WHEN YOU WANT A COURT ORDER BUT DON’T THINK THERE IS ANYONE TO SUE: THINK AGAIN

In Hughes Family Property Co Ltd & Anor v No Defendant [2024] EWHC 2288 (Ch) HHJ Paul Matthews (sitting as a High Court Judge) considered a case where the claimants wanted a declaration from the court, but believed that there was no-one to sue.  The rules are silent on this type of issue. However the judge held that there were appropriate defendants and they should be notified of the claim and, if necessary, made a party.

THE CASE

The claimants are the owners of certain land. They want to build on that land but it is subject to certain restrictive covenants.  The sought a declaration that they were not bound by the covenants.  The land that enjoyed the benefit of the covenants was owned by a limited company that had been dissolved, another covenantee had sold its land and stated that it did not oppose the application.

NO DEFENDANT

The claimants therefore sought permission to make the applications for a declaration without there being any defendant to the action.

THE ISSUES

1. 1. The applicants, two limited companies, have applied on Form N244 dated 2 May 2024 for an order permitting them to make a CPR Part 8 claim without naming a defendant, pursuant to CPR rule 8.2A. The provides that:

“(1) A practice direction may set out circumstances in which a claim form may be issued under this Part without naming a defendant.

(2) The practice direction may set out those cases in which an application for permission must be made by application notice before the claim form is issued.

(3) The application notice for permission –

(a) need not be served on any other person; and

(b) must be accompanied by a copy of the claim form that the applicant proposes to issue.

(4) Where the court gives permission it will give directions about the future management of the claim.”

The application is supported by evidence in box 10 of the form.

THE RULES AND PRACTICE DIRECTIONS

1. 1. As to the question who, if anyone, should be the defendant to this claim, CPR rule 8.2A refers to a practice direction setting out (i) circumstances in which a claim may be issued without a defendant, and (ii) cases where an application for permission to do so must be made before the claim form is issued. The difference between (i) and (ii) is simply as to timing. In cases under (i), issue of the claim form is possible without naming a defendant is possible without first seeking permission. In cases under (ii) it is not. This is a case under (ii) and strictly the claim should not have been issued until permission had been obtained.

 

1. 1. Although there have been three practice directions made supplementing different aspects of Part 8 (none now remaining in effect), there is no specific practice direction dealing with the issue of a claim without a defendant. (There are however rules and practice directions dealing with particular cases where there may not be a defendant: see the provisions listed in para 13.39 of the Chancery Guide, 2024 revision.)

 

1. 1. In Credit Agricole Corporate and Investment Bank v Persons Having an Immediate Right etc [2021] 1 WLR 3832, a case concerning section 13 of the Torts (Interference with Goods) Act 1977, Morgan J discussed rule 8.2A. He referred to the earlier decision of the Supreme Court in Cameron v Liverpool Victoria Insurance Co Ltd [2019] 1 WLR 1471, and said:

 

“19. … Lord Sumption [in Cameron] went on to say that the courts had themselves made exceptions to the requirement that a defendant be named in a claim form. He did not disapprove the decisions which created such exceptions. He then added, at [12], that the rules neither expressly authorised, nor expressly prohibited, exceptions to the general rule that actions against unnamed parties were permissible only against trespassers.  It seems therefore that it is consistent with the decision in Cameron to hold that it is open to a claimant to issue a Part 8 claim without joining a defendant in some cases which are not dealt with by a specific practice direction. It may not matter whether the ability to do so is regarded as being conferred by CPR r.8.2A itself or by a more general rule, such as CPR r.3.1(2)(m).”

THERE COULD BE SOMEONE WITH AN INTEREST IN THE OUTCOME

However, the judge found, there could be owners of land with a potential interest in the outcome and who could argue that the covenants were still binding.

1. 1. The applicants do not however mention the owners and occupiers of Nos 21-27 Redwells Meadow. Depending on their personal attitude, and on any legal advice which they may hereafter take, they may or may not wish to be heard on the question of the binding effect of the covenant. The evidence supporting the claim and the application is however conspicuously silent on their position. They do not appear to have been approached, as Chantreys apparently has been approached, to see whether they wish to become involved.

 

1. 1. No doubt the applicants’ view is that, since their submission is that at the time of the 1977 conveyance Chantreys did not yet own any other part of the Redwalls Meadow land, at any rate at law, the covenants cannot bind the owners of No 28 as against the owners of the other properties, and it is therefore futile to make them defendants. That may of course turn out ultimately to be the position, but it is rather putting the cart before the horse for them to say in effect that, “since we have a very strong case, unanswerable, in fact, we need not fight against anyone”.

 

1. 1. In this connection, indeed, I am reminded of what Megarry J said in John v Rees [1970] Ch 345, 402:

 

“As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change.”

1. 1. In any event I stress that, although I have seen conveyances for Nos 21, 23-24, and 26-28 Redwells Meadow, I have not so far seen any conveyances for Nos 22 and 25 Redwells Meadow. The applicants say that the terms of these other conveyances are surely going to be the same, mutatis mutandis, as those I have seen. These latter suggest that Chantreys did not acquire their legal estate in the land until after the 1977 Conveyance. As to that, indeed, what the conveyances that I have seen do is to refer to the earlier conveyance by which it is said Chantreys acquired its legal estate, but they do not set out the terms.

 

1. 1. What this means is that the court is being asked to make an inference, even in those cases where a conveyance is available. Moreover, although the conveyance for No 24 does refer to a conveyance by which Chantreys may have acquired its legal estate, the date given is simply “1977”, without reference to the month and the day. So, in three of the seven cases, there is not even the inferential evidence relied on by the applicants for their case.

 

1. 1. The application (and indeed this claim) is put before the court on the basis of the documents and information available to the applicants/claimants. There is nothing wrong with that. But they are the successors in title to the purchasers from Chantreys of No 28 only. The current owners and occupiers of Nos 21-27, on the other hand, derive their titles through their own purchasers from Chantreys, and will almost certainly have access to further relevant documents and information, probably including the missing conveyances for Nos 22 and 25.

 

1. 1. They may also have access to one or more of the earlier conveyances which are merely referred to in those conveyances, but of which no copies are presently available. Some of these documents may bear on the factual question as to when exactly Chantreys acquired its interests in the several parcels of land on Redwells Meadow. But they are not before the court, and I do not know what they may say.

 

1. 1. In addition to that, the owners and occupiers of Nos 21-27 might wish to argue that, even if it be found to be the case that Chantreys had no legal estate in other land at the time of the 1977 conveyance, the doctrine of the building scheme still applies. The conveyances are, as noted by the applicants, in materially identical form, and all contain a plan of the whole development of Nos 21-28. Chantreys did not stumble across a number of individual building plots that happened to be adjacent to each other.

 

1. It may well be that the houses were in course of erection even before Chantreys acquired its legal estate in each parcel of land. Chantreys may therefore have had other rights, perhaps equitable interests, before that. Questions of notice may therefore also arise. Of course, nothing I say here amounts to an indication of how such questions might be decided, if indeed they were ever raised. I simply make the point that the applicants cannot know how the owners and occupiers of the other properties might put their cases.

1. 1. There are two other points to make. One is that the general rule is that court decisions bind only those who are parties to them: Vandervell Trustees Ltd v White [1971] AC 912, 931, 932, 937, 941-42, HL. This is subject to certain exceptions, such as representation orders (eg CPR rules 19.8 and 19.9) and notice procedures (eg CPR rule 19.13, formerly 19.8A), but, so far as I can see, none of those exceptions applies here. So, if the owners and occupiers of Nos 21-27 are not made parties, on the face of it they will not be bound by the court’s decision. The only persons who will certainly be so bound are the claimants themselves. In that case, cui bono?

1. 1. The other is that the court will be asked in this claim to make a declaration. That is a discretionary remedy: CPR rule 40.20; Bank of New York Mellon v Essar Steel India Ltd [2018] EWHC 3177 (Ch), [21]-[22]. One aspect of the case at trial therefore will be whether there are any factors tending to make it undesirable for the court to make a declaration. Without deciding anything at this stage, not telling some of the people who may have something to say about the matter looks to me at present as if it might be such a factor.

Conclusion

1. 1. My conclusion therefore on this application is that the obvious defendants to this claim are those who would have an interest in enforcing the covenant if it were valid, namely the owners and occupiers of Nos 21-27 Redwells Meadow. If approached, they may, of course, like Chantreys, express no interest in taking part. But that will be their choice, rather than that of the applicants. In my judgment, therefore, unless the owners and occupiers of Nos 21-27 confirm that they do not oppose the claim, they are proper to be made defendants.

1. Because this is not an appropriate case for a claim to be made without a defendant, the application is dismissed. However, notwithstanding that the claim form was issued before permission was obtained, the claim as issued may continue on the basis that the owners and occupiers of Nos 21-27 Redwells Meadow either confirm in writing that they do not oppose the claim or have been served with the claim form and supporting evidence (and the usual response pack).