Tophams Ltd v Earl of Sefton
| Jurisdiction | England & Wales |
| Judge | Lord Reid,Lord Hodson,Lord Guest,Lord Upjohn,Lord Wilberforce |
| Judgment Date | 30 March 1966 |
| Judgment citation (vLex) | [1966] UKHL J0330-2 |
| Date | 30 March 1966 |
| Court | House of Lords |
[1966] UKHL J0330-2
House of Lords
Lord Reid
Lord Hodson
Lord Guest
Lord Upjohn
Lord Wilberforce
Upon Report from the Appellate Committee, to whom was referred the Cause Tophams Limited against Earl of Sefton, that the Committee had heard Counsel, as well on Monday the 21st as on Tuesday, the 22d, days of February last, upon the Petition and Appeal of Tophams Limited, of Racecourse Offices, Aintree, Lancashire, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 28th of May 1965, so far as therein stated to be appealed against, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order, so far as aforesaid, might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of the Right Honourable Hugh William Osbert Earl of Sefton, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, in the name of the House of Lords, by the Lords of Appeal sitting in the House of Lords during the Dissolution of Parliament, by virtue of a Writing by Her Majesty the Queen under Her Sign Manual, dated the 10th day of March 1966, pursuant to the provisions of the Appellate Jurisdiction Act 1876, That the said Order of Her Majesty's Court of Appeal, of the 28th day of May 1965, in part complained of in the said Appeal, be, and the same is hereby, Discharged: And it is further Ordered, That the Cause be, and the same is hereby, remitted back to the Chancery Division of the High Court of Justice with a Declaration that the Appellants have not threatened to "cause" or "permit" the user of Aintree Racecourse otherwise than in accordance with the covenant: And it is also further Ordered, That the Respondent do pay, or cause to be paid, to the said Appellants the Costs incurred by them in the Court of Appeal, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments.
My Lords,
I have found this a difficult case. It turns on the meaning of certain provisions in a Conveyance of 21st December, 1949 by which the Respondent conveyed Aintree racecourse to the Appellants. In these provisions the parties have failed to express their intention clearly and we must now deduce their intention as best we can from the words which they have used.
I find myself in general agreement with the speech of my noble and learned friend Lord Wilberforce. I need not restate the facts, and I shall only deal briefly with the two questions which appear to me to be crucial. The first is whether covenants restricting the use of the land conveyed were intended to run with the land so as to bind purchasers from the Appellants who had notice of them. The second is the meaning of the words not to "cause or permit" the land to be used otherwise than for the purposes of horse racing.
The first question is important because if the covenants were to run with the land there would have been no need to make further provision limiting the right of the Appellants to resell the land whenever they might think fit: but if the covenants were not to run with the land then, unless the right of the Appellants to sell was limited, they could have resold the land immediately to a purchaser who would have been free to abandon racing and use the land for any other purpose which he might think was profitable. I would infer from reading the deed as a whole that this cannot have been what the parties intended. I do not think that an intention that the covenants were to run with the land can be inferred, and therefore I would expect to find elsewhere in the deed some limitation of the right of the Appellants to resell the land.
So the second question appears to me to be whether the obligation not to cause or permit the land to be used for purposes other than horse racing can reasonably be read as limiting in any way the freedom of the Appellants to resell the land. And in the circumstances which have occurred that question becomes the question whether it can reasonably be held that the Appellants would "permit" the use of the land for purposes other than horse racing, if they sell it to a purchaser who to their knowledge intends to use it for other purposes.
The Appellants argue that a person cannot be said to permit anything unless when that thing happens he has some right or power to prevent it: here when the purchaser from the Appellants begins to use the land for building, they will have ceased to have any power or right to prevent it because they will have retained no right or interest in the property. I would not deny that in some contexts the word "permit" has that limited meaning, but in my view the word often has a wider meaning. Suppose I know that a stranger intends to trespass on and damage my neighbour's property if he can, but he cannot unless I remove an obstacle which is under my control. If I remove that obstacle with the purpose that he shall be able to do as he wishes, then it appears to me to be a perfectly ordinary use of the English language to say that I have permitted him to trespass. To permit can mean more than to issue a permit or licence. So I would agree with my noble and learned friend that if the Appellants were to complete the proposed sale they would permit the purchasers to use the land for building development. I would therefore dismiss this appeal.
My Lords,
The injunction against which this appeal is brought was made in a quia timet action based on a threatened breach of a contract between Lord Sefton and Tophams, Limited dated 21st December, 1949. The threat is by Tophams, Limited to complete a contract dated 2nd June, 1964, for the sale of the Aintree racecourse to Capital and Counties Property Co. Ltd. with the knowledge that the purchasers intend to use the racecourse for development, that is to say otherwise than for horse racing.
The covenant to which the threat relates is contained in clause 3 of the 1949 conveyance:—
"The Purchasers (but so that this present covenant shall be binding on the Purchasers only during the lifetime of the Vendor … and so that the Purchasers shall not remain liable for a breach of this covenant occurring on or in respect of the lands hereby conveyed … or any part or parts thereof after they shall have parted with all interest therein) HEREBY COVENANT with the Vendor that they the Purchasers will observe and perform the restrictive and other covenants set out in the Third Schedule hereto"
The relevant extract from the third schedule is
"As to the yellow land … not to cause or permit the yellow land … to be used otherwise than for the purposes of Horse Racing …"
It is not now contended that Tophams are threatening to cause the land to be misused but that they are threatening to permit such misuse by completing the contract of sale with the knowledge that the purchasers are intending to develop the land for building.
If by selling the land with this knowledge they can fairly be said to have permitted its misuse in the face of the covenant the appeal must fail. If knowledge alone of the intentions of the purchaser is insufficient to amount to permission the appeal must succeed.
It seems to me that if knowledge is enough Tophams could equally be said to be permitting the misuse of land if they only turned a blind eye to it, but Lord Sefton's case, admitted by Tophams Limited, is that the latter had actual knowledge.
No doubt in construing the contract of 1949 the surrounding circumstances are relevant. These are the long historical connection both of Tophams and Lord Sefton with racing and, in particular, with the famous Aintree racecourse. Prior to 1949 the racecourse had been held under a succession of leases the last of which was a lease dated 12th December, 1929 granted by Lord Sefton to Tophams containing covenants precluding the use of the racecourse from being used otherwise than for racing. It was clearly in the interest of Tophams who had spent money on stands and improvements to purchase the racecourse and this Lord Sefton eventually agreed to but he in turn was naturally concerned to preserve as far as he could the position that the property be used for no other purpose than racing.
With this background in mind it is necessary to ascertain how far Lord Sefton's purpose was achieved.
Russell L .J. approached the case on the assumption that the parties envisaged that by clause 3 of the conveyance what they were doing would impose restrictions that would be binding on a successor of the purchaser. We do not know, as he pointed out (for there is no evidence), whether there was any dominant land in the hands of Lord Sefton which would have enabled him to say that the covenant was binding on the land conveyed in the hands of a purchaser. Moreover, there is ground for argument that the covenant was personal to Lord Sefton who by the same conveyance reserved to himself right to his private stand, etc. Further, the language of clause 3 if contrasted with clause 4 which was drawn so as to bind the land points to the covenant in clause 3 being personal to Lord Sefton. If the approach of Russell L.J. were correct there would I think be little reason why Tophams should be restrained from selling, but I prefer to approach the case on the footing that this assumption cannot be relied upon and to consider whether by agreeing to sell the racecourse with the knowledge that the purchasers intend to build on it they can be said to have permitted the use of the land in breach of their contract.
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