Margerison v Bates & Anor

The claimant (“Mr Margerison”) has since 11 May 2007 been the owner of the freehold land known as Swaynes Jumps, Mill Lane, Willaston, Cheshire (“Swaynes Jumps”). Erected on Swaynes Jumps is a large flat roofed bungalow (“the Bungalow”). This dates, in all probability, from about 1966/1967. Swaynes Jumps itself is a substantial plot of land comprising (according to the Conveyance of 3 May 1966 to which I shall refer below) some 3,750 square yards.

Swaynes Jumps originally formed part of the garden of an adjoining freehold property then and now known as Priors Knock (“Priors Knock”). Erected on Priors Knock is a large dwelling house with generous gardens. Priors Knock has been owned by the defendants (“Mr and Mrs Bates”) since 1978.

In 1966 Swaynes Jumps and Priors Knock were in the common ownership of Jennie Fisher Horn (“Mrs Horn”). She conveyed away Swaynes Jumps by a Conveyance dated 3 May 1966 made between (1) herself and (2) Hugh Godfrey Badman (“the 1966 Conveyance”).

Mr Margerison now wishes to replace the flat roof on the Bungalow with a pitched roof. However, Mr and Mrs Bates object to this saying that, as the freehold owners of Priors Knock, they have the benefit of a restrictive covenant contained in sub-clause 2(c ) of the 1966 Conveyance which enables them to prevent the pitched roof being erected.

Sub-clause 2(c ) of the 1966 Conveyance was in the following terms:-

“(c ) Not to make any addition or enlargement or alteration to the said bungalow [i.e. the Bungalow] outbuildings and motor garage without plans having been first approved by the Vendor and her consent thereto signified in writing such consent not to be unreasonably withheld”.

The following issues arise for determination in these proceedings:-

I found Issue (3) to be easy of answer. In this I was greatly assisted by a site visit to the two properties which occurred on the morning of 2 April 2008. I was also greatly assisted at that site visit by the fact that Mr Margerison (and the Gregsons - whose relevance will become apparent below) had erected on the roof of the Bungalow – for my benefit – a mock-up of part of the pitched roof which it was desired to build. Much of the evidence, which I discuss below, goes only to Issue (3) but some, at least, forms part of the background factual matrix against which I must construe the provisions of the 1966 Conveyance. I will, therefore, discuss and analyse the evidence as a whole before turning to the specific Issues which I have identified.

Willaston is a village on the Wirral which contains many expensive and highly desirable houses. The specific area in which Swaynes Jumps and Priors Knock are situated is one of mature woodland and greenery. The impression is not of houses with trees and greenery for their gardens but, rather, of houses situated within long established areas of woodland and greenery.

It is clear to me from inspecting the insides of both Priors Knock and the Bungalow that each of Mr Margerison (and his girlfriend who lives with him at Swaynes Jumps) and Mr and Mrs Bates are intensely house proud and take pleasure in living in such an attractive location.

As to Priors Knock this is a detached villa type residence probably built in the late 1920’s. Even after the sale of Swaynes Jumps, Priors Knock was left with a very large garden indeed. Mr Bates, in paragraph 8 of his witness statement, described Priors Knock as “an imposing family residence surrounded by trees and is nicely secluded on all other sides by trees.” I would not quarrel with that description.

Mrs Horn lived at Priors Knock until her death on 20 December 1977. She had probably done so since Priors Knock was first erected. Mr and Mrs Bates purchased Priors Knock from Mrs Horn’s executor in 1978 and they have remained there ever since. They emphasise that it is their family home and have no intention whatsoever to leave or to sell. On their death they intend Priors Knock to remain within their family.

When Mr Badman acquired Swaynes Jumps from Mrs Horn by the 1966 Conveyance there was no building thereon. Swaynes Jumps was merely part of the garden of Priors Knock. By sub-clause 2(a) of the 1966 Conveyance Mr Badman covenanted with Mrs Horn:-

“(a)

Not to erect or build anything save one bungalow (of which the ridge height shall not exceed 20 feet) with suitable outbuildings and motor garage annexed attached or appurtenant thereto and to be occupied therewith upon the land hereby conveyed and not to use any such bungalow for any other purpose than as a private dwellinghouse or the professional residence of a medical practitioner or dentist. The said bungalow and buildings shall be erected only in accordance with plans and elevations to be first submitted to and approved by the Vendor in writing with a copy thereof for her retention and on such site as she shall first approve.”.

Mr Badman then erected the Bungalow. There is no evidence of the plans therefor, and the siting thereof, being approved by Mrs Horn but, equally, there no indication that they were not. The Bungalow is a substantial structure. It is approximately 98ft in length on the elevation facing Priors Knock. At one end there is a small protruding gable, again facing Priors Knock. Another larger gable faces away from Priors Knock. The Bungalow was built with a flat roof and built close to the boundary between Swaynes Jumps and Priors Knock. The distance from the Bungalow to the front elevations, and front door, of Priors Knock is (according to the Local Planning Authority) some 37.5 metres. There is presently in place a paling boundary fence between the two properties. That appears to be some 2 metres high and runs the whole length of the boundary. There is not much space between the Bungalow and that fence, especially at the gable end. However, various trees have been planted in the available space. The overall effect is to shield Priors Knock from seeing the bulk of the Bungalow from ground floor level. Rather what is primarily seen is the paling fence and the trees. Thus, from the two ground floor entertaining rooms of Priors Knock all that can be seen of the Bungalow is the tops of certain windows and the barge boards of the flat roof. However, from the first floor of Priors Knock there is a much clearer view of, and into, the Bungalow. This, in turn, has caused Mr Margerison effectively to reverse the outlook of the Bungalow so that its internal rooms look out over the lawns and not backwards towards Priors Knock.

One point which has been made on behalf of Mr Margerison is that sub-clause 2(a) of the 1966 Conveyance allowed for the building of one bungalow of a ridge height no greater than 20 feet. Therefore, it is said, as the overall height of the Bungalow with the intended pitched roof will be less than 20 feet Mr and Mrs Bates cannot reasonably withhold consent under sub-clause 2(c ) to the erection of the pitched roof. That contention seems to me to be overly simplistic. Mrs Horn had the right under sub-clause 2(a) to approve the site for the new bungalow. Had Mr Badman built a bungalow with a ridge height of 20 feet Mrs Horn may well have wanted the same to have been sited far further into Swaynes Jumps and, hence, far further away from her boundary. The siting of the Bungalow so close to the boundary with Priors Knock could well have been authorised by Mrs Horn only because the Bungalow would have a flat roof. Without knowing what exactly passed between Mr Badman and Mrs Horn no definitive view can be expressed save to say that it cannot be said that it would be necessarily unreasonable (under sub-clause 2(c)) to object to a pitched roof giving an overall height of less than 20 feet.

Swaynes Jumps passed through the hands of various owners until it was acquired by Mr Haydn Gregson and his brother (“the Gregsons”) on 5 December 2003. Clearly their intention was to improve and renovate the Bungalow and then sell Swaynes Jumps, hopefully at a profit. Initially they did not intend to replace the flat roof but that plan subsequently changed (perhaps because the flat roof was putting off prospective purchasers or deflating the available price). They made application to the local planning authority (Ellesmere Port and Neston Borough Council (“the Council”)) for planning permission to erect a pitched roof. Mr and Mrs Bates objected claiming, even at that early stage, that the pitched roof would result in a development that was unduly prominent and would have an adverse impact on their visual amenity. It is clear from the Minutes of the relevant Council meeting that the issue was very carefully considered by the Council. Planning Permission for the proposed pitched roof was granted on 16 June 2005 on the basis that the proposed pitched roof involved a maximum increase in roof height of 2.25 metres. The maximum height of the Bungalow with the new roof would be 5.4 metres but, as the ground sloped slightly, the maximum height overlooking Priors Knock would be 4.4 metres. The Council noted that Swaynes Jumps was well screened by trees and landscaping. It noted that the boundary with Priors Knock consisted of approximately 2 metre high fencing with some screening from trees. It noted that Swaynes Jumps was set back from the boundary with Priors Knock by 6.1 metres (that must, I think, be the major part of the Bungalow and not the distance from the small gable end to the boundary) but that there was a distance of 37.5 metres between the front elevations of both properties. It noted that there were a number of trees which offered screening. It considered that the proposed new roof would improve the appearance of the Bungalow. The proposed pitched roof was not considered to be overly intrusive on neighbouring properties. The pitched roof was considered to be in keeping with the character of the area. However, the following conditions were imposed on the grant of planning permission:-

Following the grant of planning permission, correspondence quickly ensued between the solicitors for Mr and Mrs Bates and for the Gregsons. This was in the context of the pitched roof for which planning permission had been granted. Consent for erection of the proposed pitched roof was sought and refused. The initial reasons given in Mr and Mrs Bates’ solicitors’ letter of 21 October 2005 were that the proposed pitched roof would be detrimental to them both in terms of visual amenity and from its potential affect upon the marketability of Priors Knock. By letter of 19 January 2006 Mr and Mrs Bates’ solicitor repeated this view. However, by letter of 15 March 2006 Mr and Mrs Bates’ objections to the proposed pitched roof were identified as being merely visual amenity. There was no reason, their solicitors wrote, why Mr and Mrs Bates’ view from their property and their amenity and enjoyment of their own property should be so seriously impeded by the erection of the pitched roof. As to marketability, Priors Knock was said to be intended as Mr and Mrs Bates’ home for life and to be passed on, thereafter, to their family. Hence the issue of marketability was irrelevant and Mr and Mrs Bates’ focus was purely on visual amenity.

The present proceedings were commenced by Part 8 Claim Form issued on 21 December 2006. The claimants were the Gregsons. The Gregsons sought declaratory relief under section 84(2) of the Law of Property Act 1925. Following the sale of Swaynes Jumps to Mr Margerison he was substituted as claimant in place of the Gregsons. There was some cross-examination at trial as to precisely what arrangements had been entered into between the Gregsons and Mr Margerison as to terms of sale, erection of the proposed pitched roof and costs. None of this mattered. Mr Margerison says, and I accept, that he would prefer, for perfectly good reasons, to see a pitched roof on the Bungalow. That is a perfectly genuine view. Whether that results in benefit or not for the Gregsons is irrelevant.

The planning permission conditions protect Mr and Mrs Bates to a degree and, to that extent, address certain of their concerns over the roof. Two of those concerns are that in the future windows or skylights could be placed in the roof or that the roof could be used for habitable accommodation. There are clear answers to these points. First, the pitch of the proposed roof is such (30 degrees) and the internal height such (1.9 metres) that the roof space could not be utilised in any meaningful way for living accommodation. Secondly, the planning permission conditions presently prevent windows or occupation. Thirdly, if Mr and Mrs Bates do, indeed, have the benefit of sub-clause 2(c ) then they could object to the alteration of the pitched roof to incorporate windows therein. As to roof coverings, Mr Margerison and the Gregsons (who it appears likely will build the pitched roof for Mr Margerison) are content to use whatever materials Mr and Mrs Bates choose. Mr Bates has indicated that if the roof be built Westmoreland green tiles would be acceptable.

There was considerable cross examination of Mr Haydn Gregson at trial as to precisely what were the present plans for the proposed pitched roof. Mr Margerison did not appear to have any detailed grasp of the proposed new roof, he simply understanding in broad general outline what was intended and, no doubt, expecting the Gregsons to build it. I suspect that the purpose of this cross-examination was to show that there were now disparities between what would be built and what was authorised by the planning permission so that, thereafter, the point could be made that consent had never been sought for what was now intended. I did not find this cross-examination helpful. It seemed to me that both Mr Haydn Gregson and Mr Margerison were anxious to accommodate Mr and Mrs Bates’ concerns so long as they were, indeed, able to build a substantial pitched roof. So Mr Haydn Gregson was, in my clear view, starting from what was authorised by the planning permission and contemplating making alterations thereto for the benefit of Mr and Mrs Bates (e.g. by reducing the angle of pitch). Mr Margerison, and the Gregsons, should not be made subject to some technical disadvantage because, following the grant of planning permission, they have now come up with ideas for a structure which might, in their view, be less unacceptable to Mr and Mrs Bates than the pitched roof as authorised by the planning permission. The mock-up roof which I saw (which ran the length of some six trusses) was, as I understand the position, the roof as authorised by the planning permission and which had a pitch of 30 degrees. This gave the Bungalow (where it faced Priors Knock) a total external height of some 14 foot 5 inches.

For a summary of the modern approach to issues of construction I start with what Lord Bingham of Cornhill had to say in BCCI –v- Ali [2002] 1 AC 251 at para 8 (page 259):

“In construing this provision, as any other contractual provision, the object of the court is to give effect to what the contracting parties intended. To ascertain the intention of the parties the court reads the terms of the contract as a whole, giving the words used their natural and ordinary meaning in the context of the agreement, the parties’ relationship and all the relevant facts surrounding the transaction so far as known to the parties. To ascertain the parties’ intentions the court does not of course enquire into the parties’ subjective states of mind but makes an objective judgment based on the materials already identified. The general principles summarised by Lord Hoffmann in Investors Compensation Scheme Limited –v- West Bromwich Building Society [1998] 1 WLR 896, 912 – 913 apply in a case such as this”.

Lord Hoffman in West Bromwich (at 913C) emphasised that the meaning which a document would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to chose between the possible meanings of ambiguous words but even to conclude that the parties must, for whatever reason, have used the wrong words or syntax. Whilst (913D) we do not easily accept that people have made linguistic mistakes, particularly in formal documents, nevertheless if one would conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Hoffmann then quoted, with approval, the words of Lord Diplock in Antaios Compania Naviera S.A. –v- Salen Rederierna A.B. [1985] A.C. 191 at 201:

“if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense”.

I also note what Longmore L.J. had to say in Absalom –v- TCRU Limited [2006] 2 Lloyd’s Law Reports 129 at 131 (paragraph 7). He emphasised various key principles to be derived from the authorities in particular:-

A detailed semantic and syntactical analysis of the various formulations of the principles of construction as used in the various authorities is unlikely to assist. Thus, on a detailed semantic and syntactical analysis of what Longmore L.J. had to say in Absalom it might, perhaps, be suggested that there is a degree of tension between what Longmore L.J. had to say and what Lord Diplock had to say. Longmore L.J. pointed out that a commercial document had to be interpreted so as to make business common sense in its context whereas Lord Diplock referred to a conclusion that would “flout” business common sense. An interpretation in accordance with business common sense may not be, perhaps, entirely the same concept as identifying a conclusion which flouts business common sense. The former approach could be a purposive one – the latter merely a reactive one. But the basic position is clear. If it is accepted (as is the case) that the court’s role is to ascertain the true meaning of the language used (in the sense of ascertaining what the language used would signify to a properly informed observer in the context of the document and its obvious purpose read against the relevant background factual matrix), then approaching the question with a perception of business common sense (as that would appear to a properly informed observer) will cause any tensions to fall away.

I make these points because I have had to consider carefully something which Jacob L.J. had to say in paragraph 8 of his judgment (with which the other members of the Court of Appeal agreed) in City Inn (Jersey) Limited –v- Ten Trinity Square Limited [2008] EWCA Civ 156. City Inn was a case which raised an issue identical to Issue (1) in this case, but which had different facts. Jacob L.J. said:-

“8.

It is obviously a strong thing to say that where a draftsman has actually defined a term for the purposes of his document that in some places (but not others) where he uses his chosen term he must have intended some other meaning. It is not impossible however. If, approaching the document through the eyes of the intended sort of reader (here a conveyancer), the court concludes that notwithstanding his chosen definition the draftsman just must have meant something else by the use of the term, it will so construe a document”.

This part of what Jacob L.J. had to say seems to me to emphasise the great caution which needs to be applied if, in a professionally prepared document such as a conveyance, a specified defined term is to be given, on certain occasions, a meaning other than the one contained within its definition. But Jacob L.J. then went on to say this:-

“Such a conclusion will only be reached where if the term is given its defined meaning the result would be absurd, given the factual background, known to both parties, in which the document was prepared. Nothing less than absurdity will do – it is not enough that one conclusion makes better commercial sense than another”.

These latter words have caused me to pause long and hard (because, as will be seen, I cannot reach the conclusion that it would be “absurd” for the only person who could give consent under sub-clause 2(c ) to be Mrs Horn alone). The words used by Jacob L.J. are strong ones and, clearly, I am bound by any relevant point of law which the Court of Appeal decided in City Inn. Granted the fact that present case involves the use of a “definition” (namely that of “the Vendor” as being Mrs Horn only) in a professionally prepared document ought I to do no more than to ask the question whether applying that “definition” according to its terms creates commercial absurdity? Am I precluded from going further and seeking to construe the 1966 Conveyance as a whole (which might well involve giving the “definition” a differential meaning (without finding commercial absurdity) in the application of that “definition” to various individual provisions in the 1966 Conveyance)?

However, as with documents, judgments have to be construed as a whole and I am entitled to analyse the decision of the Court of Appeal in City Inn to determine, for myself, what was actually decided as a point of law. I note, in particular, that Jacob L.J. went on to construe the relevant Transfer. He did not confine himself, solely, to issues of commercial absurdity. Ultimately (paragraph 31) Jacob L.J. addressed the rival contentions as to “commercial sense”. Indeed, he pointed out that the submissions (on commercial sense) as to why the definition should not be applied according to its express terms had caused him to “pause long and hard”. Taking the judgment as a whole, I see Jacob L.J. doing nothing more than construing the relevant Transfer in accordance with the principles I have identified above, albeit against the background that strong and cogent reasons must be advanced as to why a definition in a professionally prepared document should be departed from or given in different places alternative meanings. I do not see Jacob L.J. establishing any point of law to the effect that only commercial absurdity would suffice for departure, as a question of construction, from a specific definition. I am fortified in reaching this conclusion not merely by the terms of Jacob L.J.’s judgment as a whole but, also, from the whole basis of the approach to issues of construction as identified by Lord Hoffmann in West Bromwich (at 912G) where he indicated that, under the modern approach, “Almost all the old intellectual baggage of “legal” interpretation has been discarded”. The modern approach to construction involves an interpretation of meaning applying the principles I have identified above, not an approach which is governed in respect of specific issues or instances by fixed rules of law.

There is one further point I should make on the question of construction. Nothing in what I have said above entitles the court to re-make the parties’ contract for them (or to re-make the parties’ contract on the basis of what the court thinks a properly informed observer would say was the contract the parties ought to have entered into). The present is an easy case in which to fall into this particular trap. I must only construe the contract which the parties actually entered into, not the one I might have hoped they would have entered into.

The 1966 Conveyance commences by identifying Mrs Horn by her full name and address. She is then said to said to be “hereinafter called “the Vendor””. The time-hallowed expression:-

“….which expression shall, where the context permits, include her successors in title”

is not utilised. Whilst Mr Badman is, also, described as “the Purchaser” without any reference either to his successors in title, it is quite clear that the draftsman was more than well aware of the distinction between Mrs Horn and Mr Badman personally on the one hand and their successors in title on the other. Thus, in clause 2, Mr Badman covenants expressly “for himself and the person [sic] deriving title under him” and the covenants are given by Mr Badman “with the Vendor her heirs and assigns and so as to benefit and protect the adjoining property of the Vendor”. The covenants are expressly stated not to bind Mr Badman “or his successors in title” after disposing of their interest in Swaynes Jumps. It is crystal clear, therefore, that prima facie “the Vendor” on every occasion where these words appear in the 1966 Conveyance means Mrs Horn and Mrs Horn alone.

I have engaged in the exercise which Jacob L.J. undertook in City Inn and studied the 1966 Conveyance (other than at this stage clause 2 thereof) to see whether at any point therein the draftsman may have used the phrase “the Vendor”, in the relevant context, to mean “the Vendor and her successors in title”. Analysing the 1966 Conveyance (other than clause 2) nowhere is there any imperative or necessity (to make common sense of the various provisions) to construe “the Vendor” as “the Vendor and her successors in title”. On the contrary, in sub-clause 3(a) (an indemnity covenant given by Mr Badman in respect of certain earlier restrictive covenants binding Swaynes Jumps) the draftsman provides that Mr Badman’s covenant is “to keep the Vendor and her estate and effects” fully indemnified. Even more importantly, in sub-clause 3(b) Mr Badman covenants as follows:-

“To pay to the Vendor or her successors in title one half of her two third portion for which she is liable by way of contribution to the expense of maintenance and upkeep of [a common driveway] when and so soon as the Vendor or her successors in title shall give him notice that she or they have received an assessment of the amount of such contribution”.

(The underlining is mine).

So, here, there is an express reference to “successors in title” and, further, the draftsman uses the words “she or they” after his reference to the Vendor or her successors in title. Further, clause 4 of the 1966 Conveyance is a provision against acquisition of rights of light or air or other quasi-easements:-

“which would restrict or interfere with the free use of the adjoining property of the Vendor or any part of the same by the Vendor or any persons deriving title under her for any purposes whatsoever”.

(Again the underlining is mine).

Quite clearly, therefore, the draftsman intended “the Vendor” to be Mrs Horn alone and where he thought he should refer to her “successors in title” he did so expressly.

I turn, now, to clause 2. The two relevant restrictive covenants are contained in sub-clauses 2(a) and 2(c ) which I have set out above. Sub-clause 2(b) was an absolute prohibition against certain temporary buildings or structures. Sub-clause 2(d) was an absolute prohibition against certain hoardings etc and sub-clause 2(f) was an absolute prohibition against obstructing the communal driveway. None of these sub-clauses refer to “the Vendor”. However, sub-clause 2(e) is of some passing relevance and it provided as follows:-

“(e)

Not to do or carry on on the property hereby conveyed or in any erection or building at any time standing or being thereon anything which shall cause annoyance or be prejudicial to the Vendor or the owner or occupiers of any of the adjoining or neighbouring property”.

Clause 2 opens with the following words

“THE Purchaser for himself and the person [sic] deriving title under him and to the intent and so as to bind not only himself personally but also so far as practicable all persons claiming title under him and to bind the property hereby conveyed into whosesoever hands the same may come HEREBY COVENANTS with the Vendor her heirs and assigns and so as to benefit and protect the adjoining property of the Vendor but not so as to bind the Purchaser or his successors in title after he or they should have disposed of all his or their estate or interest therein….”.

It is self evident to me, in the context of construing the 1966 Conveyance as a whole, that where reference is made in sub-clause 2(c ) to approval of plans “by the Vendor” this means Mrs Horn, and Mrs Horn alone. I have already identified how the draftsman of the 1966 Conveyance could, where he wished to do so, refer to Mrs Horn’s successors in title and it is not wholly insignificant that the reference in sub-clause 2(c ) is to “her” consent. Indeed, Mr Newsom (who appears for Mr and Mrs Bates) accepts that this it the strict literal interpretation of the words contained in sub-clause 2(c ).

However, Mr Newsom urges me to go on and to construe sub-clause 2(c ) by including Mrs Horn’s successors in title to Priors Knock within the definition of those who can approve the plans. Mr Newsom’s submission is, I think, that this is a matter of construction, although he may fall back on the implication of a term. As to implication (in the sense of implication of a term) I am conscious of what Lord Steyn had to say in Equitable Life Assurance Society –v- Hyman [2002] 1 AC 408 at 458G. Lord Steyn drew a clear distinction between the process of contractual interpretation and the process of implication. The legal test for implication is one of “strict necessity” (459D).

At the heart of Mr Newsom’s submissions is what he says are the commercial realities of the situation. Mr Badman was being sold a vacant plot of garden land and paying a substantial sum of money therefor on the basis that he would be able to build a bungalow thereon. Restrictive covenants were being given which, ex hypothesi, could bind Mr Margerison only because they fulfilled the equitable requirements for being restrictive covenants (in particular on the facts of this case because they “touched and concerned” Priors Knock). The commercial reality was, Mr Newsom says, that those restrictive covenants should be enforceable by the owners for the time being of Priors Knock. Mrs Horn was bound to die one day, and it would seem that she was probably already elderly. She might move away, to a distant part of the country. She might become untraceable. She might, perhaps, lose the mental capacity to give consent at all. And what interest would she have in giving consent after she had parted with all interest in Priors Knock? Why should additions or alterations to the Bungalow affect her at all in these circumstances? Why should her consent (as opposed to that of her successors in little) be required at all? Mr Newsom says that the commercial realities strongly suggest, indeed I think Mr Newsom would say dictate, that consent should be sought from the owners from time to time of Priors Knock. And although sub-clause 2(a) is no longer in issue, Mr Newsom says, with force, that the phrase “the Vendor” in that sub-clause must bear the same meaning as in sub-clause 2(c). What if the only person who could approve the plans for the first erection of the Bungalow were Mrs Horn and she were to have died immediately after the 1966 Conveyance. Would that mean that the Bungalow could not have been built at all? (This latter submission depends, however, on Mr Newsom’s submission on Issue (2) namely that if Issue (1) be decided against Mr and Mrs Bates then the restrictive covenants become absolute and are not discharged. If the only person who can give consent is Mrs Horn and the restrictive covenants are effectively discharged following her death then some of the force comes out of this particular submission). Mr Newsom also points out that the effect of construing sub-clause 2(c) so that the only person who can given consent is Mrs Horn is to create, granted Mrs Horn’s death, the unfortunate situation whereby either the restrictive covenants contained in sub-clause 2(c) have become absolute or are effectively discharged.

There is considerable force in these submissions and I confess that I was, initially, much attracted by them. But to accede to these submissions would, in my view, be to do clear violence to the wording of the 1966 Conveyance, taken as a whole. It is crystal clear that the draftsman knew exactly the limitations contained within his use of the definition “the Vendor” and that he could, and did, refer to Mrs Horn’s successors in title where he thought it appropriate to do so. Nor can it be said that to confine the only person able to give consent under sub-clause 2(c ) to Mrs Horn amounts to commercial absurdity. Mrs Horn may have been interested only in what occurred on Swaynes Jumps during her lifetime, or during the period when she remained in occupation of Priors Knock (as it happens her Grant of Probate indicates that she remained living at Priors Knock until her death). If she moved from Priors Knock she might have been prepared to give, or refuse, her consent in accordance with what she thought were the best interests of her successors in title. The situation whereby consent is to be given by a person who no longer retains any interest in the benefitting land is not a wholly unknown phenomenon. Nor is it without commercial purpose. It prevents, for example, a multiplicity of consents being required in the event of a sub-sale of various parts of the benefitting land (and the retained garden to Priors Knock was certainly large enough to support at least one further house). The underlying logic of the decision of Neuberger J in Crest Nicholson (see below) is that it is quite possible to envisage circumstances in which consent for the doing of acts which would otherwise be prohibited as a breach of restrictive covenant can remain vested in the original covenenatee (see, in particular, paragraphs 42 to 46 of his judgment). And, of course, City Inn was just such a case, although its facts were substantially different from those of the present. It might be said that by confining the person who can give consent to herself Mrs Horn was, potentially, devaluing Priors Knock (in the sense that the practical benefit of giving or refusing consent would not pass to her successors in title). But she may have had no concern over that (for all I know she may have had no one to leave her money to apart from charity). She may, having apparently lived in Priors Knock for some 30 or more years, have been concerned, entirely, only with what happened during her continued occupation of Priors Knock and not with what would happen after her death. For all I know she could have obtained a larger price for Swaynes Jumps from Mr Badman for the very reason that the only person who could give consent was herself. In this context, I refer to sub-clause 2(e). Again “the Vendor” must have the same meaning as in sub-clauses 2(a) and 2(c ). It is, perhaps, somewhat surprising that the covenant against annoyance should relate only to activities prejudicial to Mrs Horn alone but, again, on this analysis that is not necessarily commercially absurd. (I should, perhaps, add that no suggestion has been made to me that Mr and Mrs Bates could seek to prevent erection of the pitched roof by qualifying as “owner or occupiers of any of the adjoining or neighbouring property” under sub-clause 2(e)).

On analysis of the conflict of commercial realities and merits between (a) confining the person who can give consent under sub-clause 2(c ) to Mrs Horn and (b) extending it to her successors in title to Priors Knock, my clear view would be that the greater commercial merits and realities lay in extending the definition of the person who could give consent. But that is not the point. It is not for me, or the reasonable observer, to re-write the contract that parties actually made into one which I, or the reasonable observer, think they ought to have made.

Put simply, therefore, the terms of the 1966 Conveyance are clear and even applying “business common sense” this would not mandate a construction contrary to the express words used in the 1966 Conveyance. It makes sufficient common sense (albeit perhaps not necessarily the greatest common sense) for Mrs Horn to be the only person who can give consent. Certainly, such an analysis is not “absurd” nor one which necessarily flouts business common sense.

It might be suggested that the draftsman of the 1966 Conveyance has made some mistake in confining his definition of “the Vendor” in the way in which he did. But, for the reasons I have already given, the draftsman clearly knew what he was doing in so confining his definition of the “the Vendor”. So there, at least, there is no mistake. The mistake, if it existed, would have to be a deeper conceptual one – and one which it is difficult to articulate. Presumably it would be suggested that, somehow, the draftsman did not appreciate that the only person who could give consent following onward sale of Priors Knock was Mrs Horn. But it is very difficult to see how the draftsman even made a conceptual mistake of this nature granted his ability in the 1966 Conveyance to refer to “successors in title” wherever he thought it appropriate.

Mr Newsom draws my attention, in support of his submissions, to the decision of Hart J in Mahon –v- Sims [2005] 3 EGLR 67. This was an appeal from Her Honour Judge Kirkham sitting in the Birmingham County Court. But Mahon had a fundamental difference from the present case. In Mahon there was no reference, whatsoever, to successors in title (or heirs and assigns) in the covenant itself. It was this, when combined with section 78 of the Law Property Act 1925, which opened up the way for Her Honour Judge Kirkham and Hart J to adopt a construction which allowed the words “successors in title” to be implied after the words “the Transferors” wherever they appeared in the same covenant. In effect, the Judges were saying in that case that because, in the opening words of the covenant itself, the words “and their successors in title” were to be implied under section 78 after the words “the Transferors” then it was possible to construe the words “the Transferors” later in the same clause as also referring to “the Transferors and their successors in title”. As in City Inn such a gateway to construction is not available in the present case because the 1966 Conveyance clearly distinguishes between “the Vendor” and “her successors in title” and because the covenant in this case is made with “the Vendor her heirs and assigns”. But only “the Vendor” is referred to in sub-clause 2(c).

It is true that, in paragraph 12 of his judgment, Hart J regarded the initial definition of “the Transferors” as being not, in itself, a defined expression to any greater extent than a term used by the Transfer to describe the vendors personally. And as well as relying upon section 78 of the Law Property Act 1925 Hart J regarded the use of express words of annexation as making it clear (to the legally informed reader) that the benefit of the covenant was intended to run with the retained land. These facts made it possible, in Mahon, to read the relevant reference to “the Transferors” (i.e. in the context of who could give consent) as, also, including successors in title. And if that were a possible reading, it appeared to Hart J to be one that made far better sense of the covenant than the literal meaning.

As to annexation, the Court of Appeal re-emphasised in Crest Nicholson Residential (South) Limited –v- McAllister [2004] 2 P & CR 486 the necessity, as identified in Marquess of Zetland –v- Driver [1939] Ch.1, for a covenant, if it is to be enforceable as a restrictive covenant, to (inter alia) “touch and concern” the land – by which is meant that it must be imposed for the benefit of or to enhance the value of land retained by the vendor (see per Chadwick L.J. at paragraph 32). But a covenant can still “touch and concern” land if consent is to be given by a third party. At bare minimum, that third party will not be able to act arbitrarily or capriciously in refusing consent and a refusal for reasons which bear no relationship, whatsoever, to the benefitted land must, of necessity, be arbitrary or capricious. And the benefit of the covenants in question in this case had to be annexed to Priors Knock so that they could be enforced, in equity, against successors in title of Mr Badman to Swaynes Jumps (even if the only person who could give consent were Mrs Horn). So the fact of annexation is not, to my mind, conclusive in any way and the reasoning which found favour with Her Honour Kirkham and Hart J in Mahon cannot govern in respect of the 1966 Conveyance, granted its express terms as analysed above.

Mr Jackson, naturally, relied upon the decisions of Mr Steinfeld Q.C. at first instance (2007 EWHC 1829 (Ch.)) and of the Court of Appeal in City Inn. Obviously, on its facts, that case was different from the present in that there was a strong commercial imperative or justification for the Port of London Authority to retain the giving of consent to itself, in that the Port of London Authority seemed as permanent as the nearby Tower of London (Jacob L.J. at paragraph 31) and in that one of the relevant covenants expressly referred to the “Estate Officer” for the time being of “the Transferor”. I have already dealt with the major points of principle which arise from City Inn. I would perhaps, only add what Jacob L.J. had to say in paragraph 31. It is not always the case that in construing a document the court must assume that the parties have thought of every “what if?”. Here, it is quite possible that Mrs Horn was concerned only with giving consent herself and neither she nor Mr Badman directed their minds to the “what if” which would arise when she died or became untraceable.

So far I have dealt with Mr Newsom’s submissions on the basis of contractual interpretation. To the extent that he may rely upon the implication of a term then it seems to me that there are no grounds whatsoever for any such implication if only because:-

On Issue (1) my view on the true construction of the 1966 Conveyance is that, under sub-clause (2)(c), the plans have to be and can be approved by Mrs Horn and Mrs Horn alone.

In these circumstances, Mr Jackson on behalf of Mr Margerison contends that the restrictions contained in sub-clause 2(c ) of the 1966 Conveyance have, effectively, been discharged (Mrs Horn being dead and no longer able to give consent). Mr Newsom on behalf of Mr and Mrs Bates contends that as the dispensing power conferred upon Mrs Horn by sub-clause 2(c ) cannot now be exercised then the restrictions contained in sub-clause 2(c ) have become absolute.

Mr Newsom’s submissions accord with what was once undoubtedly perceived to be the position. Thus, in Bell –v- Norman C. Ashton Limited (1956) 7 P & CR 359, Harman J held that where the only persons who could consent were the original vendors and they had ceased to be available, there was no dispensing power and, hence, the covenant was absolute. A similar conclusion was reached in Briggs –v- McCusker [1996] 2 EGLR 197 albeit that Judge Rich Q.C., sitting as a Judge of the High Court, seems to have considered himself bound by the reasoning of the earlier decision of the Court of Appeal in Re Beechwood Homes Limited’s Application [1994] 2 EGLR 178. However, it is perhaps worthy of note that in Re Beechwood Dillon L.J. said (at 179M-180B) that the case had proceeded below in the Lands Tribunal and had, therefore, to proceed in the Court of Appeal on the common basis that the power to consent was a dispensing power attached to another otherwise absolute prohibition.

The issue was considered again by Neuberger J in Crest Nicholson [2003] 1 E.G.L.R. 165. The matter went to the Court of Appeal on a point which had not been argued before Neuberger J but the Court of Appeal added, albeit not as part of its decision, that it saw no reason to differ from the conclusions reached by Neuberger J on the issues which he had decided. As Chadwick L.J. (with whom Arden L.J. and Auld L.J. agreed) said at paragraph 53, he thought that Neuberger J was right and for the reasons which he had given.

The essential point being made by Neuberger J in Crest Nicholson was that the issue absolute/effectively discharged was a question which did not depend on rules of law contained in the authorities but rather was a matter of construction or, perhaps, a matter as to whether a term should be implied. Of these two differing approaches, Neuberger J favoured the former (paragraph 54). I do, however, note that Neuberger J was satisfied that if an implied term were required then the five tests identified by Lord Simon were, on the facts of that case, satisfied.

Neuberger J held, in Crest Nicholson, that the restrictive covenants had been effectively discharged through the disappearance of the only persons who could give consent. I reach an identical conclusion on the facts of the present case and, broadly, for the same reasons as those identified by Neuberger J – albeit applying those reasons to the specific facts of this particular case. To summarise:-

To my mind the answer to Issue (2) is a question of construction of the 1966 Conveyance, not a question of implication of a term. For my part, I would have doubted, had the Court of Appeal not approved what Neuberger J had said, that it would be appropriate to imply a term to effect discharge of the relevant restrictions. However, I need say no more on this point because I am content to reach my conclusion as a matter of construction of the 1966 Conveyance, an approach which must be open to me granted the approval by the Court of Appeal of that part of Neuberger J’s approach in Crest Nicholson which directed itself to construction.

In my judgment, the restrictions contained in sub-clause 2(c ) were discharged on the death of Mrs Horn. Mr Margerison is not subject to any absolute prohibition against making additions, enlargements or alterations to the Bungalow.

I should, however, add something about the effect of my judgment on the restrictions contained in sub-clause 2(a). The requirements for plans and elevations to be approved by Mrs Horn and for her to approve the site on which the Bungalow was to be erected are contained in a separate sentence. Those requirements have, clearly, been effectively discharged by the death of Mrs Horn (in accordance with my reasoning set out above). But I do not think that the effect of the death of Mrs Horn is, on the true construction of sub-clause 2(a), to discharge the remainder of the restrictions contained in sub-clause 2(a). Thus the restriction against erecting or building anything save one bungalow, with a ridge height not exceeding 20 feet, with suitable outbuildings and motor garage annexed thereto, and the restriction against using any such bungalow for any purpose other than as a private dwellinghouse or the professional residence of a medical practitioner or dentist continue. I have not heard any submissions as to the true meaning and effect of sub-clause 2(a). Self-evidently the user restriction must continue. What has not been addressed before me, and hence what I express no view upon, is whether the restriction against building anything save one bungalow with a ridge height not exceeding 20 foot was spent when the Bungalow was, itself, built or whether those restrictions continue. I can see that issues could arise as to whether the Bungalow could or could not be replaced by another bungalow in a different location.

Granted my conclusions on Issues (1) and (2), this Issue does not arise for decision. However, I think I should express my views thereon lest a different view be taken, subsequently, on Issues (1) and (2).

I can address Issue (3) relatively briefly, partly because I have set the facts out in detail in the earlier part of this judgment but primarily because the answer thereto is, to my mind, crystal clear.

Sub-clause 2(c ) requires “plans” to be submitted to and approved by (on this hypothesis) Mr and Mrs Bates and for their consent to be in writing. I am not entirely sure that sub-clause 2(c) was ever properly triggered in the sense that the parties appear to have corresponded about the proposed pitched roof without the Gregsons or Mr Margerison actually submitting specific plans for approval. Perhaps this was because Mr and Mrs Bates had made clear, at the earliest opportunity, their implacable opposition to the pitched roof for which planning permission had been sought. Most sensibly, no technical point on this was ultimately taken by either party before me and I shall proceed upon the basis that consent had been validly sought by the Gregsons and Mr Margerison under sub-clause 2(c ) for the mock-up roof which I saw on site and that such consent had been refused.

Mr and Mrs Bates were not entitled to refuse their consent unreasonably. Now, were this a matter of reasonability generally, balancing the interests of Mr Margerison as freehold owner of Swaynes Jumps against the interests of Mr and Mrs Bates as freehold owners of Priors Knock, and taking into account the nature of the locality generally but ignoring the existence of the restrictive covenant, I might have been inclined to the view that Mr and Mrs Bates were acting unreasonably in withholding their consent. Whilst, undoubtedly, the intended pitched roof would have adversely affected Mr and Mrs Bates’ visual amenity, there was nothing unreasonable in Mr Margerison wishing to replace a problematic flat roof with a pitched roof (which would be in keeping with other houses in the area). It seems to me that the Council, on this analysis, got matters exactly right when considering whether, or not, to grant planning permission.

But this is not the correct approach to the problem. It overlooks entirely that, on this hypothesis, Mr and Mrs Bates have the benefit, as a proprietary right, of the restrictions contained in sub-clause 2(c ). They are, therefore, entitled to look at this issue through the prism of their own property rights under the restrictive covenant. They are not obliged to take into account wider considerations relating to the locality or the reasonableness of Mr Margerison wishing to have a pitched roof on his property. They are entitled to say that the very purpose of the restrictive covenant is to give them, as freehold owners of Priors Knock, rights superior to those conferred by planning control.

It was, no doubt, for reasons such as this that Mr Jackson, on behalf of Mr Margerison, very fairly and properly conceded that the test which I should apply is that as set out by Hart J in Mahon. At paragraph 29 Hart J. said this:-

“In the present context, I do not think that it does make any practical difference whether the implied proviso is expressed as “not to be arbitrarily or capriciously withheld” or as “not to be unreasonably withheld.

If the implied proviso takes the latter form, it is important to bear in mind that this does not have the consequence that the court can, at the invitation of the covenantor, simply substitute its judgment as to what is reasonable for that of the covenantee. All the proviso means is that refusal of approval will be unreasonable if the court is satisfied that no reasonable covenentee would have refused approval in the circumstances. It is clear that the protection of the sensibilities of the covenantee is one of the purposes of the covenant in this case. The test, which the implied proviso requires in a context such as the present, is one that pays full respect to those sensibilities so far as any particular proposal is concerned. It will be only if satisfied that no reasonable neighbour could object to the proposal that the court will be justified in overriding a decision by the covenantee to refuse approval. If the refusal was on a subjective ground, upon which the opinions of reasonable neighbours might differ, that will, in a context such as the present, be reasonable ground enough. In my judgment, the application of such a test will not therefore deprive the covenantee of what the judge described as the ability “to exercise firm control over any building”. It will however prevent it from acting arbitrarily or capriciously or from improper motives”.

This test clearly indicates that a person with the benefit of a restrictive covenant is entitled, when deciding whether or not to grant consent, to look at matters through the prism of his own self-interest (so far as that self-interest relates to the use and enjoyment of the benefitting land). Only if no reasonable covenantee would have refused approval can the court intervene. The court is not to impose its own view for that of the covenantee and must recognise that where subjective issues are involved then again the covenantee is entitled to his subjective views.

I have viewed the mock-up roof from the ground floor entertaining rooms of Priors Knock. It is self evident to me that the pitched roof, if built, will occupy a space which is presently open air and which presently gives Mr and Mrs Bates a distant view of certain trees (some of which, at least it was conceded were subject to tree preservation orders). Mr and Mrs Bates say that they like their present view, that they like the Bungalow at its present height and that they like the open air above the flat roof and the view of trees in the distance beyond it. That open air will be filled, if the pitched roof is built, by a structure which will, undoubtedly, make the Bungalow considerably more visible and intrusive from their ground floor entertaining rooms. Granted the dimensions I identified earlier, the pitched roof will be a substantial structure and Mr and Mrs Bates say they do not want it. It will adversely affect, they say, their visual amenity. That seems to me to be a perfectly reasonable view and, from the beginning, Mr and Mrs Bates have objected to the erection of the pitched roof on the grounds of their visual amenity. Having seen the site, and the mock-up of the pitched roof, I most certainly cannot say that no reasonable covenantee would have refused approval on visual amenity grounds to the pitched roof. Indeed, I can go further and say that had I been the freehold owner of Priors Knock and had I looked at this issue through the prism of my own self interest as such owner, I too might well have objected to the erection of the pitched roof. In saying this, I do not seek to substitute my own judgement for that of Mr and Mrs Bates. I simply make the point to underline the fact that I cannot possibly find that no reasonable neighbour would have refused consent on the grounds of visual amenity. It was not argued before me that Mr and Mrs Bates’ visual amenity was not something that was properly protectable by sub-clause 2(c ). Nor was it argued that they were acting from “improper motives”. It follows, granted my findings, that they most certainly were not acting unreasonably, arbitrarily or capriously in refusing their consent.

Accordingly, on Issue (3) I entirely reject Mr Margerison’s claim that consent for erection of the proposed pitched roof was unreasonably withheld by Mr and Mrs Bates.

I intend to circulate a copy of this judgment to the parties in draft. That draft judgment is subject to the restrictions set out in paragraph 2.4 of Practice Direction – Reserved Judgments to CPR Part 40. If the parties are able to agree a Minute of Order reflecting the terms of this Judgment and all consequential matters then they need not attend on hand down. I, or some other Judge, will hand this judgment down on a date to be appointed. The parties will be notified of that date and time limits for appealing will run from the date of actual hand down. I appreciate that the parties may seek permission to appeal and, if they do, I am content to deal with that by way of telephone hearing in order to minimise costs. I am also content to deal with any other disputes between the parties as to the form of the Minute of Order and all consequential issues by telephone, again to save costs. However, if either party wishes for an oral hearing then that party is entitled to such a hearing. At such oral hearing I will first hand down this judgment myself and, then, hear the consequential submissions. That hearing will be arranged by the court to reflect the availability of the parties and myself.

Accordingly, on the Issues which arise:-