Summary

The court refused to strike out an action in which the owners of a plot of land had sought a declaration, pursuant to the Law of Property Act 1925 s.84(2), that the land was no longer affected by a restrictive covenant. A decision by the Lands Tribunal refusing an earlier application by the claimants' predecessor in title for discharge of the covenant did not give rise to an estoppel per rem judicatam, either by way of cause of action estoppel or issue estoppel, and there had not been an abuse of process.

Facts

The defendants applied for summary judgment or, alternatively, the striking out of a claim brought by the claimants.

The claimants were the freehold proprietors of a plot of land with a single dwelling-house. Their predecessor in title (G) had owned the land subject to a covenant not to erect any buildings other than one private dwelling-house. In 1978, G had applied to the Lands Tribunal for the discharge or modification of the covenant under the Law of Property Act 1925 s.84(1)(aa), but that application was refused on the ground that the covenant secured a practical benefit upon those who had objected to the application. That decision was upheld on appeal. In 2015, the claimants, who wanted to build another house on the land, sought a declaration pursuant to s.84(2) that the land was no longer affected by the covenant.

The first, eighth and twelfth defendants submitted that the Lands Tribunal decision gave rise to an estoppel per rem judicatam, either by way of cause of action estoppel, or issue estoppel. Alternatively, they submitted that the proceedings brought by the claimants amounted to re-litigation of the issue, which constituted an abuse of process of the court.

Held

(1) Cause of action or issue estoppel - Section 84 drew a clear distinction between the functions of the tribunal and the functions of the court in determining disputes. Whether, and to what extent, a restriction affected land was a matter for the court under s.84(2), and whether any such restriction should be discharged or modified was a matter for the tribunal under s.84(1). The tribunal could decide an application brought under s.84(1) on the footing that the land was so affected, but that would not give rise to a binding decision. Prior to the enactment of s.84(3A), which was inserted and introduced by amendment by the Law of Property Act 1969, the tribunal did not have authority to decide issues as to the enforceability of covenants, and the restrictions imposed by them, upon land, Purkiss Application, Re [1962] 1 W.L.R. 902 applied, Shepherd Homes Ltd v Sandham (No.2) [1971] 1 W.L.R. 1062 considered. That sub-section was not intended to effect a jurisdictional change to the existing arrangements. Its purpose was to facilitate a more convenient procedure for resolving issues which were within the court's jurisdiction under s.84(2) where such issues were connected with an application proceeding in the Lands Tribunal. It followed that the defendants' application, insofar as it was based upon cause of action or issue estoppel, had to fail. The Lands Tribunal did not have jurisdiction over the subject-matter which fell within the ambit of s.84(2). It made no decision upon such matters, and even if it did, such a decision was not final. It made no determination upon a question raised in later litigation. It made no difference that there might have been a concession in the 1978 application as to the applicability of the covenant, because the Lands Tribunal made no decision based upon it; it simply proceeded upon a footing, and thus bound no-one, Virgin Atlantic Airways Ltd v Premium Aircraft Interiors UK Ltd [2013] UKSC 46, Arnold v National Westminster Bank Plc (No.1) [1991] 2 A.C. 93 and Victoria Recreation Ground, Portslade's Application, Re (1981) 41 P. & C.R. 119 considered (see paras 21, 29, 37, 40 of judgment).

(2) Abuse of process - There was no abuse of process on the part of the claimants. The public interest that there should be finality in litigation, and that a party should not be twice vexed in the same matter, was not infringed, Johnson v Gore Wood & Co (No.1) [2002] 2 A.C. 1 applied. The matter in which the Lands Tribunal was concerned, namely the discharge or modification of a restriction arising under the covenant, pursuant to s.84(1), was different from that before the court in the instant proceedings, namely whether the land was affected by a restriction and the effect thereof, under s.84(2). Any determination of s.84(2) issues, had any attempt been made to ventilate them in the course of the 1978 proceedings, would have been put off for the consideration of the court, perhaps using the machinery introduced by s.84(3A). There had, in light of those considerations, been no harassment of any defendant, and there was no question of a collateral attack upon the correctness of any decision made by another court or tribunal. The crucial question was whether, in all the circumstances, one party was misusing or abusing the process of the court by seeking to raise before it an issue which could have been raised before. The answer to that question in the instant case was plainly "no", Johnson applied, Henderson v Henderson [1843-60] All E.R. Rep. 378 considered. Furthermore, it would be a remarkable, and most unjust, result for any contrary conclusion to be reached in the instant case (paras 41-42).

Application refused