29.1 If a claimant shows: (a) that his property enjoys the benefit of an enforceable restrictive covenant; (b) whose burden attaches to the defendant’s property; and (c) that the covenant has been broken, then he has a claim for a mandatory injunction and/or damages. If there has been a breach, or the likelihood of breach, perhaps even if development has already taken place, then it is open to a defendant to apply to the court (i.e. when enforcement proceedings have already begun) to apply to the court for an order giving leave to apply to the UTLC for an order discharging or modifying the relevant covenants, and staying the enforcement proceedings in the meantime.1
29.2 The High Court and county courts have power to grant an injunction and to award damages either in addition to or instead of an injunction.3Where a court refuses to grant an injunction the issue is how the covenantee’s loss is to be assessed. In Shelfer v City of London Electric Lighting Co,4AL Smith LJ gave guidance on the circumstances in which damages may properly be awarded in lieu of an injunction. The starting point is that a wrongdoer is not entitled to ask the court to sanction his wrong by purchasing his neighbour’s rights. However, damages may be awarded in substitution for an injunction where a case for an injunction has been made out: (a) if the claimant has by his conduct or delay disentitled himself to an injunction; or (b) where damages are appropriate remedy, as will apply in any case where: (i) the injury to the claimant’s rights is small; and
(ii) is capable of being estimated in money; and (iii) is one which can be adequately compensated by a small monetary payment; and (iv) where an injunction would be oppressive. On the other hand, even when these four criteria exist there may still be cases where an injunction would be appropriate as, for instance, where a defendant acted in flagrant disregard of the claimant’s rights by completing building work quickly in the hope that he will avoid an injunction.
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Clearly, every case will turn on its own particular facts. In Leeds Industrial Cooperative Society Ltd v Slack,5it was said by Viscount Finlay that if damages are given in addition to an injunction they will compensate for past injury and the injunction will prevent its continuance, but if they are given in substitution for an injunction they will cover not only past loss but also injury that would have been inflicted in the future which an injunction would have prevented.
29.3 In Wrotham Park Estate Co Ltd v Parkside Homes Ltd,6a developer built a number of houses in breach of a covenant restraining him from building save in accordance with a layout plan submitted and approved by the plaintiffs. An injunction was claimed shortly after the building work began, but the plaintiff did not seek an interlocutory injunction, and all the houses were completed and occupied by the date of trial when the plaintiffs sought a mandatory injunction requiring demolition of the houses built in breach of covenant. Brightman J refused to grant such relief and instead awarded damages (and the plaintiffs had suffered no financial loss arising from the breach of the layout stipulation) of an amount which he concluded might reasonably have been demanded by the plaintiffs from the developer as a quid pro quo for relaxing the covenant (i.e. the fair and proper price payable for the negotiated release of the covenant), which he assessed at 5% of the developer’s anticipated profit (which was reckoned to be £50,000 – in fact, the damages of £2,500 were apportioned between the developers and the owners of the 14 houses built on the affected land, although it is assumed that the homeowners would have been indemnified for their loss by the developers).
29.4 In Marine & General Mutual Life Assurance Society v St James Real Estate Co,7in awarding damages for obstructing the plaintiff’s ancient lights, the court took into account a settlement in a neighbouring transaction (where the landowner withdrew his objection to the defendant’s development) which was said to be consistent with the Wrotham Park measure.
29.5 In Attorney General v Blake,8Lord Nicholls said that the Wrotham Park case was an example of where the court decided not to grant an injunction on the ground that it would be oppressive. He said that ‘For social and economic reasons the court refused to make a mandatory order for the demolition of the houses built on land with a restrictive covenant’. He said that Brightman J was right to apply ‘by analogy cases concerning the assessment of damages when a defendant has invaded another’s property rights but without diminishing the value of the property’.
29.6 The Wrotham Park approach to the assessment of loss was followed in Bracewell v Appleby.9However, in Brewhouse Developments Ltd v Berkley
5[1924] AC 851.
6[1974] 1 WLR 798.
7[1991] 2 EGLR 178 (Mayor’s and City of London Court).
8[2001] 1 AC 268 at 282–283.
9[1975] Ch 408 (as the price payable for the acquisition of a right of way to a new house – this was a case where the defendant’s right of way ‘of the fullest description’ did not entitle him to extend
House (Docklands Developments) Ltd,10Scott J held that in the absence of special circumstances, the plaintiffs were entitled to an injunction in a case involving trespass to the plaintiffs’ airspace. As there were no special circumstances in that case, he held that the plaintiffs were entitled ‘as of course’ to injunctions restraining the continuing trespass. In Surrey County Council v Brodero Homes Ltd,11a developer built 77 houses on a site on which it had covenanted to build only 72 houses. Only common law damages were sought in Brodero as opposed to damages in equity in lieu of an injunction under the now-repealed but still retained jurisdiction arising under the Chancery Amendment Act 1858 (Lord Cairns’ Act)12which were found to be nominal. The Court of Appeal distinguished Wrotham Park on the basis that it was a case falling under Lord Cairns’ Act in which the object of the damages was not to compensate the plaintiffs for financial loss but to deprive the defendants of an unjustly acquired gain.
29.7 In Jaggard v Sawyer,13Sir Thomas Bingham MR did not accept that the award of damages in Wrotham Park was not based on compensatory principles seeing as the damages payable to compensate the plaintiff were for the continuing breach and were clearly linked to the obvious relationship between the profits earned by the defendants and the sum which they might reasonably have been willing to pay to secure release from the covenant. He could see no reason why damages should not be assessed on the Wrotham Park basis in cases where the court declined to grant an injunction to restrain further or repeated breaches of the right in question (in effect, a once and for all award of damages in respect of continuing or repeated breaches of covenant and future loss). In Jaggard v Sawyer, the Court of Appeal confirmed the award of only modest damages arising from the defendant’s breach of covenant and trespass in building a house on land within a small cul-de-sac which could not be undeveloped. Proceedings were begun when the building was at an advanced stage. Thereafter, the house was completed and occupied. The Court of Appeal held that a mandatory injunction was not warranted because: (a) the additional use of the cul-de-sac would cause only a minimal increase in the flow of traffic and roadway maintenance (it was a private road); (b) the new dwelling did not impair the visual amenity of the plaintiff’s house or affect its value; (c) the injury was small and capable of being estimated in money and, indeed, would be adequately compensated by a small money payment; (d) the plaintiff failed to seek an interim injunction at an early stage; and (e) that because of section 84 of the Law of Property Act 1925, restrictive covenants cannot be regarded as being ‘absolute and inviolable for all
the right of way to premises which he had erected adjacent to the dominant tenement – the plaintiff had also delayed bringing proceedings until the defendant had almost completed the new house).
10(1987) 38 BLR 87.
11[1993] 1 WLR 1361.
12See now Senior Courts Act 1981, s 50.
13[1995] 1 WLR 269 at 281–282.
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time’,14the grant of an injunction would be oppressive.15The court considered that the judge had been right to award the plaintiff damages in lieu which had been assessed in the sum of £694.44 which was her one-ninth share of £6,250 which he considered to be the price which the defendants might reasonably have been required to pay the residents of the cul-de-sac for a release from the covenant and for a right of way to the new building built in breach of covenant.
29.8 Gafford v Graham16was a case where, in 1989, the defendant built an indoor riding school on his land and, some 3 years earlier, had converted a bungalow into a two-storey building and also extended a barn, all such works being in breach of a building restriction. He also used the land in breach of a user restriction which required his land to be used only as a livery yard with stabling for horses along with a single residential bungalow. The plaintiff had, in 1989, complained at an early stage that the building works in relation to the...
