Williams v Williams

A user covenant must be construed by reference to the character of the permitted use at the material date. Sales of tobacco or confectionery may be ancillary to a general store, but become prohibited when they amount to a separate trade or business. The point at which that boundary is crossed is ordinarily a question of fact. In determining the terms of an injunction, the court may prefer evidence directed to the historical meaning of the covenant over an expert report that addresses a different date or cannot translate turnover into a practical restriction. An appellate court will not interfere where the judge’s approach is principled and supported by the evidence.

The claimants operated a confectioners, newsagents and tobacconists business next to the defendant’s supermarket. They sought to enforce user covenants restricting the neighbouring premises to use as a grocery and general store and prohibiting use as a tobacconist or confectioner.

The High Court held that the covenants were enforceable under a building scheme and that the defendant’s sales breached them. The Court of Appeal upheld those conclusions on 21 November 2002 and directed further case management concerning the permitted quantity or manner of tobacco and confectionery sales. On 19 December 2003 the High Court imposed restrictions by reference to display space. The defendant appealed against the restriction on tobacco display. The central issue was whether the restriction was excessive or unsupported by the evidence.

1. Appeal dismissed. The appeal was dismissed unanimously, with costs summarily assessed.
2. The earlier decision in the same litigation established that the relevant boundary was determined by the character of a general store as understood in November 1963. The covenant permitted some ancillary tobacco sales, but prohibited sales on a scale amounting to a distinct trade or business. The fact that premises might still qualify generally as a general store did not prevent the specific prohibition from operating once the separate-trade threshold was crossed.
3. The location of that boundary was essentially a question of fact. The judge had previously considered the evidence about the nature and scale of the defendant’s tobacco business and had concluded that it went beyond a general store selling tobacco incidentally.
4. For the purpose of framing the injunction, the judge was entitled to prefer that evidence and his resulting findings over the expert report. The report did not address the essential question: the maximum permissible level of tobacco sales ancillary to a general store as understood in 1963. It also could not reliably relate the proposed shelf-space restriction to the turnover-based threshold from which the expert had begun.
5. The judge was therefore entitled to use display space as practical guidance, rather than turnover, and to adopt a restriction based on the evidence before him. His approach could not be criticised on any principled ground and was not impermissibly broad-brushed. The Vice-Chancellor observed that the expert report might assist in assessing damages, but expressly did not decide that it would do so.

The order restricting tobacco display was upheld. The respondents’ costs were summarily assessed at a sum fractionally exceeding £6,000, payable within 14 days.

• Court of Appeal (Civil Division): [2004] EWCA Civ 870. Appeal against paragraph 2 of the High Court order dated 19 December 2003 dismissed.
• High Court, Cardiff District Registry: His Honour Judge Moseley QC imposed restrictions on the defendant’s tobacco and confectionery display following earlier findings of breach.
• Court of Appeal: On 21 November 2002, the court upheld the enforceability of the building scheme and the finding that the defendant’s use breached the covenant, but directed further case management concerning the permitted quantity or manner of sales.
• High Court: The building-scheme issue was determined on 27 June 2001, and the breach issue was determined on 28 January 2002.