By Jatinder Kandola
Borneo Martell Turner Coulston
IN Jones v Oven 2017 EWHC 1647(ch) a court construes a property sale and purchase agreement to mean what the parties intended to say rather than what it actually said.
The court was asked to determine issues arising out of a neighbour dispute concerning a strip of land 4m in width.
Mr and Mrs Jones (the farmers) sold parcels of their to a residential property developer. The strip of land had been part of a parcel of land sold and transferred by the farmers to the property developer for the purposes of residential development. The contract provided that if the barn on the land transferred was ever demolished, the property developer or their successors in title would retransfer the aforementioned strip of land to the farmers. The farmers entered into restrictive covenants binding their remaining farmland, that it would not be used in ways that would adversely affect the use and enjoyment of the development land for residential purposes.
The Ovens, the successor in title to the property developer, bought the house closest to the farmers. When the barn was demolished, the Ovens became subject to the obligation to transfer the strip back to the Farmers. Whilst the contract provided for the reconyeyance of the strip of land it failed to provide that that strip of land once reconveyed would be subject to the same restrictive covenants for the benefit of the residential development.
The farmers brought proceedings for specific performance and damages. One of the main issues to be considered was whether the strip of land once reconveyed would be subject to restrictive covenants not to use the land so as to become a nuisance to the residential house owners. The evidence showed that the farmers had started to use the strip of land to keep pigs to which the Ovens objected.
The judge ordered that the strip of land would be transferred subject to the same covenants in order to give business efficacy to the transaction.
The case is of interest because it is a rare example of the court construing an unambiguous contract other than in accordance with its actual meaning. The court held that the parties would not be bound by literal meaning of an unambiguous contract if that would give rise to absurdity. It illustrates well the application of the test of “necessity” in relation to implied terms of contracts. The contract could have been performed in accordance with its literal meaning. The contract was far from unworkable. Instead the court was involved in this case, in interpreting the agreement not which was actually made but rather what was intended between the parties.
