The Royal Exchange is a Grade 1 listed building. The claimants (the Corporation of London and the Mercers Company) are the trustees of the Gresham Trust and the registered proprietors of the Royal Exchange. Opposite the Royal Exchange was the head office of Lloyds Bank. On 24 October 1928 the claimants and Lloyds executed a deed relating to the height of their respective buildings.

In May 2002, IVG Asticus Real Estate Ltd purchased the Lloyds Building that was now a listed Grade II building. IVG intended to develop the building along with other adjacent sites. IVG obtained planning permission and Listed Building Consent in August 2004. The planned buildings were at various points, higher than what was then thought to be permitted by the deed.

The deed provided that the Royal Exchange and Lloyds respectively would not erect any new building or buildings that would exceed the height indicated on the attached drawing. There was also a mutual covenant that the respective parties would not at any time after the date of the deed heighten, alter, reconstruct or rebuild their respective buildings in any way to contravene the heights shown on the attached drawing. The attached drawing showed the facade of the two buildings and specified two heights: (1) 80 ft to the pediment, and (2) 108 ft 3” to the top of the facade and 75° from the outside edge of the pediment to the top of the facade.

IVG’s proposed new building would exceed 108 ft 3” in height. Before the parties agreed on the effect of the deed, IVG commenced demolition work. Doing this gave rise to an obligation as a result of the conditions attached to the grant of planning permission to construct the new building in accordance with the plans.

On the true interpretation of the deed, was IVG entitled to erect any building to a height of more than 108 ft 3”?