Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
High Court of Ireland Decisions
You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Belmont Securities Ltd. & Ors v. Crean & Ors [1988] IEHC 20 (17 June 1988)
URL: http://www.bailii.org/ie/cases/IEHC/1988/1988_IEHC_20.html
Cite as: [1988] IEHC 20
[New search] [Printable RTF version] [Help]
THE HIGH COURT
1988 No. 4005P
BETWEEN
BELMONT SECURITIES LIMITED INDEMNITY INVESTMENTS LIMITED KIERAN YOUNG AND HELEN YOUNG
PLAINTIFFS
AND
WILLIAM CREAN, UNA CREAN,
JOHN TUITE AND CARMEL TUITE
DEFENDANTS
Judgment delivered by O'Hanlon J. the 17th day of June 1988
The first-named Plaintiffs developed a small shopping complex at Killarney Park, Bray, comprising three units, and proceeded to sell off the freehold interest in these units in or about the year 1980. The intention was that one shop would be sold as a Pharmacy, one as a Newsagency, and one for the Grocery business. The third and fourth-named Plaintiffs have now acquired the grocery shop, and the third and fourth-named Defendants are carrying on business in the newsagent's under a Lease for 35 years granted by the present owners of the freehold interest in that property.
The first conveyance of the newsagent's premises was dated the 21st April, 1980, and was made by the first-named Plaintiff to Hugh O'Reilly in fee simple. The Deed of Transfer contained a covenant on the part of the Purchaser, for himself, his Successors and Assigns, not to use the ground floor of the unit conveyed for any purpose other than as a Newsagent, Tobacconist, sale of ice cream, confectionery and minerals, children's toys, greeting cards, records and fancy goods, subject to further provisions in the said Deed as to the circumstances under which the covenantor or his successors or assigns might be released from the terms of the said covenant or the terms of same were to be relaxed or modified.
The Plaintiffs complain that the third and fourth-named Defendants are now using the said premises for the purpose of carrying on a grocery business as well as a newsagency and confectioner's, thereby bringing it into direct and harmful competition with the grocery business carried on in the next Unit by the third and fourth-named Plaintiffs, and these proceedings are brought to restrain the said Defendants from continuing an alleged breach of the terms of the restrictive covenant already referred to.
It seems clear that the intention of the developers was to create a situation in which the different Units would be used for separate and distinct types of business which would not be in competition with each other, and it also seems clear that the third and fourth-named Defendants have not been complying with the terms of the covenant entered into by their Lessor's predecessor in title. The said Defendants contend, however, that this change of user took place from the very outset, dating back to the year 1980 when the premises were first conveyed by the Developers to Mr. O'Reilly, and that a grocery business has been carried on openly in the premises ever since, as an ancillary business to the newsagency. In these circumstances they say that it would be inequitable and unconscionable at this stage to seek to enforce the letter of the restrictive covenant, particularly in a situation where the third and fourth-named Defendants have incurred very heavy financial liabilities in the belief that the . terms of the covenant had, in effect, been allowed to become a dead letter.
The creation of covenants intended to bind the fee simple in a parcel of land for the future, and in the hands of-future owners, is a more difficult and complex task than the framing of the conventional covenants intended to bind lessor and lessee, where the sueaessors in title of the covenantee continue to retain an interest in the lands demised. It can sometimes be achieved by the formulation of what has come to be known as a building scheme.
I refer to the following passage from the judgment of Cozens-Hardy, MR, in the case of Reid .v. Bickerstaff, (1909) 2 Ch 305 at p. 319:
"What are some of the essentials of a building scheme? In my opinion there must be a defined area within which the scheme is operative. Reciprocity is the foundation of the idea of a scheme. A purchaser of one parcel cannot be subject to an implied obligation to purchasers of an undefined and unknown area. He must know both the extent of his burden and the extent of his benefit. Not only must the area be defined but the obligations to be imposed within that area must be defined .... A building scheme is not created by the mere fact that the owner of an estate sells it in lots and takes varying covenants from various purchasers. There must be notice to the various purchasers of what I may venture to call the local law imposed by the vendors upon a definite area. If on a sale of part of an estate the purchaser covenants with the vendor, his heirs and assigns, not to deal with the purchased property in a particular way, a subsequent purchaser of part of the estate does not take the benefit of the covenant unless (a) he is an express assignee of the covenant, as distinct from assignee of the land, or (b) the restrictive covenant is expressed to be for the benefit and protection of the particular parcel purchased by the subsequent purchaser .... Unless either (a) or (b) can be established, it remains for the vendor to enforce or abstain from
enforcing the restrictive covenant."
I adopt that passage as a correct statement of the legal principles applicable in the present case. As no evidence was put forward to suggest that Mr. and Mrs. Young were assignees of the covenant now sought to be enforced against the Defendants, and as the restrictive covenant in question was not expressed to be for the benefit and protection of the particular parcel of land of which Mr. and Mrs. Young, or one or other of them, now claim ownership, I would therefore hold that they are not entitled to enforce the provisions of the restrictive covenant in the Deed of Transfer to Hugh O'Reilly against his successors in title.
The first and second-named Plaintiffs, as covenantees, however, are joined in these proceedings. In their case would not be prepared to hold that the change of user of Unit 1 in a manner which contravened the provisions of the restrictive covenant has been shown to have come to their notice until they became involved in the dispute which has broken out between the respective present occupiers of the two business premises, and I do not consider that they are now estopped from invoking the terms of the covenant in question against the Defendants.
It has not been shown, however, that the said Plaintiffs have retained any material interest in the lands which has been damaged or jeopardised by the breach of covenant alleged against the Defendants. In the absence of any proof of damage suffered by these Plaintiffs, I would not be prepared to award relief by way of Injunction in their favour and while they may have a technical cause of action against the Defendants it would only entitle them to an award of nominal damages. On this basis I propose to make an award of £5 (IR) in favour of the first and second-named Plaintiffs against the third and fourth- named Defendants and no Order will be made in favour of the third or fourth-named Plaintiffs.
R.J. O'Hanlon.
17th June 1988
Counsel for the Plaintiffs:
Paul Butler BL (instructed by Paul N. Beausang & Co., Solicitors)
Counsel for the Defendants:-
John Gordon SC Bruce Antoniotti BL (instructed by Bowler Geraghty & Co., Solicitors)
Cases and Materials cited, or referred to in Judgment:
Shaw .v. Applegate (1978) 1 AER 123
Wylie, Land Law (1986 edn.) Par. 19.34
Green Property Co. Ltd. (McWilliam J., High Court, 30 Novr. 1978)
Reid .v. Bickerstaff (1909) 2 Ch 305.
DOC. 1777S JL.