Restrictive covenant — Prohibition on use as cinema or for principal purpose of image projection for the showing of films — Whether second limb also encompassing use as cinema — Whether covenant breached by uses of burdened land that were ancillary to cinema use on adjoining land — Appeal dismissed
The claimant owned property that included the site of a disused cinema. Part of the property, equating approximately to the former cinema site, was burdened by restrictive covenants that bound the claimant and benefited the first and second defendants. The covenants prohibited the use of the burdened land “12.2.1 as a cinema or 12.2.2 for the principal purpose of use for image projection for the showing of whole films in an auditorium setting” or for any associated, ancillary or similar use (clause 12.2.3). The third defendant council, had, as part of their local plan, commissioned a development scheme that provided for a multi-screen cinema to be built on part of the property. Although the planned cinema would be located outside the burdened land, access to it, and services for it, would have to cross that burdened land, which would also be used for signage and cinema advertising.
During the planning process, the court was asked to determine whether the intended use of the burdened land would amount to a breach of the restrictive covenants. The claimant accepted that the intended use of the burdened land was not that of a cinema, and, as such, was not contrary to clause 12.2.1. However, it contended that: (i) the use of the remainder of the land as a cinema would be for the principal purpose of “use for image projection for the showing of whole films in an auditorium setting”; and (ii) the proposed use of the burdened land would be a use “associated, ancillary or similar to such use”, and would therefore contravene clause 12.2.2.
The High Court rejected the first contention and held that, although it was unnecessary to decide the point, the proposed use of the burdened land would be ancillary to the use of the remainder of the land: [2004] PLSCS 177. The claimant appealed.
Held: The appeal was dismissed.
On the true construction of clause 12.2.2, it was clear that the use of the proposed site as a cinema would fall within the restrictive covenant. The words of clause 12.2.2 did not need to be read down simply because they would otherwise incorporate a previously expressed prohibited use. There was no reason why clause 12.2.2 could not be viewed as a prohibition of the use falling within 12.2.1 together with other uses: Tea Trade Properties Ltd v CIN Properties Ltd [1990] 1 EGLR 155 and Beaufort Developments Ltd (NI) v Gilbert-Ash Ltd (NI) [1999] 1 AC 266 considered.
However, on the facts of the present case, the proposed use of the burdened land was not associated with, or ancillary to, the use of the land for “image projection or for the showing of whole films in an auditorium setting”. The claimant had failed to establish that clause 12.2.2 had a wider scope than clause 12.2.1 in relation to use as a cinema or that it indirectly restricted the use of adjoining land as a cinema where no part of the burdened land itself would be so used: Co-operative Retail Services Ltd v Tesco Stores Ltd (1998) 76 P&CR 328 considered.
Wayne Clark (instructed by Cripps Harries Hall, of Tunbridge Wells) appeared for the claimant; Peter Crampin QC and Alistair Craig (instructed by the solicitor to Tunbridge Wells Borough Council) appeared for the third defendants; the first and second defendants did not appear and were not represented.
Eileen O’Grady, barrister
