Tenants serving notice for conveyance of freehold to them – Landlord wishing to include in conveyance restrictive covenants preventing building and development on land – Whether such covenants amounted to restrictive covenants against use as permitted by section 10(4) of the Leasehold Reform Act 1967 – Tenants’ appeal dismissed
In 1977 and 1978 the appellant tenants in both appeals entered into leases of houses at 22 and 27 Chiswick Quay, Hartington Road, London W14. Chiswick Quay estate comprised 68 individual houses, each of which was originally let on a 125-year lease between 1975 and 1978. The estate was situated around a marina and remained private with its own grounds, pavements, sewage system and street lighting. On March 1 1995 the tenants served notice on the respondent landlord exercising their right to purchase the freehold of the properties under the Leasehold Reform Act 1967. The respondent admitted that the tenants had the right to be granted freeholds subject to the conditions in the Act. However, it wished to include in the conveyance certain restrictive covenants to help preserve the character of the estate. The relevant covenants were that the tenants would not, without the previous consent of the vendor: (1) affix or place anywhere outside the property any aerial or satellite dish; (2) construct, build or erect on the property any building or alter the external arrangement of the property; and (3) construct or erect any fence, wall or other barrier around the property. Section 10(4) of the 1967 Act permitted the landlord, in certain circumstances, to include “. . . restrictive covenants (that is to say any covenant or agreement restrictive of the user of any land or premises) . . .”. It was common ground that if “user” in section 10(4) was to be given a wider definition, it would allow the respondent to include the covenants. The tenants contended that “user” as employed in section 10(4) should be construed in its narrow sense, namely the manner in which the premises might be employed, and, therefore, the respondent was not entitled to include the covenants that it sought to include. The county court concluded that section 10(4) did not rule out the covenants that the respondent sought to include. The tenants appealed.
Held The appeal was dismissed.
1. Restrictive covenants included all negative obligations that ran with the land and benefited the dominant tenement. They were not only covenants against user in the narrow sense, but also against development of land or building on it. Although the draftsman had thought it necessary to use restrictive covenants with the parenthesis “any covenant or agreement restrictive of the user of any land or premises”, it would have been remarkable if he had intended to exclude covenants against user in the wider sense.
2. That conclusion was reinforced, inter alia, by the fact that in the definition of a Class D land charge, as contained in section 2(5) of the Land Charges Act 1972 (deriving from section 10(1) of the Land Charges Act 1925), a restrictive covenant had never been construed in the narrow sense. Further support for a wider construction could be derived from section 50(1) of the Land Registration Act 1925, where a reference was made to a restrictive covenant relating to building on “or other user” of land, which suggested that “building on” could be comprehended as falling with the definition of user.
Paul Morgan QC (instructed by Dewar Hogan) appeared for the appellants in both appeals; Jonathan Small (instructed by Lawrence Graham) appeared for the respondents.
Thomas Elliott, barrister
