#6649 - Wrotham Park Estate V. Parkside Homes Ltd. - Commercial Remedies BCL

Wrotham Park Estate v. Parkside Homes Ltd

Facts

By a conveyance dated April 10, 1935, the sixth Earl of Strafford conveyed to Aubrey Aston Blake some 47 acres of land (“area 14”) situate in the parish of South Mimms in Hertfordshire and forming part of the Wrotham Park Estate.

The second schedule to the conveyance contained, inter alia, the following restrictive covenant: “Not to develop the said land for building purposes except in strict accordance with a lay-out plan to be first submitted to and approved in writing by the vendor or the surveyors such plan to indicate thereon the roads, sewers and drains to be constructed.”

By 1955 the Potters Bar Urban District Council had acquired the triangle of land for 225. In 1969 the council decided to sell off part of it as building land, and, having bought No. 11 Brooklands Gardens for 6,500, they obtained planning permission from the Hertfordshire County Council to demolish it, so as to drive a road through the space thus made available, and to erect 13 houses and garages on the greater part of the triangle (“the allotment site”), leaving the apex unaffected. On September 9, 1971, the Potters Bar Urban District Council offered the allotment site for sale by public auction as freehold building land. The sale was extensively advertised and special conditions in the particulars of sale gave notice of the existence of the restrictive covenants which were set out in full in the charges register.

At the auction sale the allotment site was knocked down to the first defendants, Parkside Homes Ltd. (“Parkside”), for 90,000. Before buying neither Parkside nor their solicitors were provided with, nor requested, a copy of the restrictive covenants, although the answers to requisitions mentioned that approval of the proposed lay-out would be necessary. Parkside applied for and received permission for an additional house on the allotment site. On October 12, 1971, the allotment site was transferred to Parkside which was duly registered as owner. In the same month demolition of No. 11 Brooklands Gardens began and by the end of January some preliminary building work, including footings, had begun on one or more of the houses, and holding deposits had been received from some intending purchasers.

By a letter dated January 5, 1972, managing agents for the plaintiffs drew Parkside's attention to the lay-out stipulation and sought an assurance that no building would take place. Parkside's solicitors replied on January 6 confirming that they were aware of the stipulation but that they were advised by counsel that it was not enforceable.

On February 14, 1972, the plaintiffs issued a writ against Parkside seeking an injunction to restrain them from building on the allotment site other than in accordance with a lay-out plan approved by the plaintiffs and a mandatory injunction for the demolition of any buildings in breach of the restrictive covenant. They did not seek interlocutory relief. The issue of the writ and statement of claim did not deter Parkside and building works continued. By mid-July 1972 the access road had been largely constructed and all the houses were in various stages of construction, some being well advanced. On that basis contracts were exchanged with the purchasers of all 14 houses between the beginning of October and the end of November 1972. The houses were completed by January 1973 and the new owners moved in.

Holding

Mandatory Injunction Refused

Mr. Newsom submitted, and I accept, that it is no answer to a claim for a mandatory injunction that the plaintiffs, having issued proceedings, deliberately held their hand and did not seek the assistance of the court for the purpose of preserving the status quo. On the other hand, it is, in my view, equally true that a plaintiff is not entitled “as of course” to have everything pulled down that was built after the issue of the writ. The erection of the houses, whether one likes it or not, is a fait accompli and the houses are now the homes of people. I accept that this particular fait accompli is reversible and could be undone. But I cannot close my eyes to the fact that the houses now exist. It would, in my opinion, be an unpardonable waste of much needed houses to direct that they now be pulled down and I have never had a moment's doubt during the hearing of this case that such an order ought to be refused. No damage of a financial nature has been done to the plaintiffs by the breach of the lay-out stipulation. The plaintiffs' use of the Wrotham Park Estate has not been and will not be impeded. It is totally unnecessary to demolish the houses in order to preserve the integrity of the restrictive covenants imposed on the rest of area 14. Without hesitation I decline to grant a mandatory injunction.

Damages in substitution of the injunction

I now consider the question what damages, if any, should be awarded to the plaintiffs. I am able under the jurisdiction which originated with the Chancery Amendment Act 1858 (Lord Cairns Act) to award damages in substitution for an injunction.

For I apprehend that I am not able to award damages against a defendant except as a substitute for an injunction that I could have granted against the same defendant. Parkside has parted with the ownership of the allotment site except the roads. I am able to grant a mandatory injunction to compel Parkside to remove the roads, at any rate once the houses have gone. I can, therefore, award damages against Parkside in substitution for that injunction. But I can award damages against each of the purchasers in substitution for any mandatory injunction that I could have granted against the same purchaser.

Quantum of Damages

Defendant’s argument: I turn to the consideration of the quantum of damages. I was asked by the parties to assess the damages myself, should the question arise, rather than to direct an inquiry. The basic rule in contract is to measure damages by that sum of money which will put the plaintiff in the same position as he would have been in if the contract had not been broken. From that basis, the defendants argue that the damages are nil or purely nominal, because the value of the Wrotham Park Estate as the plaintiffs concede is not diminished by one farthing in consequence of the construction of a road and the erection of 14 houses on the allotment site. If, therefore, the defendants submit, I refuse an injunction I ought to award no damages in lieu. That would seem, on the face of it, a result of questionable fairness on the facts of this case.

Reliance on wayleave cases: If, for social and economic reasons, the court does not see fit in the exercise of its discretion, to order demolition of the 14 houses, is it just that the plaintiffs should receive no compensation and that the defendants should be left in undisturbed possession of the fruits of their wrongdoing? Common sense would seem to demand a negative answer to this question. A comparable problem arose in wayleave cases where the defendant had trespassed by making use of the plaintiff's underground ways to the defendant's profit but without diminishing the value of the plaintiff's property. The plaintiff, in such cases, received damages assessed by reference to a reasonable wayleave rent.

Whitwham v. Westminster Brymbo Coal and Coke Co. [1896] 2 Ch. 538 - For six years the defendant wrongfully tipped colliery waste onto the plaintiff's land. The question then arose what damages should be awarded for the wrongful act done to the plaintiff during the period of the defendant's unauthorised user of the land. The official referee found that the diminution in the value of the plaintiff's land was only 200, but that the value of the plaintiff's land to the defendant in 1888 for tipping purposes for six years was some 900. It was held that the proper scale of damages was the higher sum on the ground that a trespasser should not be allowed to make use of another person's land without in some way compensating that other person for the user.

Watson, Laidlaw & Co. Ltd. v. Pott, Cassels and Williamson (1914) 31 R.P.C. 104 - A patentee elected to sue an infringer for damages rather than for an account of profits. Part of the infringement had taken place in Java. There was evidence that the patentee could not have competed successfully in that island. It was submitted that no damages ought to be awarded in respect of the Java infringement. Lord Shaw said, at pp. 119–120:

“For wherever an abstraction or invasion of property has occurred, then, unless such abstraction or invasion were to be sanctioned by law, the law ought to yield a recompense under the category or principle, as I say, either of price or of hire. If A, being a liveryman, keeps his horse standing idle in the stable, and B, against his wish or without his knowledge, rides or drives it out, it is no answer to A for B to say: ‘Against what loss do you want to be restored? I restore the horse. There is no loss. The horse is none the worse; it is the better for the exercise.’ I confess to your Lordships that this seems to me to be precisely in principle the kind of question and retort which underlay the argument of the learned counsel for the appellants about the Java trade.… in such cases it appears to me that the correct and full measure is only reached by adding that a patentee is also entitled, on the principle of price or hire, to a royalty for the unauthorised sale or use of every one of the infringing machines in a market which the infringer, if left to himself, might not have reached.”

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