Juan & Ors v Allen & Anor

A declaration may be granted although the relevant future events have not occurred, provided they are sufficiently likely to occur within a reasonable timescale or there are sensible practical reasons for granting relief. Declaratory relief is not governed by the same test as a quia timet injunction. The central question is whether the declaration would serve a useful purpose, with regard to whether the issues are sufficiently defined and properly justiciable. A building scheme requires identifiable land, reciprocal obligations between purchasers, and restrictions imposed pursuant to a general scheme of development.

The claimants owned two plots in a residential development and alleged that all plots were subject to a building scheme. The defendants owned another plot and had obtained planning permission to replace one house with four new dwellings, potentially breaching a restrictive covenant limiting use to one private dwelling house.

The claimants sought a declaration that the building scheme bound the defendants and an injunction. The defendants applied for summary dismissal on the basis that the claim was premature, or alternatively for a stay pending an intended application to the Upper Tribunal under section 84 of the Law of Property Act 1925. The issues were whether declaratory relief would serve a useful purpose and whether the claimants could establish the building scheme.

1. Summary judgment. The defendants had no real prospect of successfully defending the claim for the declaration. Summary judgment was therefore entered for the claimants.
2. Declaratory relief. The court rejected the proposed general rule that a declaration must be refused where relevant facts had not yet occurred. Whether facts were hypothetical depended on fact and degree. Declaratory relief and a quia timet injunction were governed by distinct principles. The appropriate questions were whether the claim was premature, whether the declaration would serve a useful purpose, and whether the issues were sufficiently defined to be properly justiciable.
3. The defendants’ planning permission and settled intention to apply to the Upper Tribunal demonstrated that the dispute required resolution. Determining the existence of the building scheme would clarify the parties’ position and assist the future Tribunal proceedings. The claim was therefore neither premature nor unnecessary.
4. The possibility of inconsistent decisions did not justify refusing relief. Section 84(5) of the Law of Property Act 1925 would make the declaration binding on persons entitled to the benefit of the restriction. Although later inconsistent decisions between plot owners remained theoretically possible, that risk was insufficiently strong to outweigh the usefulness of deciding the issue.
5. Building scheme. The principles in Elliston v Reacher [1908] 2 Ch 374 and Jamaica Mutual Life Assurance Society v Hillsborough Ltd [1989] 1 WLR 1101 were satisfied. The common vendor, common form transfers, identified land, reciprocal covenants benefiting all plots, and registration of the covenant established the scheme.
6. The defendants’ applications to decline jurisdiction and for a stay were refused. The declaration sought by the claimants was granted.