Restrictive covenants and building schemes: San Juan v Allen
The Claimants submitted that the Defendants were subject to a building scheme which prevented the owners on a development from building more than one dwelling on their plot. The Defendants submitted that a declaration should not be granted on hypothetical facts and that the claim was premature in the absence of any evidence that they intended to begin developing their land.
The Judge held that it was irrelevant that the Defendants had not yet begun to implement their redevelopment plans; the fact that they were due to occur within a reasonable timescale was sufficient to allow a claim for a declaration. Furthermore, the obtaining of planning permission by the Defendants indicated that they intended to build and so the Claimants’ claim was not premature.
The Judge agreed that the owners of the plots were bound by the restrictive covenants under a building scheme and the declaration was granted.
Both parties owned houses in a residential development of 36 plots. The Claimants alleged that the development was subject to a building scheme under which each plot owner was entitled to enforce restrictive covenants contained in the common form transfer used by the developer when the plots were first transferred.
One of the restrictive covenants required the purchasers to agree ‘‘Not to use the property hereby transferred …. for any other purpose than as a private dwelling house with garage for the use of one family only and not to divide the same into flats….’’
The Defendants obtained planning permission to demolish their house and build four new houses on the land. Consequently, the Claimants sought an injunction to prevent such works from taking place. The Defendants asserted that the claim was premature as they had not intended to start the redevelopment works until the restrictive covenant issues had been determined.
The Defendants argued that:
(1) the claim was premature, and the facts hypothetical, because there was no real evidence (beyond the granting of planning permission) that the Defendants intended to carry out redevelopment plans; (2) a declaration should be refused where it is being sought in relation to facts which have not yet occurred and the test for granting a declaration should be identical to that for granting a quia timet injunction.
Master Clark rejected the contention that a declaration will be refused where the relevant facts have not yet occurred. He stated that ‘‘whether facts are ‘hypothetical’ is a question of fact and degree, depending on the level of uncertainty attached to their future occurrence.’’ Importantly, ‘‘facts should not be treated as hypothetical as long as they are likely to occur within a reasonable timescale.’’ Clearly, the granting of planning permission and drawing up of plans indicated that the Defendants intended to undertake works in the foreseeable future. It could not, therefore, be said that the declaration should not be granted because it related to hypothetical facts.
Furthermore he noted that there is no authority which ‘ellides’ the principles of declaratory relief and a quia timet injunction. He stated that ‘‘as a matter of logic, there may be circumstances in which the threat is not sufficiently imminent to justify injunctive relief, but declaratory relief is nonetheless appropriate.’’
The circumstances indicated that the Defendants intended to build in accordance with the planning permission. The Defendants’ assertion that they would not do so until the restrictive covenant issues were resolved did not amount to a specific assurance that they did not intend to build imminently. It could not, therefore, be said that the Claimants’ claim for a declaration was premature or unnecessary.
After reviewing the evidence and concluding that there was clear evidence of a building scheme, the Judge granted the declaration sought.
News & Insights
Building Up: What are London's limits?
In the first of our ‘Building Up’ series, we look at some of the key challenges to delivering taller developments in the capital.
The Law Commission launches consultation into the leasehold enfranchisement of houses and flats
The highly anticipated consultation into the leasehold enfranchisement of houses and flats is now open.
Charles Russell Speechlys advises on sale of the Zenium Group to CyrusOne
Zenium is a leading hyperscale data center provider in Europe.