional buildings on the [Rose Cottage land] shall be deemed to be modified pursuant to the terms of this clause…”

The Deed went on to provide at clause 4 that:

“Save as modified by clause 3 hereof it is hereby agreed and declared that [the 1958 Covenant] contained in [the 1958 Transfer] shall remain in full force and effect”.

At paragraph [7] of his judgment, the Master explained that:

“While it is common ground between the parties, that the apparent construction placed upon the 1958 covenant, by the parties to the 1988 deed, namely that, unless and to the extent modified by the 1988 deed, it prohibited any extension, or addition, to the original Rose Cottage building, cannot, in itself, afford any guidance to the proper construction of the 1958 covenant, it is contended, on behalf of Ms Reeve and as explained later in this judgment, that the construction of the covenant, as understood and as acted upon by the parties to the 1988 deed, estops the parties, as privies and successors to the parties to the 1988 deed and, in particular, estops Mr and Mrs McDonagh, from asserting a construction of the 1958 covenant which is inconsistent with the construction of that covenant adopted and applied by the parties in 1988.

The Pink Land (now known as 1a Brudenell Road) was sold by Mr and Mrs Grigg to a developer in 1990 and a new house was erected on the site. The transfer to the developers, Duncan Estates Ltd, contained restrictive covenants referred to by the Master in his judgment at [8]. Nothing is said to turn on them. I note, however that, in so far as they seek to protect sea views from Barnwood, the Master observed that they replicated earlier covenants, for the protection of sea views (including covenants restricting the height of any house or building on the land), contained in earlier conveyances in 1924 and 1926 involving the sale of land, of which Barnwood and The Lodge formed only part. These earlier conveyances are not available at this remove of time, but it is common ground between the parties that although the covenants from these conveyances would have been recorded on the face of the Property Register for Barnwood and Rose Cottage at the time of the 1958 Transfer (and remain on the Property Register now) and so would have been within the knowledge of the parties to that transfer, they would likely have lapsed by that time and/or it would have been impossible to identify with any certainty the identity of the beneficiary of those covenants and/or they were likely not enforceable.

In about 2009 or 2010, the freeholder of Barnwood demolished the existing house and replaced it with two new houses, now known as 4 Brudenell Avenue (on the west side of the plot) and 4a Brudenell Avenue (on the east side of the plot immediately to the north of Rose Cottage). Each of these properties has the benefit of the 1958 Covenant.

Rose Cottage (whose address is 1 Brudenell Road) was transferred to the Respondents on 18 July 2018 and is subject to the 1958 Covenant which is registered as Entry 4 in the Charges Register. The Appellant purchased 4a Brudenell Avenue in June 2021. The benefit of the 1958 Covenant is registered as Entry 2 in the Property Register.

On 26 October 2021, the Respondents obtained planning permission reference APP/21/01090/F (“ the Planning Permission”) to demolish Rose Cottage and to erect a bigger house (“ the Proposed Development”). The Proposed Development, at just over 417m ², is very substantially bigger than Rose Cottage, at 147m ², and will occupy almost the whole of the Rose Cottage plot. I understand that as at the date of this appeal, Rose Cottage has been demolished and foundations laid for the Proposed Development.

The Appeal

With the permission of this court, the Grounds of Appeal are threefold:

i) that the Master was wrong to determine that the 1958 Covenant does not prevent the Respondents from carrying out the development authorised by the Planning Permission and that he should have found that, on a true construction of the 1958 Covenant, the carrying out of the Proposed Development would be a breach of the 1958 Covenant.

ii) in the alternative, that the Master was wrong to hold that no estoppel arose from the execution by the parties' respective...