R v Braintree District Council ex parte Malcolm William Halls
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE EVANS,Lord Justice Laws,LORD JUSTICE LAWS,Lord Justice Evans,MR JUSTICE JONATHAN PARKER |
| Judgment Date | 01 March 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J0301-10 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | QBCOF 99/0785/C |
| Date | 01 March 2000 |
[2000] EWCA Civ J0301-10
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CROWN OFFICE LIST
(Mr Justice Jackson)
QUEEN'S BENCH DIVISION
Lord Justice Evans
Lord Justice Laws
Mr Justice Jonathan Parker
QBCOF 99/0785/C
MR A ARDEN QC and MR A GORE (Instructed by Messrs Stevens, Haverhill CB9 8AD) appeared on behalf of the Appellant
MR R SINGH (Instructed by Messrs Holmes & Hills, Braintree CM7 9AJ) appeared on behalf of the Respondent
Lord Justice Laws will give the first judgment.
This is an appeal against a decision of Jackson J given in judicial review proceedings on 2nd July 1999. The appeal, which was launched on 26th July 1999, is brought with permission granted by the judge at first instance. Jackson J dismissed the appellant's application for judicial review.
In his skeleton argument for the respondent district council, Mr Rabinder Singh submits at the outset that it is important to have precisely in mind the nature of the district council's decision in respect of which judicial review was sought. It was as follows:
"The refusal of the respondents by letter dated 9th January 1998 to agree to the release of a covenant imposed on the sale of a freehold reversionary interest in the property of the respondents to the applicant and his late father by which the purchasers and their successors in title were to use the property thereof as a single private dwelling house only.
Alternatively the refusal by the respondents to waive or vary the covenant for the purpose of allowing the erection of a further dwelling-house within the curtilage of the property."
The appellant is the freehold owner of 7 Sages End, Helions Bumpstead in Essex ("the property"). The property was originally owned by the respondent council. The appellant and his father were council tenants living in the property. In 1988 they exercised what is called the "right to buy" pursuant to section 118 of the Housing Act 1985. In October 1987 the district valuer had produced a written valuation of the property in the sum of £50,000. It is plain, as the judge stated and all parties agreed, that this figure did not include any allowance for the possibility that in the future part of the garden might be sold off as development land.
The property was duly conveyed to the appellant and his father on 22nd August 1988. The price was £20,000. That was stated to be the market value less £30,000, being the statutory discount to which the purchasers were entitled. I shall come to the legislation in due course.
The conveyance is before us. It included in the third schedule a covenant binding the purchasers in these terms:
"(b) To use the property as a single private dwellinghouse only and not to carry out or to permit to be carried out on the property any trade or business of any description whatsoever and not do or cause suffer or permit anything to be done on the property which is or might grow to be a source of nuisance or annoyance to the Council the owners or occupiers of adjoining or neighbouring properties."
The respondents' offer notice under Part V of the Housing Act, dated 6th November 1987, had warned that the conveyance would include a provision insisting on dwelling-house use only. Some time after the conveyance was executed, the appellant's father sadly died and the appellant became the sole owner of the property. On 11th July 1995 the respondent council in its capacity as local planning authority granted to the appellant planning permission to erect a further dwelling-house within the property's curtilage. On 24th July 1996 the appellant's solicitors wrote to the respondent as follows:
"Mr Halls has agreed, subject to Contract, to sell part of the garden land of the property, which he purchased in 1988 from the Council, as a Building plot.
Your Council has granted Planning Permission in outline for a bungalow and garage.
Could you please confirm that the Council's consent to the sale off for the purposes of the restrictive covenant in the Conveyance to Mr Halls."
The respondents' substantive reply is dated 22nd August 1996. In that letter they said:
"As you are aware, the Conveyance from the Council to Mr Halls contains a covenant which permits the property to be used as a single private dwellinghouse only.
The Council would however be prepared to release Mr Halls from this covenant subject to:
(a) Mr Halls paying to the Council a sum equivalent to 90% of the open market value of the building plot."
Other conditions were then set out, but I may break off there.
There followed further correspondence, as the judge said concerned with two matters, the reasonableness of the sum demanded and whether the respondent was entitled to demand any sum at all.
On 27th September 1996 the appellant's solicitors wrote thus:
"… we should be interested to hear the Council's original justification for imposing the restrictive covenant when the sale was first completed under the right to buy legislation."
On 1st October 1996 the respondents replied:
"With regard to the final paragraph of your above mentioned letter [that is the letter of 27th September] I would advise that the Council imposes this restrictive covenant on the sale of all Council houses in order to realise any future development value. Obviously when the property is sold to the tenant it is valued as a single private dwellinghouse and the valuation ignores any possible development value."
At length the respondent wrote on 9th January 1998. This letter, as I have said, constitutes the decision formally under challenge. It was written in response to a letter from the appellant's solicitors of 22nd December 1997 in which this was said:
"We are not prepared to disclose Counsel's Opinion, but the gist of it is basically thus.
(i) The relevant provision in the Housing Act prohibits charging for such consents.
(ii) Your earlier letter of 1st October 1996 confirms that there is a blanket policy to include this provision and that it is done for the specific purpose of charging for consents.
(iii) That (i) and (ii) are irreconcilable.
(iv) The valuation of the property on sale by the Council was, by virtue of the statutory provisions, an open market value."
The letter of 9th January 1998 referred to paragraphs 4-6 of Schedule 6 to the Housing Act 1985. I will come shortly to the statute, but it is convenient, in order to make sense of the letter, just to read paragraphs 5 and 6 of that schedule at this stage:
"(5) Subject to paragraph (6) and to Parts II and III of this Schedule, the conveyance or grant may include such covenants and conditions as are reasonable in the circumstances.
(6) A provision of the conveyance or lease is void in so far as it purports to enable the landlord to charge the tenant a sum for or in connection with the giving of a consent or approval."
The council's letter of 9th January 1998 continued thus:
"It is this Council's view that the Council could impose within the Conveyance of 7 Sages End, Helions Bumpstead 'such covenants and conditions as are reasonable in the circumstances'. The Conveyance of 7 Sages End to your client does not impose any condition which purports to enable the Council to charge the tenant a sum for or in connection with the giving of a consent. It is therefore the Council's view that the Council are not in any way breaching the terms of the Housing Act 1985 because their Conveyance does not include an undertaking on the part of your client to pay a charge for a consent. Furthermore, the request made is for the release of a restrictive covenant, not for the grant of a consent.
(ii) The Council's letter of 1st October 1996 makes no mention of any charge for consent for the release of a restrictive covenant. I can confirm that it is the council's policy that a restrictive covenant of this kind is imposed on every council house sold. It is the Council's contention that it is a reasonable covenant in as much as if it were not imposed any Council house on any estate could be used for whatever purpose (assuming of course that planning permission could be obtained).
(iii) The Council does not consider that (i) and (ii) are irreconcilable. The covenant is a restrictive one which is absolute. If a purchaser wishes to be released from that covenant then it is for him to negotiate terms with the Council for that release. If the terms cannot be negotiated then obviously the covenant must be adhered to.
(iv) It is confirmed that the property was sold at an open market value on the basis that the property was a dwelling-house. The valuation therefore ignored any possible development value."
In addition to paragraphs (5) and (6) of Schedule 6, I should next notice these following provisions of the Housing Act 1985 dealing with the right to buy regime. Section 126(1):
"The price payable for a dwelling-house on a conveyance or grant in pursuance of this Part is—
(a) the amount which under section 127 is to be taken as its value at the relevant time, less
(b) the discount to which the purchaser is entitled under this Part."
Section 127(1) provides in part:
"(1) The value of a dwelling-house at the relevant time shall be taken to be the price which at that time it would realise if sold on the open market by a willing vendor—
(a) on the assumptions stated for a conveyance in subsection (2)
Subsection (2) reads:
"(2) For a conveyance the assumptions are—
(a) that the vendor was selling for an...
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