There are several reasons litigators should read the judgment of  HHJ Paul Matthews (sitting as a High Court Judge) in Jones -v- Oven [2017] EWHC 1647 (Ch). However this is another case where a claim for damages failed because the claimants failed to prove their case.


The action concerned the terms on which a strip of land, some 4 metres wide, should be transferred to the claimants, in particular whether the land would be subject to certain restrictive covenants.  The claimants sought  a declaration as to the terms of the transfer and damages.


The claimants sought damages because, it was alleged, the failure to transfer the strip of land earlier meant that they could not develop a livery business.   The judge did not accept the evidence that it had been the claimants’ intention to set up a livery business.


  1. A matter of some importance in this case is what exactly were the claimants’ intentions in relation to the livery business which they now say they have been hindered in setting up because of the failure to transfer the Strip back to them. The burden of proving that the claimants had the intention of creating such a business in 2010 and following lies squarely on the claimants. In my judgment they have not discharged this burden. I say this for the following reasons.
  2. First, there are no documents disclosed which support or confirm the intention to set up such a business at any stage before these proceedings were commenced. One might have expected to see, for example, documents relating to planning, health and safety, a business plan, approval by industry bodies, and draft documentation for clients, amongst others. But there is nothing of this kind. Mr Calland submitted that all these absences could be explained, and it may be that some of them can. But it is striking that there is simply nothing.
  3. Second, the claimants have over the years since 2010 made various claims for compensation against the defendants in respect of the failure to transfer the Strip back to them, but on a variety of grounds other than that they were going to start a commercial livery business. These include claims for a bare rent per square foot (in emails from 2010 to 2012), lost profits to be made by storage and sale of an animal bedding product called Miscanthus (emails in 2012 and 2013), and other unspecified bases. Mr Calland sought to explain the lack of reference to an intention to start a livery business, but looking at the email correspondence it is plain that the second claimant sought every opportunity to put pressure on and criticise the first defendant, and this would have been another, weighty means of doing so. But he did not do so.
  4. Third, although the first claimant in her witness statement says that the claimants “decided that we would start a commercial livery business” ([12]), and that their “intention at that time [was] to use the 4 m strip for commercial stabling” ([10]), I do not accept that this is accurate, and certainly not as to when that intention may have been first formulated. The first claimant said in her oral evidence that she did not deal with decisions as to what happened to the land, as these matters were dealt with by the second claimant. I think it more likely therefore that this aspect of her written evidence was in fact contributed by the second claimant. As I have said, I cannot treat his uncorroborated evidence as truthful. Although the witness statement relies on the provisions in the 2002 – 2003 restrictive covenants which carve out from the scope of the covenants use for “commercial stabling” (something which the second claimant himself alluded to in his oral evidence), I do not consider that this phrase will bear the weight which is given to it. It does not show that the claimants had that intention at the time. It only shows that the draughtsman contemplated the possibility as at some future time. The plan attached to the particulars of claim and stated to have been prepared by the second claimant, is dated to August 2015, and in my judgment that represents the earliest time at which this intention, if ever seriously intended, would have been first formulated…
  1. Even if there had been a genuine intention from the beginning to create the new livery business, there was nonetheless a question mark over whether this intention could ever have been validly implemented. Mr Butler said that the claimants have never had planning permission for the change of use to a livery business. They had not even made an application so far. Second, the strip had been subject to the 2005 restrictive covenants (the estate covenants) until 2016, when they were released. But those covenants would have prevented the carrying on of a livery business (indeed, any business) until then. Third, the southern part of the strip, still in the hands of CCR, was transferred to the claimants only in 2016. But it was not possible for the claimants to carry on the proposed business until they had that part of the strip also. Fourthly, in order for the business to have been launched, considerable capital expenditure would have had to be incurred. The cost of this was likely to have been prohibitive.
    1. The last issue is whether the claimants have suffered any recoverable loss as a result of the breach entitling them to substantive damages. Although during the extensive email correspondence between the parties the claimants from time to time sought compensation for the failure to transfer the Strip to them, the basis was either a rental or compensation for not being able to carry out some other business activity on the strip. Although the prayer to the particulars of claim made an alternative claim for mesne profits, the damages claim actually advanced at trial was one for damages for loss of profits flowing from an intended commercial livery business using the Strip. I have held that the claimants have failed to prove that they intended from 2010 onwards to establish such a business. Accordingly the claim for substantive damages fails.
    2. If I were wrong about that, an issue of remoteness of loss would arise. The question would be whether it was in the reasonable contemplation of the defendants and CCR in 2005 when the defendants bought Bremners, that if the obligation to re-transfer the Strip to the claimants arose, and the defendants failed to do so, the claimants might suffer a loss because they could not make the anticipated profits from the commercial livery business that they intended to establish.
    3. In my judgment, the defendants, in entering into the contract with CCR, must have contemplated the possibility that the obligation to transfer the Strip would arise, and that CCR would have a liability to the claimants under the terms of the transfer of 2003. So the question would be, what was, or may reasonably be supposed to have been, in the contemplation of the parties to the transfer of 2003 at that time? It is not necessary to show contemplation of the precise detail of the loss concerned. It is sufficient to show contemplation of loss of that kind.
    4. Although the transfer refers to a carveout from the restrictive covenants affecting the retained land for (amongst other things) commercial stabling, that does not automatically mean that that must have been in the contemplation of the parties as an intended use of the Strip for this purpose at the time. The range of possible uses of land is so wide, and so many regulatory and other hurdles have to be jumped before they can be undertaken, that there must be something particular to show that a party undertaking a liability to transfer land is aware that the proposed recipient intends to use it in any particular way. And this is the more so in a case like the present, when the obligation to transfer would only be triggered by an act of the transferor, and was not certain ever to happen. In my judgment, therefore, the particular loss claimed would be too remote.
    5. There are also causation points taken on this part of the case. It was said that the claimants could not have gone ahead with their new business consistently with the 2005 estate covenants until they were released in 2016. I have already said that I do not think they could have been enforced against the claimants, as they were created after the Strip left their ownership, and they were entitled to get it back unencumbered. It was also said that there was no planning permission for the new business. This is true, but the (rather slight) evidence was that it would have been obtained, and on the balance of probabilities I so hold. A point was made that the southern part of the Strip was needed too, and this was in the hands of CCR. But CCR allowed the claimants to use it, and ultimately transferred it to them, so I do not consider that that would have been an obstacle. Lastly it was said that there would have been formidable expenditure needed to put the land into the appropriate condition for a commercial livery. Here the evidence was thin. I am prepared to accept the need, but in the circumstances I consider that if the claimants had wanted to establish the business they could have financed the start-up costs. So none of these points operates as a bar to the claim.
    6. In case I am wrong about the earlier part of the case, I go on briefly to consider the question of profits. As I have said, each of the parties’ experts produced an individual expert report, and subsequently, after meeting, they produced a joint report. In argument, each side tried essentially to cherry pick the expert evidence. Each side relied on the joint report when it favoured their side, but on individual reports or oral evidence when it did not. In my judgment, the joint report represented a serious attempt by the experts, pursuant to their duty to the court, to reach a common position. For this purpose there would have been a certain amount of give and take, and the report would be presented as a package rather than as a series of individual items. In these circumstances, I think it would be wrong for me to do other than take the figures put forward by the joint report as representing the best evidence of what profits might have been earned by a commercial livery business established by the claimants. Had the claimants satisfied me that they truly intended to create the commercial livery business, and had the loss not been too remote, I would have awarded as damages the figures shown as “profit before tax” (but of course discounted to remove the tax element) on page 9 of the joint report as from August 2012, allowing six months from February 2012 for the work to be done to put the property into a state fit for the business to be carried on successfully.
  1. In the result, I will (1) grant a declaration as to the true construction of the definition of retained land, (2) order specific performance of the covenant to transfer the Strip, and (3) award nominal damages of £2 to the claimants in respect of the failure to transfer the land in about February 2012.