Key points
• Positive covenants affecting freehold land cannot be directly enforced against anyone who acquires the land from the original covenantor.
• Parties may be able to sidestep the rule using the doctrine in Halsall v Brizell, which established that a party cannot take benefits under a deed without accepting any linked obligations imposed by the deed.
• Use of the doctrine will depend on the proper construction of the instrument in question.
It has long been a feature of English law that landowners can accept obligations, but they will not bind their successors in title when they do so. Equity relaxed the rigours of this rule in Tulk v Moxhay (1848) 2 Ph 774, but only in relation to restrictive covenants. Therefore, positive covenants, such as an obligation to keep a building in repair or to pay an estate service charge, are directly enforceable against the original covenantor, but will not pass when the land changes hands.
The rule dates back to Austerberry v Oldham Corp (1885) 29 Ch D 750. It has been heavily criticised, but the House of Lords refused to reverse it when asked to do so in Rhone v Stevens [1994] 2 All ER 65. The Law Lords explained that to enforce negative covenants is to treat land as being subject to a restriction. However, to enforce positive covenants against successors would be to enforce obligations against someone who did not enter into them.
Nonetheless, the courts are sometimes willing to allow covenantees to enforce positive obligations against a covenantor’s successors in title indirectly under the doctrine in Halsall v Brizell [1957] 1 All ER 371. The doctrine is based on the principle that a party cannot take a benefit under a deed without accepting any linked obligations imposed by the deed. Therefore, in Halsall, it was held that a landowner could avoid an obligation to contribute to the cost of maintaining a private road that provided access to his property only by relinquishing his right to use that road.
The Court of Appeal was asked to consider the scope and application of the doctrine in Wilkinson v Kerdene Ltd [2013] EWCA Civ 44; [2013] PLSCS 44, which concerned a holiday village in Cornwall. The owners of the holiday homes enjoyed rights to use the roads, parking areas and footpaths in the holiday village, as well as other recreational facilities. In return, they were required to pay an annual fixed sum, subject to adjustment for inflation, to cover the cost of maintenance.
Time passed and the holiday village fell into disrepair. Some facilities closed owing to lack of maintenance and the roads, footpaths and common areas became dilapidated and overgrown. However, Kerdene made serious attempts to restore them to a proper state of repair and then sought to recover contributions from the owners of the holiday homes. Many were successors in title to the original purchasers and refused to pay all or part of the contributions demanded on the ground that they were not bound by the positive covenants given by their predecessors in title.
Reciprocal relationship
The doctrine in Halsall does not require successors in title who enjoy benefits granted by a conveyance to accept all the burdens imposed in that conveyance. The courts have stressed that there must be a reciprocal relationship between the covenant to pay and the rights granted for the doctrine to apply. Importantly, successors in title must also be able to choose between enjoying the rights granted and paying for them, or relinquishing the rights and saving their money.
No one had stopped using the roads or wished to do so. Nonetheless, the new owners of the holiday homes would have had a defence to Kerdene’s claim had they been able to show that the payment covenants given by their predecessors were unrelated to the grant of the easements over the common parts. They relied on the fact that the payment covenants were given, and were expressed to be given, in return for the provision of services, as opposed to the rights granted.
However, the Court of Appeal held that the covenants to provide services had been included to give added comfort that the original site owner would look after the facilities while it owned the site, and decided that the inclusion of the covenants did not sever the link between the payment obligations and the rights granted.
The court focused on what, in substance, the holiday home owners were being asked to pay for. It accepted that the conveyances did not expressly state that users must pay their share of the costs before they could exercise the rights granted. However, the benefits granted by a deed need not be expressly related to a corresponding burden to satisfy Halsall. They can be related by implication and the payments had been reserved to cover the cost of maintaining the roads and facilities so that the owners of the holiday homes could exercise their rights to use them.
The holiday home owners also relied on the fact that some of the payments had been reserved to cover the provision of additional services, such as painting and lawn cutting. These costs had nothing to do with the easements granted and it was impossible to apportion the fixed sums payable under the conveyances. The court brushed over this point. It ruled that the payments, or a substantial part of them, related to the easements granted. Consequently, Kerdene was entitled to the sums demanded.
Alive and well
The decision provides welcome reassurance that the doctrine in Halsall remains alive and well. It offers conveyancers a simple alternative to other more complex devices invented to circumvent the rule in Austerberry and is particularly useful when neighbours grant rights to each other.
However, it would be unwise to rely on the doctrine as a substitute for one of the more traditional methods of recovering an estate service charge. On the one hand, landowners need to be confident that service charge costs are fully recoverable by methods that are impervious to challenge. On the other, buyers and lenders will want to be certain that successors will be liable to maintain and repair, and to provide essential services, if the common parts change hands.
History reveals that the courts have applied the doctrine sparingly in a restricted number of cases. As a result, use of the doctrine will not always satisfy the first of these requirements. We can also be sure, thanks to the rule in Austerberry, that using the doctrine as a standalone solution, without extracting direct covenants from new owners of the common parts, will certainly fall foul of the second. Therefore, an estate rent charge, or a commonhold or leasehold service charge, remains a safer option.
Allyson Colby is a senior associate and professional support lawyer at Pinsent Masons
