REF/2007/0880
ADJUDICATOR TO HER MAJESTY’S LAND REGISTRY
LAND REGISTRATION ACT 2002
IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY
BETWEEN
(1) DAVID ALEXANDER ROGERS
(2) LUCY ALEXANDRA ROGERS
APPLICANTS
and
PENELOPE JANE MARGARET THOMPSON
RESPONDENT
Property Address: Mockbeggars, Vinegar Hill, Milford on Sea, SO41 0RZ
Title Number: HP284861
Before: Mr. Michael Mark sitting as Deputy Adjudicator to HM Land Registry
Sitting at: Procession House
On: 23 May 2008
Applicants Representation: Counsel
Respondent Representation: Mr. Rus Slater, son-in-law
DECISION
Application pursuant to section 41(1) of the Land Registration Act 2002 to have a restriction disapplied. Consideration of terms upon which it would be appropriate for it to be disapplied in all the circumstances.
The Respondent, Mrs. Thompson, is 82 years old. Until early 2005, she owned and lived in Mockbeggars, an “older style” detached house in its own grounds at Milford on Sea. She wished to sell it and move to a smaller and less expensive property. She had hoped to obtain a price of £500,000 for it, but eventually entered into a contract dated 10 February 2005 with a developer, New Forest Projects Limited (NFP), to sell it for a price of £435,000, but with a provision by which an additional £170,000 was to be payable in the event that planning consent was obtained for a minimum of one further detached dwelling house was obtained in addition to the existing property.
- The provision, in clause 15 of the agreement, refers to NFP as “the Buyer”, to Mrs. Thompson as “the Seller”, and to Mockbeggars as “the Property”. It reads as follows:
“15. The Buyer shall in the Transfer to them enter into covenants in substantially the following form
15.1. In the event of the Buyer or its successors in title within 35 years obtaining planning permission from the local planning authority or on appeal for the further development or redevelopment of the Property for the construction of one or more detached dwellings on the Property (in addition to the existing dwelling) the Buyer shall notify the Seller’s Solicitors and pay to them within 28 days as agents for the Seller the further sum of £170,000.00 by way of overage and the parties will take such steps as are necessary to protect the Seller’s rights in connection with this entry in the register of title at the Land Registry provided that on the payment of the sum of £170,000 all covenants to protect the overage shall be cancelled by the Seller
15.2 For the purpose of this Agreement the following definitions shall have the meanings ascribed to them
Application: means an application by the Buyer for Planning Consent for a minimum of one further detached dwelling house on the property in addition to the existing dwelling house
Planning Permission: means Planning Permission issued pursuant to the Application.
15.3 The Buyer agrees as follows:-
1. as soon as practicable but in any event not later than 28 days from the date of completion of this agreement to submit the application to the local planning authority and thereafter to pursue its application for the Planning Permission and to use all reasonable endeavours to procure the Planning Permission;
2. In the event of the application being refused by the local planning authority (including a deemed refusal because the application is undetermined within three months of its submission) then the buyer shall initiate and pursue an appeal against such refusal or deemed refusal of consent and shall rigorously pursue the same and use its best endeavours to be successful in such appeal
3. to keep the Seller regularly informed of the progress of the Application and any appeal
4. to inform the Seller immediately a Planning Application is granted or refused by the local planning authority or upon appeal and within seven days following receipt to deliver to the Seller a copy of all and any written decisions
15.4 The Buyer hereby further covenants with the Seller that upon any disposition of the property or any part thereof (including a Lease other than a Mortgage term) they will procure that the disponee of the same shall enter into a Deed with the Seller in a form to be approved by the Seller in the same terms as this clause or as nearly thereto as the circumstances allow and the Seller will in such Deed release the Buyer from any future liability under the Agreements contained in Clause 15.1 hereof
15.5 The Buyer and the Seller hereby apply to the Chief Land Registrar to enter in the register of the title to the property a restriction that except under an order of the Registrar no disposition of the property or any part or parts thereof (including a Lease other than a Mortgage term and including all dispositions by a Chargee or Mortgagee in the exercise of a power of sale) shall be registered without the consent of the Seller or the Seller’s solicitor
15.6 The Seller hereby covenants with the Buyer and their successors in title of the property that they will give their consent to the registration of a disposition of the property or any part or parts thereof if the disponee of the same shall have entered into a Deed in accordance with the provisions of this Clause and the Seller shall have received the same from the disponee duly stamped with the appropriate Stamp Duty (if any)”.
- Although there is no copy of any transfer in the file, it is common ground that the sale was completed and a covenant in the terms required by clause 15 was included in that transfer. It is further common ground that an application for planning permission was made by NFP and was rejected and that in due course an appeal was rejected. There may be a potential issue, which is not before me, whether NFP did use appropriate endeavours to obtain the permission and to succeed on the appeal.
- The transfer was registered on 16 September 2005 together with a restriction which read “No disposition of the registered estate other than a charge by the proprietor of the registered estate or by the proprietor of any registered charge is to be registered without a written consent signed by [Mrs. Thompson] or her conveyancer”.
- It would appear that before the appeal was disposed of, in August 2006 NFP was negotiating a sale of Mockbeggars to the Applicants (the Rogers) for £550,000. A draft one page deed of covenant, to be entered into between an unnamed prospective purchaser from NFP and Mrs. Thompson, was sent by NFP’s solicitors to Mrs. Thompson’s solicitors under cover of a letter of 15 August 2006. I do not need to set it out. It manifestly failed to correspond to the Deed contemplated by clause 15, and contained other drafting inaccuracies. Mrs. Thompson’s solicitors responded by letter of 30 August 2006 drawing attention to some, but not all, of the omissions and errors.
- There matters rested for two months. Meanwhile, there were negotiations between Mrs. Thompson, through her son-in-law, Mr. Slater, and Parkcrest Construction Limited, the parent company of NFP, for the release of the covenant in return for a cash payment. An offer of £40,000 was made by e-mail of 5 October 2006, which appears to have been rejected. I understand from Mr. Slater, who represented Mrs. Thompson at the hearing with considerable skill, that Mrs. Thompson had a mortgage of £80,000 which she wanted to be able to pay off, but she could only do so with money paid either pursuant to the covenant or in return for its release. A further e-mail to Mr. Slater on behalf of NFP suggested a meeting, but it appears that nothing came of that proposal. It also appears that Mr. Slater was complaining to Parkcrest at around this time that certain actions of Parkcrest may have jeopardised the likelihood of planning consent being obtained.
- By a letter dated 16 October 2006, NFP’s solicitors wrote to Mrs. Thompson’s solicitors, in response to their letter dated 30 August 2006, enclosing an amended Deed of Covenant, with the names of the purchasers omitted. There is no copy of that draft in the file.
- There was no response of any sort on behalf of Mrs. Thompson and no evidence as to the reason for this, although Mr. Slater surmised that it may have been because Mrs. Thompson was at this time looking to negotiate a cash settlement. The absence of any response appears to have been overlooked by both NFP’s solicitors and by the Rogers’ solicitors. Counsel for the Rogers confirmed at the hearing that it was not suggested that Mrs. Thompson’s silence was, or could properly have been construed as, indicating her consent.
- NFP’s appeal against the refusal of planning permission was dismissed, and Mrs. Thompson was notified by a letter dated 30 November 2006. Meanwhile, presumably shortly after the dismissal of the appeal, by a contract dated 28 November 2006, NFP agreed to sell Mockbeggars to the Rogers for £550,000, with completion to take place on 20 December 2006. Special condition 17 of the contract of sale provided that the Rogers would at completion covenant with Mrs. Thompson in the terms required by the Agreement dated 10 February 2005.
- Mrs. Thompson was made aware of the exchange of contracts and there were conversations between Mr. Slater and the Rogers and their solicitors. By letter dated 8 December 2006, the Rogers’ solicitors wrote to Mrs. Thompson’s solicitors referring to these conversations and asking for confirmation that on their submitting to them, following completion, a signed Deed of Covenant that Mrs. Thompson would not in any way attempt to withhold her consent. The letter went unanswered – there is a suggestion, without any evidence from Mrs. Thompson’s solicitors, that is may never have been received.
- Completion does appear to have taken place on 20 December 2006, without Mrs. Thompson being notified. On the same date, the Rogers signed a Deed of Covenant expressed to be between them and Mrs. Thompson which was in large measure, but not entirely, in terms contemplated by the Agreement of February 2005. Mrs. Thompson was defined as “the Covenantee”. Following six numbered covenants by the Rogers, the document contained the following provisions:
“1. The COVEANANTOR (sic) COVENANTS with the Buyer that she will give her consent to the registration of a disposition of the Property if the disponee enters into a deed with the Covenantee in the same terms as herein and the Covenantee shall have received the same from the disponee duly stamped with the appropriate Stamp Duty (if any)
2. The Covenantee hereby releases New Forest Projects from any future liability under the Agreement.”
- What purports to have been the original of this document was produced to me at the hearing. It consists of two typewritten sheets stapled together. Both sheets have six additional staple holes in them. The Rogers’ names and address, which is stated to be Mockbeggars, and Mrs. Thompson’s address are handwritten on the first page, as are the Rogers’ names on the second page. Although the document contains the covenants to which I have referred which are plainly intended to be by Mrs. Thompson, there is no provision for the document to be signed by Mrs. Thompson and no effort was made to obtain her signature.
- Although I have been asked to infer that the document was in the same terms as the draft Deed of Covenant, in the absence of either that draft or any explanation for the numerous additional staple holes in the two pages of the signed document, I am not satisfied that they were identical. The point is academic, however, and I have not based this decision on it.
- What is clear is that nobody bothered to inform Mrs. Thompson of this document at the time of its execution or to take any step to get her to sign it. Mrs. Thompson appears to have become aware by the middle of February 2007 of the sale to the Rogers, and, by letter dated 13 February 2007, she wrote to the Rogers’ solicitors pointing out that the wording of any deed should have been agreed with her, and she had not agreed the wording of such a deed. She asked for a copy of any deed of covenant signed by them, or to be informed if they had not signed so that they could arrange to move the matter forward. The Rogers’ solicitors then forwarded a copy to Mrs. Thompson’s solicitors, who in turn forwarded a copy to Mr. Slater.
- In purported compliance with the terms of the supposed Deed of Covenant they had signed, the Rogers then made a planning application in identical terms to the application which had been rejected the previous year. It is clear from their conduct that they wanted to use Mockbeggars as a home, as a commercial pottery and as a B & B. They do not appear to have had the slightest interest in obtaining planning permission, which would have involved them in an outlay to Mrs. Thompson of £170,000, and presumably in having to build a house to try to recoup that outlay. So far as they were concerned, £550,000 represented the market value of the property without planning permission.
- By letter dated 20 February 2007, Mrs. Thompson wrote, or at least signed, a letter to the Rogers that the application they had made was materially indistinguishable from the application submitted and appealed in 2006 and failed to address any of the grounds for the dismissal. She contended that they were therefore in breach of their obligations under the “Deed of Covenant” to use all reasonable endeavours to obtain planning permission. She stated that she would therefore withhold her permission for them to register their ownership until she was convinced that they meant to fulfil their obligations to her. At that stage she dispensed with the use of her solicitors.
- By letter dated 2 March 2007, the Rogers’ solicitors responded that the two matters were not linked and enclosed “the Deed of Covenant which is in the required format and which was originally produced to your Solicitor”. Mrs. Thompson responded that the document was not in a form agreed by her and complained of a lack of bona fides on the part of the Rogers in the way in which they had applied for planning permission. By letter of 15 March, Mrs. Thompson pointed out again that the document was not approved by her, and added that it contained several technical errors and omissions.
- In the absence of Mrs. Thompson’s consent, the Land Registry rightly refused to register the transfer to the Rogers, who then brought the present application pursuant to section 41(1) of the Land Registration Act 2002 to have the restriction disapplied in relation to the disposition by NFP to them.
- If NFP and the Rogers had fully complied with the terms of clause 15 of the February 2005 agreement, but Mrs. Thompson had simply refused to consent to the registration without any legitimate reason to do so, then I consider that the registrar ought to have disapplied the restriction in relation to the disposition. Mr. Slater, for Mrs. Thompson, has contended, however, that there are good reasons for her not so consenting.
- I reject his contention that Mrs. Thompson was entitled to refuse simply because she considered that NFP had not used its best endeavours to obtain planning permission. That is a matter which, if correct, would entitle Mrs. Thompson to claim damages from NFP for breach of contract. She has, however, covenanted that she would give her consent if the disponee, here the Rogers, shall have entered into a Deed in accordance with the provisions of clause 15.4 and she should have received that Deed from the disponee duly stamped with the appropriate Stamp Duty (if any). That covenant is not dependent upon NFP having performed any of its other obligations under clause 15.
- There is no suggestion that any stamp duty is payable in respect of the document relied on by the Rogers. The question, therefore, is (1) whether the Rogers have entered into a Deed with Mrs. Thompson in a form to be approved by Mrs. Thompson in the same terms as clause 15 or as nearly thereto as the circumstances allow and (2) whether she has received that Deed from the Rogers. Clause 15.4 also provides that Mrs. Thompson would in such Deed release NFP from any future liability under the agreements contained in clause 15.1.
- It seems plain that Mrs. Thompson never received the original “Deed” from the Rogers, as it was produced by their solicitors and handed to me at the hearing. There is no suggestion that it was sent to her and returned. It also appears to me that the terms of the document itself and of clause 15.4 contemplate that Mrs. Thompson should have been a party to the Deed and should execute it. I do not see how she could release NFP in the Deed if she does not execute it.
- Finally, there is no suggestion that Mrs. Thompson has approved the form of the Deed, and it is plain that there are a number of respects in which it is deficient. It does not provide for execution by her, and it is poorly drafted in a number of respects, including the use of the word “coveanantor” for Covenantee in the second paragraph numbered 1, and the omission of the words “or as nearly thereto as the circumstances allow” from that covenant. In addition, clause 6 does not provide that the new Deed is to be in a form to be approved by Mrs. Thompson, and the word “Seller” is used in recital 2 instead of “Covenantee”. Various other objections to the form have also been taken, and my failure to refer to them should not be taken as indicating that I consider that they are points that are wholly without merit.
- While it may well be the case, as counsel for the Rogers contended, that a court would have no difficulty construing the references to “coveanantor” and “Seller” as being to Mrs. Thompson, the drafting of the document is poor and Mrs. Thompson is entitled to have it corrected before approving it. Also, I am very doubtful whether the document which the Rogers have signed can bind them when Mrs. Thompson has not only not approved the document but, although named as a party and stated to give covenants in it, has not executed it.
- In all those circumstances, I am satisfied that the Registrar should not, without qualification, disapply the restriction in this case.
- Some of these points were dealt with in a new draft Deed of Covenant offered to Mrs. Thompson under cover of a letter dated 4 April 2008. The wording of that Deed, however, followed too closely the wording of clause 15 of the February 2005 agreement given the changed circumstances. As Mr. Slater pointed out, it was being offered over two years after the transfer which it was sought to register, but it still only involved a covenant by the Rogers to make the planning application “as soon as practicable but in any event within 28 days of the date of completion”, which had long passed. It also contained a provision, following clause 15, as to what would happen by way of an appeal in the event of the application being refused, when in fact the application had long since been refused and no appeal had been brought.
- Further, Mr. Slater also contended that, since moving in, the Rogers had acted in a way that would further impair the prospect of a future planning application succeeding. There was evidence to indicate that the Rogers were using the property as a commercial pottery (without planning permission) and as a B & B. This involved more intensive use of the property and, he said, bearing in mind the grounds on which he said that the local authority had refused the initial application by NFP, it was now less likely, because of the Rogers’ actions to date, that planning permission could now be obtained.
- I see the force of those contentions if the facts asserted by him, which were not all in evidence before me, were to be established. On the other hand I reject a further argument by Mr. Slater that I should refuse to disapply the restriction because the Rogers had acted in deliberate disregard of the covenants which they purported to give and of those which they did give, and because NFP had also been in breach of covenant. It does not appear to me that I should permit what was in effect bad conveyancing and drafting to put Mrs. Thompson in a better position than she would have been in had a proper Deed been prepared in the first place unless it were to prove impossible otherwise to put her in at least as good a position as if the Deed had been properly drafted, leaving her with no legitimate grounds for objection to its form.
- The agreement of February 2005 did not allow Mrs. Thompson to object to a transfer on the grounds that the new purchasers intended to act in breach of the covenants they were proposing to enter into, or on the grounds that NFP had been in breach of its obligations. It is said that Mrs. Thompson is an old lady of 82, suffering from cancer, who cannot afford to bring an action for damages for breach of contract against either NFP or the Rogers. That may be, and it may also be that such a claim, if brought, would have uncertain prospects of success both because of inadequate drafting of clause 15 and because it could transpire that whatever NFP or the Rogers might have done, they would not have obtained planning permission. I express no view as to any of these matters except that they are matters that ought to have been considered when the February 2005 agreement was drafted and that need to be considered in relation to any prospective action. They are not relevant in my judgment in considering what terms to impose on the Rogers if the restriction is to be disapplied.
- Equally, it does not appear right to me that the restriction should be disapplied unless there is now prepared and executed a Deed in proper form, to which Mrs. Thompson cannot legitimately object, which puts her in at least as good a position as she would have been in had everything been done properly in the latter part of 2006.
- Having discussed the possible forms that such a Deed might take, I directed that the Rogers’ counsel should prepare a first draft of such a Deed, and that Mr. Slater should then comment on it, with the Rogers having the right to respond to any suggestions, after which I would determine the form of the Deed, so as to take into account all legitimate objections made on behalf of Mrs. Thompson. As a condition of disapplying the restriction, the Rogers would have to execute a Deed in the form approved by me and send it to Mrs. Thompson, who would then need to execute it herself for it to become binding. Unless she did execute it and consent to the transfer being registered, the Registrar will be entitled to disapply the restriction in relation to this transaction.
- I have considered the draft Deed which has been submitted on behalf of the Rogers and the objections made by Mr. Slater on behalf of Mrs. Thompson. I do not propose to set it out at length, but only to consider what changes might be made to it.
- Recital (b) reads “The Buyers {i.e., the Rogers] have agreed to enter into this Deed in order to covenant with the Covenantee [i.e., Mrs. Thompson] in the same terms as the 2005 Agreement.” This is incorrect, as Mr. Slater has pointed out. They are not covenanting in those terms, but in terms which will leave Mrs. Thompson in at least as good a position as she would have been in had the February 2005 agreement been complied with from the beginning. I therefore consider that the recital should read
“(b) By clause 15.4 of the 2005 Agreement, New Forest Projects Limited covenanted with the Covenantee that upon any disposition of the Property or any part of it (including a Lease other than a Mortgage term) they would procure that the disponee of the same should enter into a Deed with the Covenantee in a form to be approved by the Covenantee in the same terms as Clause 15 of the 2005 Agreement or as nearly thereto as the circumstances should allow.
(c) In breach of that covenant, New Forest Projects Limited transferred the Property to the Buyers by a transfer dated 20 December 2006 but failed to procure that the Buyers entered into such a Deed.
(d) The Buyers have agreed to enter into this Deed to put the Covenantee in at least as good a position as she would have been in had they entered into such a Deed on 20 December 2006.”
- There follow definitions of “Application” and “Planning Permission” which are the same as those in clause 15 of the February 2005 agreement. Insofar as Mr. Slater has any issue with those definitions, the problems arise from the February 2005 agreement, and I am not willing to require that they be improved on.
- By clause 1 of the proposed Deed it is provided that “The Buyers warrant that as soon as practicable after 20 December 2006 but in any event by 17 January 2007 they submitted an Application to the local planning authority and thereafter pursued their application for Planning Permission and used all reasonable endeavours to procure the Planning Permission.”
- Mr. Slater objects to this provision on the basis that it is not true and would not be accepted and was in some way an attempt to get Mrs. Thompson to sign away any right to claim against the Rogers for their failure to in this respect. In fact the provision has exactly the opposite effect. By warranting that they have done this, they enable Mrs. Thompson to sue them for damages for breach of the warranty if they have in any way failed to do so. The warranty puts Mrs. Thompson in at least as good a position as she would have been in if they had made the promise in December 2006 which they ought to have made, and had then broken that promise. I therefore consider that this provision is appropriate, benefits Mrs. Thompson, and can stand.
- There follows an undertaking to indemnify Mrs. Thompson in respect of the losses (if any) which she may have suffered as a result of the Rogers’ failure to initiate and pursue an appeal against the refusal of the application which they made to the local planning authority. Mr. Slater complains about the use of the words “if any”, but it appears to me that the Rogers are entitled to seek to show that even if they had done everything that should have been done, no planning permission would have been granted, so that the failure to do so did not cause a loss to Mrs. Thompson. Again, this is not, as Mr. Slater appears to fear, a provision to “mitigate any legal action for specific performance”. Without this Deed, there would be no legal action against the Rogers, but they would be unable to register their title. The only legal action would be against NFP under the February 2005 agreement or any equivalent covenants included in the subsequent conveyance to that company.
- However, this clause appears to me to be a somewhat watered down version of clause 15.3.2 of the February 2005 agreement, which requires the rigorous pursuit of the appeal and the use of best endeavours to be successful in such appeal. I therefore consider that clause 2 should be amended to add at the end (following the wording of clause 15.3.2 “and to rigorously pursue the same and use their best endeavours to be successful in such appeal.”
- Clause 3 of the draft Deed provides for a new Application to be brought by the Rogers. Mr. Slater objects to this clause on the basis that it does not provide for the Rogers to employ an independent planning consultant and for Mrs. Thompson to be given the right to assess and comment on the planning application. There is obvious merit in both these steps being taken in practice, but there is nothing in the February 2005 agreement which imposes any such requirement. The Rogers’ agreement to bring a fresh application (voluntarily tendered by them at the hearing) is a plain attempt to mitigate any damage caused by their original failure to make any serious application or to pursue any appeal. It may also, if pursued seriously, provide some indication of what may have happened if a real attempt had been made to obtain planning permission at the beginning of 2007. However, I am not willing to impose on them duties which go beyond what they ought to have agreed to in December 2006 by spelling out what steps they ought to take in now seeking planning permission.
- In any event, the duty to keep Mrs. Thompson regularly informed of the progress of the planning application and any appeal (clause 5 of the draft deed) and her right to inspect any application should leave her able to make comments on it to the Rogers if she sees fit.
- Mr. Slater has then highlighted references to Mrs. Thompson, her solicitors or personal representatives/successor. I am not clear what Mr. Slater’s objection is to this wording, but it appears to me that it covers the situation until 2040, and is designed to deal with the situation following the death of Mrs. Thompson, or indeed her ceasing to have solicitors acting for her. It appears to me that the appropriate wording in clause 7 would be “shall notify the Covenantee’s solicitors or her personal representatives or their solicitors and pay to them within 28 days (in the case of Solicitors as agent for the Covenantee or her personal representatives) the further sum of £170,000.”
- In clause 8 the appropriate wording would appear to be “without a written consent signed by the Covenantee or her personal representatives or her or their conveyancer.” Mr. Slater appears to be suggesting that some further amendment is required, but has not spelled out what amendment he is seeking
- Clause 9 should in my judgment reproduce clause 15.4 without any changes, apart from the necessary changes in the references to the parties as Buyers and Covenantee and to the final line of the Clause referring to this Deed of Covenant. I do not consider that the Rogers should use this Deed to improve the clause in their favour by introducing the reference to approval not being unreasonably withheld. It should be redrafted accordingly. In response to Mr. Slater’s comment that this Deed should supersede Clause 15 entirely, that would not appear appropriate to me, because it contains special clauses to compensate for the previous failure to comply with clause 15, which would be inappropriate on a future sale, when one would hope that this problem would not occur.
- Clause 9 should therefore read from line 4 “with the Covenantee in a form to be approved by the Covenantee in the same terms as Clause 15 of the 2005 Agreement or as nearly thereto as the circumstances allow and the Covenantee will in such Deed release the Buyers from any future liability under this Deed.”
- In relation to Clause 10, it appears to me that the covenant should provide for the Covenantee’s consent “if the disponee enters into a deed with the Covenantee or her personal representatives in the terms provided for by Clause 9 hereof and the Covenantee or her personal representatives shall have received [etc.]”.
- Mr. Slater has raised general concerns about the proposed Deed. The first concern relates to damage caused by the Rogers’ actions to the prospect of obtaining planning permission in the future. It seems to me that this is met by the right of action for breach of the warranty that a proper application was made in the first place and the indemnity for not pursuing the appeal against the refusal of the application that was made. If the prospect of obtaining planning permission in the future has been impaired by the Rogers’ actions, then any damages under clauses 1 and 2 of the proposed Deed would take that into account.
- Mr. Slater also refers to the lack of will on the part of the Rogers to obtain planning consent. There may well be a lack of will, but that was also the case in December 2006. It does not appear to me that Mrs. Thompson can object to a properly drawn obligation on the ground that she doubts that the Rogers will want to perform it. If they do not, and she can demonstrate this on the balance of probabilities, then she can claim damages from them. However, it does not appear to me that the February 2005 agreement prevents a sale to a person who does not really want to pursue a planning application provided that that person covenants in the appropriate terms with Mrs. Thompson.
- Thirdly, Mr. Slater refers to what he describes as a taught principle of contract that when one enters into a contract one should consider the ability of the person to fulfil the obligations it imposes. That is true, as a matter of prudence, when one’s hands are free. But in this case Mrs. Thompson agreed the terms in clause 15 of the February 2005 agreement which oblige her to consent provided the wording of the document is approved by her. Further, I am now considering whether to direct the Chief Land Registrar to disapply a provision of the Land Registration Act, and if so, on what terms. In that context, I am setting out those terms. Mrs. Thompson will not be obliged to agree the terms I set out. If she does, then she will be bound by them. If she does not, then she will not be bound by them, and will have no agreement of any sort with the Rogers. But in the latter circumstances, or if she entered into the agreement but failed to consent to the Rogers being registered, I would direct the Chief Land Registrar to disapply the restriction.
- If Mrs. Thompson does not execute a Deed in the form which I approve, then I would propose to direct the Chief Land Registrar to disapply the restriction. This would leave her with a claim for damages for breach of contract against NFP, although that claim may be met with a defence that she failed to act reasonably to mitigate her loss by entering into to Deed which I am approving.
- A further question which Mr. Slater has raised is that Mrs. Thompson can have no confidence as to the ability of the Rogers to pay the £170,000 should the planning application succeed. That may be, but it is something that should have been provided for in the February 2005 agreement.
- I circulated a draft of this decision to the parties expressly (a) for correction of any drafting errors in the Deed I am directing, (b) for comments on the timing of the directions to be given to the Registrar taking into account such matters as the health of Mrs. Thompson and any other factors that may cause delay and (c) to enable the Applicants to provide a draft Deed in the form which I am directing to be annexed to the order which I shall make. I made it plain that it was not to be taken as an opportunity to re-open any argument or present any new argument going to the merits of the application as a whole. Despite this, and contrary to my express directions, Mr. Slater used the opportunity to present lengthy arguments as to defects in the draft decision. I have not been persuaded by his arguments, and saw no need to copy them to the Rogers, or to deal with them in detail in this decision. If Mr. Slater is dissatisfied with the decision, his appropriate course is to seek permission to appeal, not to seek to re-argue his case before me, and he has indicated that he would immediately appeal should I reach the decision indicated in the draft.
- That last observation sits somewhat uneasily with one of his two main grounds for attacking my draft, namely that Mrs. Thompson cannot afford to sue the Rogers. In terms of costs, I fail to see how she cannot afford to sue the Rogers for a clear breach of warranty, but can afford an appeal, in respect of which she would be liable for the Rogers’ costs should it fail. Even, however, if she cannot afford to sue, that it a matter which should have been considered before she agreed to give consent to a transfer subject to a deed of covenant in the proper form being entered into. If it had been entered into without any intention of performing it, and then broken, then she would again have had no remedy unless she had been prepared to take legal action.
- Neither do I accept Mr. Slater’s contention that the conduct of the Rogers is such that the restriction should not be disapplied, as they have no intention of performing any covenant they may make and have in any event made it far more difficult for planning permission to be obtained. That would, in effect, leave them hostages to Mrs. Thompson, even though there has been no proper investigation in this reference of the question whether there was ever any prospect of planning permission being obtainable by them. It does not appear to me that it would be right in all the circumstances for them to be left in this position, or that Mrs. Thompson should be able to refuse her consent to the registration of their title, whatever covenants they may now be willing to enter into.
- Following receipt of my draft decision, the solicitors for the Rogers have supplied an amended draft Deed which appears to me to include the changes from their earlier draft which I set out above. I have made one small amendment to that draft Deed in the last line of clause 8 where “representative” should read “representatives”.
- I therefore propose to direct the Chief Land Registrar as follows:
(1) He is to give effect to the Rogers’ application to disapply the restriction if, and only if, by 30 September 2008 the Rogers have executed and submitted to Mrs. Thompson for execution a Deed in the form of that draft as approved by me, which will be annexed to the order which I shall make and by 14 October 2008, or such later date as the Chief Land Registrar may think fit, Mrs. Thompson has failed to consent to the registration of the Rogers pursuant to the transfer of 20 December 2006. For completeness in this respect, it open to Mrs. Thompson to execute the Deed or not as she chooses. If she does not do so, then she will not be able to enforce it against the Rogers, and will be left to such remedy as she may have against NFP.
(2) I have allowed for a later date for Mrs. Thompson’s consent only to allow for the possibility that she may be too unwell to give consent within the 14 days allowed, but that is not intended to preclude the Chief Land Registrar from granting an extension of time on other grounds that appear to him to be good ones.
(3) If the requirements in (1) above are not satisfied, the Chief Land Registrar is to refuse the application to disapply the restriction.
Permission to appeal
- Mr. Slater’s representations as to the alleged errors in my draft decision are accompanied by an assertion of an intention to appeal my decision. I am not satisfied by those representations that there is any arguable ground of appeal, and I refuse permission to appeal. It is open to Mrs. Thompson to apply to the Chancery Division of the High Court for such permission.
Dated this
8th day of September 2008
By Order of The Adjudicator to HM Land Registry
