Norwich City College of Further and Higher Education v McQuillin & Anor

This is a claim by Norwich City College of Further and Higher Education (“the College”) for a declaration under section 84(2) of the Law of Property Act 1925 that certain freehold land at Ipswich Road in Norwich formerly known as The Grove and Ireland’s Meadow and which now forms part of the College campus is no longer affected by restrictive covenants contained in a conveyance of the land dated 23 May 1936 (“the Conveyance”), and that those covenants are no longer enforceable by anyone.

The first defendant, Mr McQuillin, and the second defendant, Mrs Downs, originally asserted in correspondence that their properties enjoy the benefit of the covenants, and that they are entitled to enforce them. By letter dated 5 June 2009, Mrs Downs stated that she would not be attending the hearing and had decided not to defend the action further. Mr McQuillin appeared in person.

The claim is supported by a witness statement of Mr Richard Palmer, the Principal of the College. He explains that the College is one of the largest further and higher education colleges in the country with over 16,000 students. It was founded in 1930 by the City Council of Norwich as successor to the Municipal Technical Institute. It passed into the control of the County Council in 1974 and became an incorporated body in 1993.

The College’s main campus is located on Ipswich Road in Norwich and is an amalgamation of four different parcels of land, which were acquired at different times but which were originally part of the Lakenham Estate owned by the Trafford family. One of those parcels of land was the subject of the Conveyance, two (now known as Elmhurst and the Thetford Building) were sold by the Trafford family in 1931 and the fourth (known as Southwell Lodge) was sold by the Trafford family in 1961.

The Conveyance was made between Sigismund William Joseph Trafford as “the Vendor” and The Lord Mayor, Aldermen and Citizens of the City of Norwich as “the Corporation” in consideration of the sum of £9,750.

Recital 2 states that by a Vesting Deed dated 20 March 1926, there had vested in the Vendor:

Recital 3 records it was agreed that the sale and transfer was:

The property conveyed was described in clause 1 as:

The property was conveyed in fee simple:

At clause 2 it was stated (with emphasis added):

The First Schedule contained the following covenants:

The Conveyance does not clearly identify the precise location and extent of the Trafford Estate at Lakenham as at 23 May 1936. Investigations carried out on behalf of the College have, however, revealed that on 17 April 1914, Sigismund Trafford entered into a marriage settlement with Lady Elizabeth Bertie which included the estate at Lakenham. By vesting deed dated 20 March 1926 the lands comprised in the settlement were vested in Sigismund Trafford in fee simple upon certain trusts. A number of plans are attached to the vesting deed and they show the extent of the lands in and around Lakenham as of that date.

I am satisfied on the basis of the evidence before me that the land at Lakenham was gradually sold off by the Trafford family for residential development from as early as the 1890s. This continued in the period from 1926 to 1936. By way of illustration, on 3 November 1931, Sigismund Trafford sold the block of land upon which a cul-de-sac of detached and semi-detached houses called Ipswich Grove was built in the course of the 1930s. I am also satisfied that what remained of the Trafford Estate at Lakenham was sold by the trustees of the settlement at the time to a company called Fountain Estates (Norwich) Ltd by a conveyance dated 6 April 1961.

Mr Palmer explains that the College has outgrown its existing facilities and is proposing to redevelop the campus. This will involve the phased demolition of the existing buildings on the campus, and the construction of new buildings in their place. The total cost of the development is likely to be in the region of £173 million. The main redevelopment will be confined to the land the subject of the Conveyance. A resolution to grant planning permission for the redevelopment was passed on 11 September 2008 and it evidently provoked a considerable amount of opposition from local residents, some of whom organised themselves into an action group called College Redevelopment Concerns.

On 10 April 2008 Mr Palmer received an email from College Redevelopment Concerns drawing his attention to the covenant in clause 2 of the Conveyance and suggesting that the existence of the covenant would preclude the College from proceeding. It therefore decided to issue these proceedings and invite the court to make a declaration confirming that the land the subject of the Conveyance is no longer affected by the covenant for the reasons I shall shortly explain.

Section 84(2) of the Law of Property Act 1925 reads:

to declare whether or not in any particular case any freehold land is, or would in any given event be, affected by a restriction imposed by any instrument; or

to declare what, upon the true construction of any instrument purporting to impose a restriction, is the nature and extent of the restriction thereby imposed and whether the same is, or would in any given event be, enforceable and if so by whom.”

The procedure under section 84(2) may usefully be invoked where a claimant believes a covenant is, on its proper construction, no longer enforceable and wishes to obtain a clean title, clear of any restrictions. Its value is that it is binding in rem on all persons entitled to the benefit of the restriction, whether they are parties to the proceedings or not. Accordingly, it is well established that when an order of this kind is asked for, the court ought to make every effort to see that all persons who may wish to oppose the making of the order have the opportunity of being heard, stating their objections in argument before the court, and inviting the court to refuse to exercise its powers: Re Sunnyfield[1932] 1 Ch. 79.

The College gave notice of its intention to make this application by means of an entirely appropriate circular letter which was hand-delivered to all properties in the area defined as the Trafford Estate at Lakenham as of 20 March 1926 and which might conceivably be affected by any development of the College land. In addition, copies of the circular letter were sent to the solicitors acting for the Trafford family, Norfolk County Council and Norwich City Council. In total, over 1,000 letters were distributed and these elicited 179 responses. Of these, 154 indicated that the respondent consented to the College’s proposed application, five indicated that the respondent objected to the College’s proposed application and wished to be made a party to it; four indicated that the respondent wished neither to consent nor object; seven indicated that the respondent was not the owner of the property to which the circular letter had been delivered and in the case of nine of the responses, it was not immediately obvious whether the respondent consented or objected. Further letters were written to each of these nine and, in response, eight confirmed that they consented to the application and one indicated that he wished neither to consent nor object.

Norwich City Council has not responded to the circular letter. Norfolk County Council has confirmed that it does not oppose the application.

Where the College has become aware that a relevant property is subject to a mortgage then a copy of the circular letter has been sent to the mortgagee enclosing a copy of the circular letter. Most of the mortgagees have not responded. Those that have responded have indicated either that they have no objection or that they do not have any comment to make.

The solicitors acting for the Trafford family confirmed that their clients did not wish to become respondents to the proposed application.

Objections to the proposed application were received from five persons, including Mr McQuillin and Mrs Downs. In response to further correspondence from the College’s solicitors, three withdrew their objections. That left Mr McQuillin and Mrs Downs who were accordingly joined as defendants to the proceedings. In the end, as I have mentioned, only Mr McQuillin has maintained his objection.

As has been seen, the covenants imposed by clause 2 of the Conveyance were stated to be: “for the benefit of the Trafford Estate at Lakenham or the part or parts thereof for the time being remaining unsold.”

The College contends that, on the true interpretation of the Conveyance and for the purposes of section 78(1) of the Law of Property Act 1925, the effect of this wording was to limit annexation of the benefit of the covenants to so much of the land belonging to Sigismund Trafford at the date of the Conveyance as thereafter continued to be in the ownership of Sigismund Trafford and his successors in title to the Trafford Estate.

In other words:

the parties to the Conveyance made clear their intention that the land comprising the Trafford Estate retained by Sigismund Trafford as at 23 May 1936 was to have the benefit of the Covenants only for so long as it remained for the time being unsold;

the definition excluded land subsequently sold off from the Trafford Estate by Sigismund Trafford or his successors in title.

Mr McQuillin, on the other hand, contends that the effect of this wording was to limit annexation of the benefit of the covenants to so much of the land belonging to Sigismund Trafford as remained unsold as at 23 May 1936 and irrespective of whether or not it was sold off thereafter.

In my judgment the interpretation advanced by the College case is correct. I reach that conclusion for all of the following reasons. First, it is the natural meaning of the words “For the benefit of the Trafford Estate at Lakenham or the part or parts thereof for the time being remaining unsold”. They contain express reference both to the Vendor – that is to say, Sigismund Trafford – and his successors in title, so necessarily looking to the future. Moreover, and perhaps more importantly, the benefit of the covenants is annexed only to the part or parts of the Trafford Estate for the time being remaining unsold. These words again look to the future and are only necessary if the interpretation for which the College contends is correct.

Second, the wording of the positive covenant imposed by paragraph 1 of the First Schedule suggests it is imposed for the benefit of Sigismund Trafford and not all persons to whom any part of the Trafford Estate might be sold. Specifically, it imposes upon the Corporation an obligation to build and thereafter maintain a fence to the satisfaction of Sigismund Trafford’s agent.

Third, by paragraph 4 of the First Schedule, Sigismund Trafford reserved to himself the exclusive right to release, waive or alter any of the covenants. Such a reservation is, I think, at least prima facie inconsistent with any one other than him having the benefit of those covenants.

Fourth, paragraph 5 of the First Schedule defines the “Vendor” using the same phraseology as that found in clause 2, so emphasising its significance.

Finally, this interpretation is consistent with the matrix of fact in 1936. At that time the Trafford Estate was gradually being sold off for development purposes. In those circumstances it was perfectly natural for Sigismund Trafford to seek to retain the exclusive power to give or withhold consent to a modification or relaxation of the covenants which he imposed without the need to obtain the consent of every subsequent purchaser to whom he had sold off other parts of the Trafford Estate. In this connection I was referred to the decision of the Court of Appeal in Crest Nicholson Residential (South) Ltd v McAllister[2004] EWCA Civ 410; [2004] 1 WLR 2049. There Chadwick LJ said at paragraph [48]:

I believe exactly the same reasoning applies to the present case. In the light of the history of the disintegration of the Trafford Estate, I am satisfied that there is now no-one entitled to the benefit of the covenants and that the College is entitled to the declaration sought.