Churchill v Temple and others

Land — Restrictive covenant – Successors in title — Claimant acquiring building plot subject to restrictive covenants imposed by original vendors — Vendors dying — Whether provisions in covenants requiring vendors’ approval including vendors’ successors in title — Whether covenants being discharged or becoming absolute on death of original vendors — Declarations grantedThe claimant acquired a plot of building land that had originally been conveyed by S (the vendors) to purchasers in 1967. At that time, the plot was described as a building plot and the plan accompanying the conveyance included the outline of a proposed house that was subsequently built. The plot included an entrance drive that ran between the vendors’ property and a next-door property.Pursuant to the conveyance, the purchasers and their successors covenanted that no dwelling-house would be erected or maintained on any part of the land conveyed without the written approval of the vendors or their surveyor. They also covenanted not to make any structural alteration or addition to a permitted dwelling-house without the written consent of the vendors or their surveyor.Later in 1967, the vendors sold their property to a third party, who sold it on to the first and second defendants in 1995. The claimant subsequently acquired the building plot and wanted to demolish the existing house and erect a new one. The vendors died in 2002 and 1989 respectively. The claimant applied to the court for declarations concerning the enforceability, meaning and effect of the restrictive covenants in the conveyance.The court was asked to decide whether: (i) the requirement in the conveyance for the approval or written consent of the vendors or their surveyor should be construed as including their successors in title or their respective surveyors; and if not, (ii) the effect of the vendors’ death was to free the purchasers or their successors from the need to obtain consent or to make it impossible for them to obtain such consent so that the prohibitions contained in the relevant clauses of the conveyance became absolute covenants against new building or alterations of an existing building.Held: Declarations were granted.(1) In deciding whether the restrictive covenants were to be construed as requiring the vendors’ successors in title consent, it was important to bear in mind that the issue of construction arose long after the contract was entered into and between parties who were not the original parties to the contract. The court should not allow its perception of the commercial realities to override the clear language on the conveyance. Where the parties to the agreement were not parties to the claim, one had to assume that those parties took into account reasonably foreseeable contingencies. Further, it was always necessary to keep in mind the position of both parties. It was not sufficient to just to consider what the vendor might have wanted to achieve: Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1) [1998] 1 WLR 896 and City Inn (Jersey) Ltd v Ten Trinity Square Ltd [2008] EWCA Civ 156; [2008] 10 EG 167 (CS) considered.In the instant case, reading the covenants in accordance with their literal terms, which restricted the right to withhold consent to their original vendors, made good sense. Thus construed, the covenants represented a reasonable balance between both parties’ interests, in circumstances in which the vendors would want to retain control to protect the value of their property but the purchasers would not want to have an indefinite restriction. Further, the structure of the provisions in question suggested that what the parties had in mind was control in the short term over the initial building. Essentially, those provisions were designed to operate in the short term to prevent an inappropriate house being built or, once built, inappropriately altered to circumvent some earlier objection. In all the circumstances, the term “the vendors” in the relevant provisions meant only the original vendors and not their successors in title: Mahon v Sims [2005] 3 EGLR 67; [2005] 39 EG 138 and Margerison v Bates [2008] EWHC 1211 (Ch); [2008] 3 EGLR 165 considered.(2) With regard to the effect of the vendors’ death, the court was not bound by the decision of the Court of Appeal in In re Beechwood Homes Ltd’s application [1994] 2 EGLR 178; [1994] 28 EG 128 to hold that, on the proper construction of the covenants, the vendors’ death made the prohibition in the restrictive covenants absolute. In all the circumstances, on the proper construction of the conveyance and applying commercial common sense, the provisions in question had been discharged by the vendors’ death: Crest Nicholson Residential (South) Ltd v McAllister [2002] EWHC 2443 (Ch); [2003] 1 EGLR 165 followed, In re Beechwood Homes distinguished.Lawrence Power (instructed by Fisher Meredith) appeared for the claimant; Andrew Davies (instructed by Boyes, Sutton & Perry, and BK Ellis & Co) appeared for the defendants.Eileen O’Grady, barrister