Wellington Properties Ltd v Second Duke of Westminster, Trustees of the Will of & Anor

In construing a transfer, the court must read the document as a whole and seek, where possible, to avoid inconsistency between its provisions and the transaction’s purpose. Where part of a standard clause is inapposite, that may support the conclusion that another part is poorly drafted. A construction producing surprising consequences, inconsistent with the transfer’s expressed purpose, may be rejected where an alternative construction is available without doing violence to the language. A reference to “adjoining properties” may therefore be construed as referring to adjoining buildings where the wider document and its purpose require that meaning.

The defendants appealed from an order of His Honour Judge Bailey in the County Court at Central London dated 8 December 2017. The order declared that the flank wall of 39 Headfort Place adjoining Halkin Street Garden was a party wall under section 38(1) of the Law of Property Act 1925 and section 20 of the Party Wall etc Act 1996.

The property had been transferred to Lady Rees in 1990 pursuant to enfranchisement under the Leasehold Reform Act 1967. Clause 3(b) stated that the walls and fences separating the transferred property from adjoining properties were party walls or fences. The central issue was whether “adjoining properties” included the adjoining garden, so that the garden wall was deemed to be a party wall.

1. Appeal allowed. The natural meaning of “adjoining properties” supported the claimant’s construction, but the transfer had to be construed as a whole.

2. The plan showed the garden wall entirely within the curtilage of 39 Headfort Place. That was consistent with the purpose of the transfer, which was to enfranchise the whole house. Construing clause 3(b) as making the garden wall a party wall was therefore inconsistent with both the parcels clause and that purpose.

3. The defendants’ construction, treating “adjoining properties” as “adjoining buildings”, avoided that inconsistency without using “property” in two different senses within the clause. The transfer used “property” to describe land with a building on it, and elsewhere distinguished between buildings and land.

4. The fact that the clause also referred to fences was significant. There were no fences, so that part of the clause was inapplicable and ineffective. In those circumstances, the court should be readier to accept that another part of the clause was poorly drafted.

5. The alternative construction did not deprive clause 3(b) of effect. It confirmed that the walls between 39 Headfort Place and the neighbouring houses were party walls and required them to be maintained and repaired as such.

6. The claimant’s construction also produced surprising consequences, including Grosvenor being required to maintain half of a wall that had previously been the tenant’s responsibility, Lady Rees failing to acquire the whole house which the transfer was intended to enfranchise, and Grosvenor potentially being able to block windows in the garden wall. Those consequences were unlikely to have been intended.

7. Clause 3(b) therefore applied to adjoining buildings, not to the garden. The County Court declarations were set aside by allowing the appeal.

• High Court (Chancery Division): appeal allowed against the order of His Honour Judge Bailey dated 8 December 2017.
• County Court at Central London: declared that the flank wall of 39 Headfort Place was a party wall under section 38(1) of the Law of Property Act 1925 and section 20 of the Party Wall etc Act 1996.