England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(His Honour Judge Howarth)
HC03C01019

		Royal Courts of Justice Strand, London, WC2A 2LL
		6th July 2004

Lord Justice Neuberger:

1. This is an appeal from a decision of His Honour Judge Howarth, sitting as a Deputy judge of the Chancery Division given on 5^th November 2003. It concerns the interpretation of a restrictive covenant contained in a conveyance made on 23^rd December 1964 ("the 1964 conveyance") between Dorothy Harrison as "the Vendor" and Joseph Moore as "the Purchaser". The property conveyed by the 1964 Conveyance, No 28 Ox Lane, Harpenden, Hertfordshire ("No 28"), abutted the south side of Ox Lane and contained a two-storey dwelling house, and a large rear garden to the south of the house. At the time of the 1964 conveyance, Mrs Harrison was also the owner of adjoining land immediately to the east of No 28, namely No 30 Ox Lane ("No 30"), which at that time was part of her garden. No 28 is roughly rectangular in shape, about 50 feet wide (ie, east to west) and 250 feet deep (ie north to south). No 30 is also roughly rectangular, but a little narrower and shorter. Towards the north of No 30, the site of a "proposed new house" was marked on the plan attached to the 1964 conveyance.
2. By clause 2 of the 1964 conveyance ("clause 2"), the Purchaser entered into certain covenants with the Vendor, in terms which made it clear that the burden and the benefit of those covenants were respectively intended to run with No 28 and No 30. So far as relevant, clause 2 was in the following terms:

"The Purchaser hereby covenants with the Vendor for the benefit and protection of [No 30] and so as to bind so far as may be the land hereby conveyed into whosoever's hands may come that he the Purchaser and the persons deriving title under him will not at any time hereafter:

(a) permit the land hereby conveyed including the site of the existing dwelling house thereon to be used for the erection of more than one two-storey private dwelling house with all necessary outbuildings and garage for use in connection therewith

(b) use or permit of suffer to be used the land hereby conveyed or any part thereof or any building or erection now or at any time hereafter erected thereon for any trade business or manufacture but will use the same as a private residence only."

Clause 2(c) was concerned with ensuring that the front wall of any new dwelling house on No 28 is no nearer Ox Lane than that of the existing dwelling house.

3. By clause 3 of the 1964 conveyance, the Vendor covenanted with the Purchaser in relation to No 30, in terms which made it clear that the benefit and the burden were respectively to run with No 28 and No 30, in effectively identical terms to clause 2(a) and (b), save that Clause 3(a) was drafted so as to omit any reference to a dwelling house presently upon No 30, because there was no such house in existence.
4. The freehold of No 30 is now owned by Mr Richard Marshall and Mrs Brenda Marshall ("Mr & Mrs Marshall") who purchased it on 11^th November 1965. By that time, a house had been constructed at No 30, as permitted by clause 3(a) of the 1964 conveyance, and it is there that Mr & Mrs Marshall live.
5. Jarvis Homes Limited ("Jarvis") has contracted to purchase the freehold of No 28 from the current owners, Mr and Mrs Newbury-Ecob. Subject to obtaining the necessary planning permission, Jarvis proposes to redevelop No 28. The proposed redevelopment involves the following:

i) the house presently standing on No 28 will be demolished;

ii) a new house, in roughly the same position as the present house, with a garage to the rear, will be constructed on No 28;

iii) a roadway is to be constructed roughly north-south through No 28, which will lead to a proposed housing development to be built by Jarvis on the site to the south-west of No 28 ("the development site"). This development is intended to comprise eight detached houses and two semi-detached houses.

6. This roadway ("the roadway") is to run south from Ox Lane, initially just within the western boundary of No 28; it would then bend south-eastwards, running through the centre of what is now the rear garden of No 28; it would then turn south-westwards, and run into the development site through the south-west corner of No 28. The roadway will occupy at least one fifth of the area of the site of No 28. It is intended to be wholly metalled, and to carry two-way vehicular and pedestrian traffic, as it would be the main means of access to, and egress from, the development site. The intention is that it should eventually become an adopted highway. About half-way down the roadway, to its east, and on No 28, will be constructed the garage of No 28.
7. It is, plainly rightly, accepted on behalf of Mr and Mrs Marshall that the demolition of the present dwelling house, and the erection of a new dwelling house with a garage on No 28, would not infringe clause 2(a) or (b) provided, of course, that the new dwelling house has no more than two storeys.
8. However, what is in dispute is whether the construction and/or use of the roadway on the site of part of the garden of No 28, as a means of access to and egress from the proposed new ten-house development on the adjoining development site, would infringe clause 2. The issue was argued before Judge Howarth, who acceded to the arguments put forward on behalf of Jarvis, and concluded that the construction and use of such a roadway would not infringe clause 2.
9. The main argument raised by Mr Timothy Harry, who appears on behalf of Mr and Mrs Marshall in this appeal, is that the use of part of No 28 as a roadway, providing a means of access to and egress from a residential development for all purposes, would involve a breach of clause 2(b). That is because it would result in No 28 not being used "as a private residence only", but as a private residence and a roadway and/or it would result in "part" of No 28 being used as a roadway, rather than as a private residence. Mr Harry's second argument is that the construction of the roadway by Jarvis would be a breach of clause 2(b). His third argument is that the construction of the lamp-posts on the roadway would constitute a breach of clause 2(a).
10. I turn, first, to Mr Harry's main argument, namely that the use of a significant part of what until now has been the garden of No 28, as a roadway for vehicular and pedestrian access to, and egress from, the proposed residential development nearby, would of itself be a breach of clause 2(b). On behalf of Jarvis, Mr Jonathan Brock QC, who, like Mr Harry, appeared before Judge Howarth, contends that there are two separate reasons why use of part of the site of No 28 as such a roadway would not be a breach of clause 2(b). Those two reasons are:

i) the restriction to using "the same as a private residence only", while an additional obligation to that contained in the first part of clause 2(b), applies only to "any building" and possibly also to any "erection" referred to in clause 2(b), or else applies to the "private dwelling house" referred to in clause 2(b), but does not apply to "the land hereby conveyed or any part thereof" in clause 2(b); and even if that is not right,

ii) the use of part of the site of No 28 as a roadway would not infringe the covenant, bearing in mind that the owner of No 28 will not himself be using the roadway other than for residential purposes - ie, he will only use it for the purpose of access to the garage to be built on No 28.

11. Judge Howarth concluded that the words "the same" in clause 2(b) should be treated as limited to "any building", and should not be treated as applying to "the land hereby conveyed or any part thereof" in clause 2(b). Mr Brock suggests, in the alternative, that the words may refer back to the "two-storey private dwelling house" in clause 2(a). I find it hard to see how either construction could possibly be right.
12. It seems to me that, in terms of syntax, the plainly natural effect of "the same" is to refer back to the composite noun clause "the land hereby conveyed or any part thereof or any building or erection now or at any time hereafter erected thereon". Once it is accepted, as the judge appears to have accepted, that "the same" refers to "any building", it is difficult to see how it would not also apply to "any erection" or, equally, to "the land hereby conveyed or any part thereof". Both in terms of logic and in terms of natural meaning, what is to be restricted to use "as a private residence only" is identical to what is to be prohibited for use for "trade, business or manufacture". I find it equally difficult to see how "the same" at the end of clause 2(b) could naturally be read as referring back to any part of clause 2(a).
13. The judge took the view that, while a "building" could be used "as a private residence only", the same could not be said of land. It appears to me that that argument runs into two difficulties. The first is that, even on the judge's reading, the words "the same" must refer back to "any building", which includes not merely the "two-storey private dwelling house", but also the "necessary outbuildings and garage" referred to in clause 2(a). That of itself indicates that the words "private residence" in clause 2(b) have a more extended meaning than that which the judge allowed. The same point may be made about Mr Brock's suggestion that "the same" refers to the "two-storey private dwelling house" in clause 2(a): it would then also refer to the "outbuildings" and "garage" therein mentioned
14. Secondly, and more generally, it does not strike me that it involves an unnatural, let alone an impermissible, meaning of the term "private residence" if it extends to the land which is in the curtilage of a private dwelling house, and which is enjoyed by the occupiers of the private dwelling house in connection with their residential use. Or, indeed, to other buildings on that land.
15. Land which contains a large house and grounds on which are sited a number of outbuildings, a garage, even a cottage for employees, a large garden, a swimming pool, a tennis court, and loose boxes for horses, can perfectly properly be said to be used in its entirety "as a private residence only". Indeed, to limit "a private residence" in clause 2(b) to the dwelling house itself would seem to be contrary to what was intended by the parties to the 1964 conveyance. They plainly distinguished between a "private dwelling house", which is (at least normally) a single building wherein it was no doubt envisaged that most domestic activities, and indeed probably all necessary domestic activities, would be likely to take place, and "a private residence", which appears to me to be intended to extend also to all ancillary residential activities which might reasonably take place in the curtilage of a private dwelling house, whether on land, in buildings, or in structures.
16. I do not consider that this conclusion is called into question by the reasoning of the Court of Appeal in Rolls -v- Miller (1884) 27 Ch D 71 at 84 and 87. In that case, the Court of Appeal was concerned with a covenant which did not contain any equivalent to the vital closing ten words of clause 2(b) in the instant case, and, in any event, the court did not consider any issue relating to the use of the garden or grounds, as opposed to the dwelling house itself.
17. In those circumstances, in disagreement with the judge, I consider that the expression "the same" towards the end of clause 2(b) applies to "the land hereby conveyed or any part thereof or any building or erection now or at any time hereafter erected thereon".
18. That, then, leads to the second point raised in this connection by Mr Brock, namely that the closing ten words of clause 2(b) would not be infringed because it would not be the owner or occupier of No 28 who would be using the roadway as a means of access to, and egress from, the development site; it would be the occupiers of, and visitors to, the houses on that site. In this connection, Mr Brock contrasts the first part of clause 2(b) by which the Purchaser does not merely covenant not to use the land for any trade, business or manufacture, but also not to permit or suffer the land to be so used, with the second part of clause 2(b) which only extends to use, and says nothing about permitting or suffering such use.
19. That argument was attractively and effectively developed by Mr Brock, but I consider that it must be rejected. If one confines oneself simply to the wording of sub-clause (b) of clause 2 on its own, the argument has considerable logical force. If we were not able to look at the governing words of clause 2, it seems to me that we would have been faced with a difficult task. On the one hand, a restrictive covenant should be relatively strictly construed, and there is obvious force in the point that the first part of sub-clause (b) of clause 2 is not merely concerned with use by the owner of No 28, but also with any use which he permits or suffers, whereas the second part does not include a reference to permitting or suffering. On the other hand, the overall impression conveyed by sub-clause (b), at least to me, is that the parties cannot have intended that a substantial part of the land the subject of the covenant would be used as a roadway which was, save to a very limited extent, to be driven and walked over for the benefit of ten houses to be constructed on adjoining land.
20. If it were necessary to determine the question of whether the projected use of the roadway would constitute a breach sub clause (b), read on its own, I incline to the view that it would do so. Although I acknowledge the force of Mr Brock's argument to the contrary, it appears to me important to bear in mind that the way the parties have expressed themselves in the second part of sub-clause (b) is rather different from that in the first part. In the first part, the Purchaser covenants that he "will not … use", whereas in the second part he covenants that he "will use … only". It is obviously easier to argue that a covenantor is not in breach of a covenant that he "will not use" premises in a certain way, if the use is being carried out by a third party, than it would be in a case where the covenant that the covenantor "will use" the premises for a certain purpose "only". Although the latter form of covenant is, as Mr Brock rightly emphasised, ultimately negative in nature, one can well see how it can be said to be broken if the covenantor uses part only of the premises concerned for the permitted use, and makes arrangements so that third parties can use the remainder of the property for another purpose. In the present case it seems inherently unlikely that the parties intended the ambit of the covenant in the first part of clause 2(b) to be wider than that in the second part. Furthermore, it is clear that the second part of the clause was intended to be expressed more briefly than, and by reference to, the first part of the clause: hence the use of the expression "the same".
21. It is unnecessary conclusively to decide that point, in my view, because clause 2(b) must, of course, be read as governed by the opening words of clause 2. Those words make it clear that the covenants contained in clause 2 are intended "to bind" not merely certain classes of person, but No 28 itself, and that the class of persons who are intended to be enjoined from using any part of No 28, are "the Purchaser" and "the persons deriving title under him".
22. The fact that clause 2(b) is intended "to bind" No 28 is, to my mind pretty strongly indicative of the fact that no part of No 28 is to be used for a purpose outwith clause 2(b), and therefore no part of No 28 is to be used other than as a private residence, from which it follows that no part of No 28 is to be used for the roadway.
23. Further, it is clear, and Mr Brock fairly accepts, that if any part of No 28 were used as a roadway (other than purely in connection with the use of the rest of No 28 as a private residence) by the freeholder, or the tenant of any part, of No 28, that would indubitably be a breach of clause 2(b). It also appears to me clear that, if the owner (or a tenant) of No 28 permitted a licensee to occupy part, then there would be a breach of clause 2(b) if the licensee used the roadway for the purpose of the access to the development site: see Mander -v- Falcke [1891] 2 Ch 554 at 557-558. In addition, as I have mentioned, it is currently intended by Jarvis that the roadway will become adopted, in which case its surface will become vested in the highway authority. Mr Brock was inclined to accept that, in such an event, the highway authority would be using the surface as a roadway, and, as the owner of the surface of the roadway, which would be part of No 28, the highway authority would therefore be in breach of clause 2(b).
24. The owners of the houses which Jarvis intends to build on the development site would have to be granted rights to use the roadway. In that connection, they would have to be tenants, or licensees of the roadway, or alternatively, the grantees of rights of way over the roadway. It appears clear from what I have said that their use of the roadway as licensees or tenants would be a breach of clause 2(b). Although we were not referred to any authority on the point, it would, in those circumstances, be very surprising, indeed anomalous, if, by granting them rights of way over the roadway, Jarvis could avoid there being any breach of covenant by the users of the roadway.
25. However, in this connection, it does not appear to me to be necessary to invoke anomaly or common sense. As I have mentioned, the prohibition on use contained in clause 2(b) extends to any "persons deriving title under" the Purchaser. In my judgment, that would include a person who was granted a right of way over part of No 28, whether by the Purchaser or by a person who himself derives title, whether directly or indirectly, from the Purchaser. As a matter of ordinary language, it seems to me that to talk of the grantee of a right of way "deriving title" to his right is not merely permissible: it is correct. A right of way is a legal or equitable interest in land, and the concept of "title" is therefore apt. Furthermore, in the opening words of clause 2, the parties have used the concept of persons "deriving title" in apparent contradistinction to the rather more limited concept of persons "into whose … hands [No 28] may pass", which suggests that the former expression has a rather wider meaning than the latter.
26. In these circumstances, it seems to me to follow that, if Jarvis were to acquire No 28, to construct ten houses on the development site, to construct the roadway on No 28, and then to grant rights (whether in the form of tenancies, licences or easements) to enable the occupiers of those houses and their visitors to use the roadway as a means of access and egress, that would inevitably result in a breach of clause 2(b).
27. It was suggested by Mr Brock that this conclusion would be inconsistent with the reasoning of His Honour Judge Paul Baker QC, sitting as a Deputy Judge of the High Court, in Elliott -v- Safeway Stores plc [1995] 1 WLR 1396 and the decision of the Court of Appeal in Co-operative Retail Services Limited -v- Tesco Stores Limited (1998) 76 P&CR 328. In each of those cases, the land whose proposed use was alleged to be in breach of covenant was to be put to a use which was ancillary to the use of adjoining land. The allegation failed in each case because there would only have been a breach if the land in question had been used for the purpose for which the adjoining land was to be put. The point at issue in the present case is rather different, not least because clause 2(b) effectively restricts the use of No 28 to a single purpose. In any event, save where the wording is effectively identical, the construction of one covenant is unlikely to be of assistance when construing another covenant. Indeed, such an approach to construction can be dangerous; even where the wording of two covenants is identical, they may well be given different meanings, because of their different legal and factual contexts.
28. In these circumstances, while it is probably unnecessary to rule on the second and third ways in which Mr Harry puts the argument for allowing the appeal, I shall do so. The second argument raised on behalf of Mr & Mrs Marshall is, even if the projected use of the roadway will not be a breach of clause 2(b), using No 28 for the purpose of constructing the roadway would be a breach of clause 2(b).
29. In my view, this argument was rightly rejected by Judge Howarth. If the use of part of No 28 for the projected roadway is permissible, then I consider that the construction of the roadway would not be forbidden by clause 2(b). If the existence or use of a particular item (to use a broad word) on the site of No 28 were permissible, then I am of the view that it would require very clear words before the construction or erection of the item on the site was forbidden. The point may be well illustrated by considering the new dwelling house which Jarvis is proposing to erect on No 28. As I have mentioned, there is no doubt but that Jarvis would not be precluded from demolishing the present dwelling house, and erecting a new two-storey dwelling house, on No 28; yet, if Mr Harry's second argument is correct, the new dwelling house could only be erected by someone who was not engaging in the trade or business of erecting houses. I suppose that it could be said that a development which complies with clause 2(a) represents an implied exception to the prohibition on trade or business in clause 2(b). However, for my part I do not see why, if Mr Harry's second argument were correct, clause 2(a) could be said, effectively of necessity, to permit a dwelling house to be constructed by someone who is thereby carrying out his trade or business.
30. Quite apart from this, I think Judge Howarth was right when, in the course of rejecting Mr Harry's second argument, he expressed the view that clause 2(b) was primarily concerned with use, rather than with building works. The reference in clause 2(a) to "the erection", in the sense of the act of erecting or constructing, and the words "erected thereon" in clause 2(b) itself, both suggest a contra-distinction in the parties' minds between works of construction and the like and user. Although Mr Harry, correctly in my view, does not suggest that the construction of the roadway can be described as effecting an "erection" or that a roadway can be described as "erected", it seems to me that such works of construction were not envisaged by the parties as falling within the ambit of clause 2(b).
31. Finally, I deal with Mr Harry's third argument. The roadway, if it were constructed as projected, would have some substantial lamp-posts, at least two of which, it seems, would be situated on No 28. Mr Brock, correctly in my view, concedes that those lamp-posts would be erections. In those circumstances, it is contended that, even if it were open to Jarvis to construct the roadway and arrange for its use as a means of access to and egress from, the development site, it would not be open to them, in light of clause 2(a) to construct or erect these proposed lamp-posts.
32. Clause 2(a) is slightly strangely expressed, not least because the word "used" appears a somewhat odd verb, given that it is clause 2(b) which is primarily concerned with use. Clause 2(a) is directed to what can be built on No 28.
33. However, in my judgment, clause 2(a) does prevent the erection of the lamp-posts on No 28. There can be no doubt but that the lamp-posts do not fall within the expression "one two-storey private dwelling house with all necessary outbuildings and garage". To my mind, clause 2(a) does lead to the conclusion that "the erection" of any item or thing is precluded unless it falls within the words quoted above. To put it in a slightly negative way, it is difficult to see how clause 2(a) could be construed in a way which did not lead to that conclusion.
34. It seems to me, therefore, that the words "the erection of", mean effectively "erecting", and that this would be a proper way of describing the placing of a lamp-post on No 28. Clause 2(a) would, therefore, be infringed, in my view, by the installing of lamp-posts on the roadway , provided, of course, that the lamp-posts were on No 28.
35. Mr Harry did not suggest that the construction of the roadway itself would be precluded by clause 2(a). I mention that because it appears to me that there is a real argument open to Mr & Mrs Marshall to the effect that clause 2(a) is not merely concerned with construction works which could be said to involve an "erection", which I accept would not extend to the construction of the roadway, but also with buildings works generally, which would extend to the roadway. In this connection, I note that clause 2(a) does not preclude "the erection" of anything other than "one two-storey private dwelling house with all necessary outbuildings and garage". As mentioned, it forbids No 28 "to be used for the erection of more than one two-storey private dwelling house with all necessary outbuildings and garage". There may be an argument, and I put it no higher than that, for contending that this covenant was concerned with use for building works generally, as opposed to more permanent use, which is governed by clause 2(b), and that therefore it would preclude the construction of the roadway. The point was not developed in argument, and, in the event, it would have been unnecessary to have developed it.
36. In all the circumstances, it follows that I would allow this appeal.

Lord Justice Rix:

37. I agree.

Lord Justice Thorpe:

38. I also agree.