Dowty Boulton Paul Ltd v Wolverhampton Corporation [1971] 1 WLR 204

Court: Court of Appeal

Facts: In 1936, Wolverhampton Corporation conveyed land to Dowty Boulton Paul Ltd for the construction of an aircraft factory, including a right to use the municipal airport for 99 years or as long as the corporation maintained it—whichever was longer. The conveyance included covenants requiring the corporation to keep the airfield licensed and operational. In 1970, the corporation decided to let the airfield license expire and develop the site into a housing estate. Dowty Boulton Paul Ltd sought a legal declaration that the corporation was obligated to continue maintaining the airfield and an injunction to prevent the termination of the license.

Issue: Whether Wolverhampton Corporation could be compelled to maintain the airfield and whether an injunction could be granted to prevent the termination of the airfield license.

Held: The Court of Appeal held that a public authority, by exercising statutory powers, can create rights that extend over a specified term. The court acknowledged that such rights might limit the authority's ability to exercise other statutory powers in a manner inconsistent with those rights. The covenants in the conveyance imposed obligations on the corporation to maintain the airfield and obtain necessary licenses. The corporation's decision to terminate the license and pursue housing development raised questions about the validity of their actions under their statutory powers as a housing authority.

The court decided that granting an injunction was appropriate to protect Dowty Boulton Paul Ltd's rights until a full trial could determine the scope of the corporation's obligations and powers. This decision highlighted the need to balance protecting contractual rights with the statutory powers of the public authority.

Key Judicial Statement: The court noted that statutory powers could create binding obligations that persist over time and limit the exercise of other statutory powers. The case underscored the judiciary’s role in resolving conflicts between statutory authority and established rights through equitable remedies like injunctions.

💡Leveluplaw: This case illustrates the complex interplay between statutory powers and contractual rights. It shows how public authorities must navigate the limits imposed by statutory covenants and the potential need for injunctive relief to uphold established rights. The court's approach highlights the importance of balancing the protection of contractual rights with the proper exercise of statutory functions, setting a precedent for similar disputes involving public authorities and statutory obligations.