Nicholas San Juan and Others v John David Allen and Another
| Jurisdiction | England & Wales |
| Judge | Master Clark |
| Judgment Date | 22 June 2016 |
| Neutral Citation | [2016] EWHC 1502 (Ch) |
| Date | 22 June 2016 |
| Court | Chancery Division |
| Docket Number | Case No: HC-2016-000862 |
[2016] EWHC 1502 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Master Clark
Case No: HC-2016-000862
James McCreath (instructed by IBB Solicitors) for the Claimants
Daniel Bromilow (instructed by Cubism Law) for the Defendants
Hearing date: 3 May 2016
The applications
These are two applications:
(1) the claimants' application dated 8 April 2016 seeking summary judgment on the part of their claim for a declaration; and
(2) the defendants' application dated 14 April 2016 seeking that " pursuant to CPR 11 the court should decline to exercise its jurisdiction as the claim is premature" or, in the alternative, that the claim is stayed to allow the defendants to prepare their intended application to the Upper Tribunal (Lands Chamber) ("the Tribunal") under section 84 of the Law of Property Act 1925.
The claim and background to the applications
The claim concerns a residential development of 36 plots in a cul de sac known as Copperfields in Beaconsfield, Buckinghamshire ("Copperfields"). The first and second claimants own plot 12; the third and fourth claimants own plot 14; and the defendants own plot 13.
The claimants allege that the development is subject to a "building scheme" pursuant to which each plot owner is entitled to enforce the covenants contained in the common form transfer used by the developer in the first transfer of each of the plots. Those covenants include a restriction ("restriction 2") in the following terms:
"Not to use the property hereby transferred or permit the same to be used for any other purpose than a private dwelling house with garage for the use and occupation of one family only and not to divide the same into flats nor to construct or allow access thereto from any neighbouring land."
The claim arises out of the fact that on 31 July 2015, the defendants obtained planning permission to demolish the existing single house on plot 13, and build in its place 4 new dwelling houses ("the development").
The relief sought in the particulars of claim is a declaration that the common transfer created a building scheme by which the defendants (as the present owners of plot 13) are bound; and an injunction to restrain the defendants from implementing the planning permission or otherwise breaching restriction 2.
On 3 November 2015, the claimants' solicitors wrote a letter of claim to the defendants setting out their objections to the development and asserting that it would be in breach of restriction 2. They sought the following undertakings:
(1) not to carry out the development; or
(2) by 1 December 2015 to issue and thereafter diligently pursue an application in the Tribunal under section 84(1) of the Law of Property Act 1925, and pending the determination of the application, not to start the development.
The defendants' solicitors responded to this letter on 17 November 2015. Their letter did not deny the existence of the building scheme or the enforceability of restriction 2, but did not accept them. It stated:
"My clients are well aware that prior to any building works commencing there are restrictive covenant issues which need to be given full consideration. There is no question of our clients simply commencing building works without considering these issues fully."
and continued
"… your clients can be reassured that our clients have no intention of commencing building works without first resolving the restrictive covenant issues. They have confirmed no building works will be commenced by them without first putting your clients on notice of this"
The letter concluded:
"we envisage that we will be in a position to update your clients on our clients' position regarding the restrictive covenant issues and what steps they believe they may or may not have to take, for example, an application to the Upper Tribunal (Lands Chamber) shortly."
No update was provided and the claimants' solicitors wrote on 3 December 2015, stating that if neither of the undertakings sought was provided, the claimants would start proceedings. The defendants' solicitor responded on 8 December 2015 saying it was her intention to revert back in the near future to confirm the defendants' position. She did not however do so, and there was no further correspondence between the parties until 15 March 2016, when the claimants' solicitors wrote serving the claim form issued the previous day, 14 March 2016.
In correspondence following service of the proceedings, the claimants' solicitors repeatedly asked the defendants' solicitors whether they accepted that plot 13 was subject to a building scheme. Their response on 1 April 2016 was:
"the law requires your clients to wait and see what is to be said in Upper Tribunal application or, in this instance, the pre-application letter prior to Upper Tribunal proceedings which we are instructed to prepare."
On 7 April 2106, the defendants' solicitor wrote:
"The question of a building scheme is being considered in our drafting of the Defence which is due in only 7 days from now."
Since the claimants' application was issued on 8 April 2016, the defendants were not required to file their Defence. However, at the hearing before me they took no position as to whether plot 13 was subject to a building scheme or as to whether the development would be in breach of restriction 2.
The test for summary judgment
The principles to be applied on applications for summary judgment are well established. They were summarised by Lewison J, as he then was, in Easyair Ltd v Opal Telecom Limited [2009] EWHC 339 (Ch), in a formulation approved in a number of subsequent cases at appellate level, including AC Ward & Sons v Catlin (Five) Limited [2009] EWCA Civ 1098 and Mellor v Partridge [2013] EWCA Civ 477. It is unnecessary to set them out here.
Issues in the claimants' application
The defendants' counsel did not seek to oppose the summary judgment application on any basis other than that the claim was premature and unnecessary, relying particularly on the assurances given by the defendants set out above.
There were therefore effectively two issues in the claimants' application:
(1) The test to be applied in determining whether a declaration should be granted;
(2) Whether that test had been satisfied.
Legal Principles
Section 84(2) of the Law of Property Act 1925 provides:
"The court shall have power on the application of any person interested—
(a) To declare whether or not in any particular case any freehold land is or would in any given event be affected by a restriction imposed by any instrument; or
(b) To declare what, upon the true construction of any instrument purporting to impose a restriction, is the nature and extent of the restriction thereby imposed and whether the same is or would in any given event be enforceable and if so by whom."
It was therefore common ground between the parties that the court has jurisdiction to make the order sought by the claimants.
The test for granting a declaration
The defendants' counsel referred me to Zamir & Woolf, The Declaratory Judgment, 4 th edn, at para 4–74 as authority for the proposition that a declaration will not be granted in relation to hypothetical facts i.e. facts which have not yet occurred and may never occur at all.
He relied on the decision in Faber v Gosforth UDC 19 TLR 435, in which developers intended to build a development of houses and, in the process of doing so, proposed to connect the drainage system into the municipal drains. The developers sought a declaration that they were entitled to do so, which was dismissed. The defendants' counsel submitted that the basis of the decision was that the works had not started.
That was, however, only one ground for the decision. I agree with the authors of The Declaratory Judgment that that ground cannot be supported. The facts were conditional rather than hypothetical – if the developers had obtained the declaration they sought they were virtually certain to proceed with the development. There are however other grounds on which the decision can be supported. Firstly, it can be supported on the basis that what was in issue was not the claimants' right to connect to the sewers, but the terms and conditions on which that connection might be made; and the evidence was insufficient to show the detail of the connection. Secondly, the statute on which the claimants based their claim provided that a dispute as to the terms of connection was to be settled by a court of summary jurisdiction or by arbitration. The existence of these means of resolving this dispute seems to have been the basis for the judge concluding that the declaration was unnecessary.
I do not accept the general principle advanced by the defendants' counsel that a declaration will be refused where the relevant facts have not yet occurred. Whether facts are "hypothetical" is a question of fact and degree, depending on the level of uncertainty attached to their future occurrence. As Zamir & Woolf say (at para 4–79) facts should not be treated as hypothetical as long as they are likely occur within a reasonable timescale. Furthermore, even this principle is qualified by them:
"Where, however, there are sensible practical reasons for granting a declaration the courts will do so even though the events with which the declaration deals have not happened and may not happen."
The defendants' counsel also submitted that in this case the test for whether a declaration should be granted was the same as whether a quia timet injunction should be granted. He put...
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BNP Paribas SA v Trattamento Rifiuti Metropolitani S P A
...it is unusual for a court to grant a declaration that is hypothetical, but it is not impermissible. It says that in San Juan v Allen [2016] EWHC 1502 (Ch) Master Clark set out the correct approach: “I do not accept the general principle advanced by the defendants' counsel that a declaratio......