Clause in conveyance did allow retrospective modification of restrictive covenant

A 1947 conveyance contained a provision which allowed a restrictive covenant to be varied such that more than one dwelling could be constructed on a piece of land. In Cheung and others v Mackenzie [2023] EWHC 220 (Ch) Mr Justice Miles held on appeal that the first instance refusal to declare that the wording of a 1947 conveyance permitted an estate owner to retrospectively modify restrictive covenants imposed in the conveyance was incorrect. 432 and 444 Selsdon Road, South Croydon, were each detached properties that had formed part of a larger estate. When 444 had been conveyed in October 1947, 432 was still part of that estate. The 1947 conveyance included a restriction that there would only be one dwelling house on 444, but also contained the reservation that [the owners of the estate] “reserve the right to deal with any of the plots situated upon this estate or any of their adjoining or neighbouring land without reference to and independently of these stipulations and also reserve the right to allow a departure from them in any one or more cases”. In 2020 planning permission was granted for the demolition of the single dwelling at 444 and construction of nine residential apartments. The owner of 432 sought a declaration that this was contrary to the restrictive covenant precluding multiple dwellings (of which covenant he had the benefit) which in turn was met with a defence seeking a declaration that the reservation allowed the owners of the estate to vary this restrictive covenant (which they had agreed to do). Although the court at first instance had applied the correct principles of legal interpretation,                                   applying those same principles led the appellate court to a different conclusion as to how the reservation would be understood by the reasonable reader armed with the background knowledge reasonably available to the parties. The wording of the reservation was a strong pointer that the parties to the conveyance intended the second part of the reservation to reserve a separate and distinct right to the first part. The court should seek if possible to give effect to the two separate parts. The reference to “these stipulations” when related to the second part did not refer to the stipulations in future sales but those in the 1947 conveyance. There was nothing commercially surprising in interpreting the conveyance in that way. The estate owners had the right to modify or vary the restrictive covenants affecting 444 including permitting the land to be developed free from the restriction that there be only a single dwelling-house. Elizabeth Haggerty is a barrister