Tina Lorraine Kensell v George Alexander Khoury
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Zacaroli,Mr Justice Zacaroli |
| Judgment Date | 13 March 2020 |
| Neutral Citation | [2020] EWHC 567 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: CH-2019-000275 |
| Date | 13 March 2020 |
[2020] EWHC 567 (Ch)
Mr Justice Zacaroli
Case No: CH-2019-000275
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
APPEALS (ChD)
On appeal from HHJ Gerald sitting at the County Court at Central London on 24 May 2019
7 Rolls Building
Fetter Lane
London EC4A 1NL
Brie Stevens-Hoare QC & Lina Mattsson (instructed by Leslie Trevor & Co Solicitors) for the Appellant
Martin Hutchings QC (instructed by William Graham Law LTD) for the Respondents
Hearing dates: 19 February 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This is an appeal against an order of HHJ Gerald sitting at the County Court at Central London. The order was drawn up on 7 October 2019 but reflects two separate decisions. In the first decision, made on 24 May 2019, the judge permitted the claimants in the action, the respondents to this appeal, (the “Claimants”) to make amendments to the particulars of claim. In the second decision, dated 8 August 2019, while the Claimants were ordered to pay the costs of the amendments in any event, the judge awarded the Claimants their costs of the amendment application. The defendant in the action, the appellant to this appeal (the “Defendant”), appeals both decisions.
The Claimants and the Defendant are neighbours. They purchased their respective properties (in the case of the Claimants, an oasthouse and in the case of the Defendant, a barn), both of which were on land adjacent to Upper Tollhurst Farm in East Sussex, within a month of each other in the autumn of 1996. For some years prior to that the Farm and adjacent land (including both the barn and the oasthouse) had been in the ownership of members of the Mulleneux family.
The transfer of the barn to the Defendant contained various covenants. By clause 4.2.4, the Defendant covenanted with the seller to “…comply at all times with all planning conditions and requirements of the Local Planning Authority or any other statutory or competent authority relating to the Property” (the “Planning Covenant”). By clause 4.2.1, the Defendant covenanted with the seller “[n]ot to use the Property or allow it to be used in a way which would cause nuisance or damage to the Adjoining Owner or any occupier of the Retained Land” (the “Nuisance Covenant”). Similar covenants were contained in the transfer of the oasthouse to the Claimants and in the transfer of the farmhouse to another purchaser around the same time.
In 2004 the Defendant obtained planning permission to convert the barn into a four-bedroom house. The Claimants contend that the conversion works were carried out in breach of that planning permission.
In 2006 the local council issued enforcement notices requiring the Defendant to alter the works in certain respects so as to comply with the planning permission. It appears that the enforcement proceedings, including various appeals, lasted for several years, but ultimately no enforcement action was taken.
On 31 March 2012 the Claimants issued the claim form in this action, seeking a declaration that the Defendant was in breach of the Planning Covenant and an order that she pull down the offending parts of her property. In the particulars of claim, the sole basis upon which the Claimants (who were not the seller of the barn) claimed to be entitled to enforce the Planning Covenant was that the sale of the barn and the oasthouse formed part of a building scheme.
The Claimants did not actively pursue the claim, however, until 2015 when they applied to amend the particulars of claim to include a common law claim in damages for nuisance arising from the manner in which the building works had been carried out.
On 10 June 2016 directions were given for trial, including for disclosure, witness statements and expert evidence.
Throughout 2016 the Defendant's solicitors pressed the Claimants' solicitors for particulars of, and the evidence relied on to support, the claim based on a building scheme. On receiving confirmation that the Claimants had produced all the evidence on which they relied, the Defendant issued an application for summary judgment on the claim based on breach of covenant, the sole basis of which remained the contention that there was a building scheme.
On 23 March 2017 HHJ Simpkiss sitting in the County Court at Brighton gave judgment in favour of the Defendant and struck out the claims based on breach of covenant. The only extant claim, therefore, was the common law claim in damages for nuisance.
The Claimants appealed that decision. The appeal came on for hearing before me on 16 January 2018. The Claimants had in the meantime instructed new counsel. Shortly before the hearing of that appeal, the Claimants' solicitors emailed draft amended grounds of appeal and draft amended particulars of claim to the Defendant's solicitors, asserting a different basis for enforcing the covenants (including the Nuisance Covenant), namely section 56 of the Law of Property Act 1925 (“Section 56”). According to a witness statement subsequently filed by the Claimants' solicitor, the newly instructed counsel had “…taken a different view on the merits and the prospect of success in respect of the argument under Section 56
At the hearing of that first appeal, I refused to entertain an application to amend the grounds of appeal, largely because the new claim potentially raised new issues of fact and the Defendant had been given insufficient time to consider the amended grounds prior to the hearing.
In a judgment delivered on 9 February 2018 ( [2018] EWHC 217 (Ch)) I dismissed the appeal. At [8] of that judgment, having referred to the reasons why I refused to entertain the amendment application, I noted that “[t]he Claimants are free … to apply to the County Court for permission to amend the claim (and the Defendant remains free to advance such objections as she may have to that application)”.
After some further delay, on 10 April 2018 the Claimants sought the Defendant's consent to their proposed amendment. The Defendant declined to consent, and an application to amend was issued on 3 May 2018. For reasons which do not matter for the purposes of this appeal, but which include the matter being transferred to the County Court at Central London, the application did not come on for hearing for a further year. It was heard by HHJ Gerald on 23 May 2019.
The Defendant opposed the amendment on three grounds: (1) the new case was without any merit; (2) the new case was an abuse of process on the basis of the principle in Henderson v Henderson (1843) 3 Hare 100; and (3) the court should not exercise its discretion to allow the amendment.
The First Judgment
In the judge's first judgment, dated 24 May 2019, he granted the Claimants permission to amend.
As to the merits of the new claim, he held that the Claimants had a real prospect of success in establishing an entitlement to enforce the covenants pursuant to Section 56. There is no appeal against that conclusion.
As to the argument based on Henderson v Henderson, the only authority cited to the judge was the Henderson case itself. At [33] of the first judgment the judge cited the well-known passage from the judgment of Sir James Wigram V-C:
“The court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points on which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.”
The judge noted that he was dealing with an amendment application made in the same action in which the previous judgment had been given, as opposed to a separate action. He then noted that the Defendant had been unable to cite any authority which supported the proposition that the Henderson principle applies “within the four corners of existing proceedings even where there has been summary judgment on the key issue.” He thought it would be surprising if the principle did apply in such circumstances. While it would have been better if the Section 56 claim had been pleaded earlier, the fact that it had not been was “not sufficient for this rule to be engaged.”
The judge then went on to conclude that the Henderson principle was in any event not engaged for the separate reason that the case concerned the “general enforceability of the covenants contained in the transfer which are of a prospective nature and are valuable and plainly on one reading part and parcel of and intended to benefit all three of the lots which were sold at auction.”
He noted that it was not clear, on the Defendant's case, how far the Henderson principle would preclude further action in relation to matters factually unrelated to what was now in dispute. He considered that it was difficult to see how the principle could sensibly be said to preclude the Claimants relying upon Section 56 in order to enforce the covenants, for example, “if for whatever reasons the defendant failed to pay their contribution towards maintenance of the shared driveways”. For this...
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