Alan Gregory Freeman & Ors being the Trustees of the Lady Belinda Gadsden’s 1997 Children’s Settlement v Home Farm Ellingham Limited

A contractual obligation to procure highway adoption remains binding unless the contract is rescinded or rectified. A common mistake does not render an individual contractual term void. Estoppel requires a clear representation, reasonable reliance and detriment.

Specific performance may be refused where cogent and unequivocal evidence establishes that performance is impossible. A claimant cannot reformulate a singular contractual obligation and seek specific performance of only part of it without an appropriate pleaded claim. Where equitable relief is unavailable, damages at common law remain possible, but the claimant must plead and prove the loss. On the evidence and pleadings, only nominal damages were recoverable.

The trustees sold land containing a residential development to the defendant. The transfer required the defendant to procure adoption by Northumberland County Council of the estate roads and granted the trustees a power of attorney to enter adoption documents if necessary.

The defendant constructed the development but the roads remained private. The trustees sought specific performance, alternatively damages. The defendant argued that the covenant was unenforceable because of common mistake or estoppel, that the trustees’ power of attorney displaced its liability, and that adoption was impossible. The central issues were the validity and scope of the covenant, the effect of the power of attorney, the availability of specific performance, and the recoverable damages.

1. Validity of the covenant. The transfer was valid and effective. The alleged common mistake did not make paragraph 6 of Schedule 3 void. Common mistake operates, if established, on the contract as a whole at common law, while equity may provide rectification. Neither rescission nor rectification had been pleaded or sought. In any event, the alleged mistake did not make the transfer or its performance essentially and radically different from the parties’ assumption.
2. Estoppel. The representations made by the claimant’s agent to the council were not communicated to the defendant. Nor did referring to the planning permissions constitute a clear representation of an existing fact or existing law. The unpleaded estoppel advanced for the first time in closing submissions was also rejected.
3. Power of attorney. The power permitted the claimant to execute documents necessary to enter an adoption agreement. It did not permit the claimant to undertake works, vary planning permission, serve a notice under section 37 of the Highways Act 1980, or pursue related magistrates’ court proceedings. It was permissive, not mandatory, and the claimant’s decision not to use it did not release or reduce the defendant’s liability.
4. Impossibility and relief. Northumberland County Council had consistently refused adoption because of defective geometry and layout, absence of a two-metre service strip, and lack of wider public utility. Those objections were supported by the council’s policy and evidence. The court did not require every conceivable procedural step to be taken where cogent and unequivocal evidence already established impossibility. Specific performance and damages in lieu were therefore refused.
5. The unpleaded alternative request for adoption of only part of the roads was misconceived. It sought to reformulate a single contractual obligation and enforce the reformulated obligation without rectification or a proper opportunity for the defendant to respond.
6. The defendant was in breach and the claimant was entitled to damages at common law. The damages claim was not properly supported by admissible expert evidence. The claimant therefore recovered nominal damages of £1.

First-instance judgment. No appellate history was stated in the judgment.