Purchasers making offer to buy property and instructing defendant solicitors – Defendant discovering existence of covenants and informing purchasers – Completion – Purchasers planning alteration of property – Neighbour claiming to be entitled to benefit of covenant restricting alteration – Neighbour obtaining injunction against alteration – Whether defendant had given negligent advice in relation to covenants – Whether covenant was plainly unenforceable – Judgment for the plaintiffs
The plaintiffs wished to purchase a house, offered £490,000 and instructed the defendant to act for them. The defendant received from the vendors’ solicitor a draft contract together with, inter alia, copies and photocopies of an indenture of July 14 1919 and of a transfer of February 29 1956 which both contained restrictive covenants. The defendant informed the plaintiffs that there were restrictive covenants affecting the property and sent them copies, although the old fashioned copy of the indenture was almost impossible to decipher. The indenture was a conveyance of a plot comprising 4 acres and included a covenant by the purchasers in relation to properties to be built on the land. Subsequently, by the 1956 transfer, a small plot of the land was transferred, on which the plaintiff’s property was later erected, and a covenant given in clause 4 prohibiting the owner of the plot from altering the property, once erected, save in accordance with plans previously approved by the vendor or its successors in title.
Shortly after completion the plaintiffs decided to make substantial alterations to the exterior of the property and builders were engaged. The plaintiffs then received a letter from a neighbour who objected to the plans and claimed to be entitled to the benefit of the covenant. The neighbour obtained an injunction restraining the plaintiffs from making any alterations without approval. The plaintiffs issued proceedings claiming that the defendant had been negligent in his advice concerning the effect of the restrictive covenant.
Held Judgment was given for the plaintiffs.
1. If a solicitor became aware in the course of a conveyancing transaction that property appeared to be the subject of a restrictive covenant, unless satisfied that the covenant was plainly unenforceable, he must explain to his client the nature and effect of the covenant, the risk that the covenant might affect the saleability of the land, and, in an appropriate case, the risk that the covenant might imperil any scheme for the development or redevelopment of the land and the steps available to the client to avoid or mitigate that risk by obtaining release or modification of the covenant , or by insurance or otherwise.
2. The covenant was not plainly unenforceable and the defendant therefore had failed in his duty to inform the plaintiffs. No request had been made for a legible copy of the 1919 indenture, nor any attempt made to improve the existing copy. The defendant had failed to notice the effect of clause 4 and consequently had not advised the plaintiffs, as it should have done, of the very real possibility that the person entitled to the benefit of the covenant might be entitled to object to any alteration to the property unless written consent to the plans had been obtained.
Leslie Michaelson (instructed by Withers) appeared for the plaintiffs; Simon Burrell (instructed by Cripps Harries Hall, of Tunbridge Wells) appeared for defendant.
