Sefton v Tophams Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SELLERS,LORD JUSTICE HARMAN |
| Judgment Date | 28 May 1965 |
| Judgment citation (vLex) | [1965] EWCA Civ J0528-3 |
| Date | 28 May 1965 |
| Court | Court of Appeal |
[1965] EWCA Civ J0528-3
In The Supreme Court of Judicature
Court of Appeal
(From: Mr. Justice Stamp)
Lord Justice Sellers
Lord Justice Harman and
Lord Justice Russell
Mr. G. H. Newscm, Q. C. and Mr. J. A. Gibsok (instructed by Messrs. Nicholson, Graham & Jones) appeared on behalf of the Appellants the First Defendants.
Mr. Peter Foster, Q. C. and Mr. M. J. Pox (instructed by Messrs. Debenham & Co.) appeared on behalf of the Appellants the Second Defendants.
Mr. C. A. Settle, Q. C. and Mr. A. J. Balconbe (instructed by Messrs. Halsey Lightly & Hemsley) appeared on behalf of the Respondent (Plaintiff).
The essential facts and circumstances of this action are clearly and fully stated in the judgment of Mr. Justice Stamp, from whose decision these appeals have been brought. I avail myself of that account and do not seek to restate the history and features of the litigation but turn to the issues raised before this court arising out of the events which have occurred.
The first defendants, Tophams Ltd. (referred to as "Top-hams") appeal against an injunction, which the learned judge by restraining them an order of the 30th October, 1964, imposed upon them, from causing or permitting certain specified land to be used otherwise than for horse-racing, another area of land as specified to be used otherwise than for agricultural purposes or horse-racing, and a third specified area to be used otherwise than for agricultural purposes. The whole of the land so restricted comprises the Aintree Racecourse renowned in horse-racing circles, and perhaps even more widely, as the course of the Grand National.
On the 2nd June, 1964, Tophams entered into an agreement to sell to the second defendants (referred to as "Capital") the Aintree Racecourse for £900,000. If Capital acquire the land they intend to build houses upon it and this intention and this purpose of the purchase by Capital was at all material times known by Tophams. Lord Sefton, whose family owned this land over the years until 1949, when it was conveyed to Tophams, is anxious to retain it for horse-racing, in which sport he is greatly interested and in the administration of which he takes a leading part.
The learned judge has accepted the plaintiff's submission that by entering into the contract to sell the land to Capital Tophams will be in breach of the contract contained in the conveyance of the land in question by Lord Sefton to Tophams dated the 21st December, 1949, if Tophams are allowed to complete on the date fixed for conveyance to Capital, the 30th September, 1965.
It is to restrain that threatened breach, as the plaintiffalleges, that these proceedings were brought.
For over a hundred years the land had been leased from the Sefton family by the Topham family and latterly by Tophams who throughout promoted horse-racing there. The conveyance by Lord Sefton to Tophams in 1949 replaced the then existing leases. The leases contained covenants which precluded the land from being used otherwise than for horse-racing or agriculture but it does not seem to have been stipulated at any time and it was not stipulated in the conveyance of 1949 that Tophams were to maintain or continue horse-racing on the land. Tophams, it is said, have found that horse-racing at Aintree is unprofitable and they have decided to give it up. The judgment takes a modified view of this but it is given as the reason for Tophams' sale to Capital.
By clause 3 of, and the Third Schedule to, the conveyance Tophams covenanted with the plaintiff (but so that the covenant should be binding on Tophams, in the events which have happened, only during the lifetime of Lord Sefton and so that Tophams should not remain liable for a breach of covenant occurring on or in respect of the Aintree Racecourse or any part thereof after they had parted with all interest therein) not to cause or permit the yellow land, excluding the Sefton Arms Hotel, to be used otherwise than for the purpose of horse-racing under Jockey Club and Rational Hunt Rules and not to cause or permit any buildings then or thereafter to be erected on the yellow land other than the said hotel to be used otherwise than as dwelling-houses to be occupied by managers, trainers and others connected with the racing on the course or for the purposes of stables, stands and other purposes necessary for or incidental to the promotion of horse-racing without the previous licence or consent of the plaintiff in writing.
With regard to the remainder of the area Tophams were not to cause or permit it to be used otherwise than for agricultural purposes except the brown land when it was used for racing and Steeplechasing, and the grey land or any building to be erectedthereon could be used for a purpose necessary for or incidental to the promotion or conduct of horse-racing.
There are exceptions which are not here material. The decision depends on the obligation placed on Tophams that they shall "not cause or permit" the Aintree Racecourse to be used otherwise than for the purposes stipulated.
It would seem that the parties regarded the conveyance as imposing the covenants not only on Tophams but also on any successor in title and there is the express stipulation releasing Tophams after they had parted with all their interest.
It has been accepted at the Bar that in the circumstance no obligation to fulfil the covenants will pass to Capital if the conveyance to them is completed. Lord Sefton now has no adjacent land which could benefit by the covenants.
The question for decision is therefore whether Tophams, if they convey this land to Capital without imposing upon them the same covenants as those by which Tophams are bound, will be "causing or permitting" the breach of them.
It is clear and accepted that if Tophams complete their contract of the 2nd June, 1964, horse-racing at Aintree will permanently cease and Lord Sefton will have lost the benefits for which he made provision with Tophams. During his lifetime he was to retain the exclusive use of his private box and a private stand with provision for repairs and decorations and in the event of reconstruction alternative accommodation. These amenities are of course dependent on the continuance of horse-racing events.
The argument for Lord sefton relied on both the words "cause" and "permit" and I think the learned counsel gave preference to "cause". If houses are to be built, which is the use to which Capital intend to put the land, I would incline to the view that it would be Capital who would "cause" that use. It would be their decision and their conduct which would bring about the construction of houses and therefore the use of the land for building purposes. But that cannot be done without the transfer of the land by-Tophams who know the use to which Capital proposeto put it, for which use Capital are willing to pay so large a price. Although I find the point a fine one I am of opinion that a conveyance of the land by Tophams, with such knowledge, would be "permitting" the use of the land in a manner contrary to that to which they bound themselves during the lifetime of Lord Sefton and therefore it would be a breach of contract.
By clause 9 of the contract of 2nd June, 1964, "the parties", that is Tophams as well as Capital, were forthwith to appoint a Planning Consultant with irrevocable instructions to prepare a planning scheme and such a scheme was to be the basis of an application for Outline Planning Permission. Such participation by Tophams would be active conduct by them towards and with a view to the erection of houses on the land. It goes beyond neutrality in the matter of the future use of the land and adds something to the view that Tophams are, by their conduct, permitting the prohibited use.
By this contract Tophams are not merely acquiescing in Capital's plan to build houses, they are actively transferring the land to them so that they can do so. This seems to me to amount to permitting the prohibited user.
The judgment of Mr. Justice Stamp and the judgments of my brethren review the cases which were cited in the course of the arguments. I do not further refer to them, with one exception, as I do not find them of any real help in the solution of the present esse. The judgment of Mr. Justice Simonds (as he then was) in A. ( Lewis Co. (Westminster) v. Bell Property Trust Ltd. 1940 Chancery at page 351) concludes as follows: "But if I am wrong on that, then a difficult question arises, namely, whether that which is being done is being or has been permitted or suffered by the defendants. If it were necessary to form a final conclusion on that point, which it is not in view of the decision to "Which I have come on the first point, I should want a further consideration of the matter. I merely throw out this suggestion. No case has been cited to me which, in my view, involves the Proposition that a person who has entered into such a covenant asthis and then demised the premises for a purpose which he knows or ought to know would involve the prohibited user, is entitled to rely on that fact and say: 'I am not liable; I have not permitted this, because I have put it out of my own power to prevent the user for the purpose of which I have demised the premises'. It is not necessary to come to a final conclusion on that matter, because, in the view which I take on the first point, the question does not arise".
That is a provisional view of that distinguished judge but, as it stands, it gives strong support to the argument on behalf of Lord Sefton.
I recognise that after the conveyance Capital would be free and uncontrolled in the use to which they put the land. Their decision may cause the use but I do not regard that...
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