Hughes Family Property Co Ltd & Anor v No Defendant

A claim for declaratory relief should not ordinarily proceed without a defendant where identifiable persons may have an interest in enforcing the relevant restriction. Their apparent lack of opposition must be established by them, rather than assumed by the claimant. A claimant cannot avoid joining potentially interested parties merely because it considers its case to be unanswerable.

Where non-parties will not be bound by the decision, the court must also consider whether the declaration would serve any useful purpose. The discretionary nature of declaratory relief means that failure to notify persons with a relevant interest may itself weigh against granting permission.

Two companies applied under CPR rule 8.2A for permission to continue a CPR Part 8 claim without naming a defendant. The claim sought a declaration under section 84(2) of the Law of Property Act 1925 that a restrictive covenant affecting residential land was not binding.

The applicants said that the original covenantee had been dissolved or had expressed no opposition. They had not, however, approached the owners and occupiers of neighbouring properties who might have an interest in enforcing the covenant. The issue was whether the claim was an appropriate case for proceeding without a defendant.

1. Application dismissed. The claim was not an appropriate case for proceeding without a defendant under CPR rule 8.2A.
2. The court accepted that the dissolved mortgagee company and its discharged liquidator did not appear to have a sufficient present interest. That did not establish that no successor in title or other person had an interest in the covenant.
3. The owners and occupiers of Nos 21–27 Redwells Meadow were obvious potential defendants because they might seek to enforce the covenant. The available evidence was incomplete, including missing conveyances and uncertainty about when the original purchaser acquired its interests. The applicants could not assume that the owners’ cases would be futile or identical.
4. The court also noted that the building-scheme doctrine, equitable interests and questions of notice might arise. Nothing in the judgment determined those issues.
5. As a general rule, a decision binds only the parties, subject to recognised exceptions such as representation and notice procedures. The neighbouring owners would not ordinarily be bound if they were not parties, making the utility of a declaration questionable: Vandervell Trustees Ltd v White [1971] AC 912.
6. A declaration is discretionary. The possible failure to notify persons with something relevant to say could therefore be a factor against granting declaratory relief: Bank of New York Mellon v Essar Steel India Ltd [2018] EWHC 3177 (Ch).
7. The claim could nevertheless continue if the owners and occupiers of Nos 21–27 confirmed in writing that they did not oppose it, or if they were served with the claim form, evidence and usual response pack.

First-instance application dealt with on paper. No earlier decision or appeal was stated in the judgment.