A key principle of English law is that positive obligations do not bind successors in title of a covenantor, at law or in equity: Austerberry v Oldham Corporation (1885) 29 Ch D 750. However, where a deed grants rights and imposes positive obligations linked with the rights granted, it may be possible to enforce the positive obligations against successors in title under the rule in Halsall v Brizell [1957] 1 All ER 371.
The rule is based on the principle that a party cannot take a benefit under a deed without accepting the obligations imposed by it. However, more recent decisions have restricted the apparent breadth of this principle. See, for example, Rhone v Stephens [1994] 2 AC 310, Thamesmead Town Ltd v Allotey [1998] 3 EGLR 97 and Davies v Jones [2009] EWCA Civ 1164, which set out a series of conditions that must be satisfied before the doctrine applies.
Wilkinson v Kerdene Ltd [2013] EWCA Civ 44 provides us with up to date authority from the Court of Appeal on the application of the rule. The litigation concerned payments for services provided for the benefit of holiday homes in Cornwall. The home owners resisted demands for payment on the ground that they were not bound by the positive covenants given by their predecessors in title.
The conditions that must be satisfied to invoke the rule in Halsall v Brizell are as follows. The rights granted and the obligations in dispute must have been imposed in the same transaction. Importantly, there must be a reciprocal relationship between them, and a successor in title must be able to choose between enjoying the rights granted and paying for them or, alternatively, relinquishing them.
The home owners argued that the fixed sum payable under the conveyances to their predecessors did not correlate with the only benefits that they had chosen to accept; ie use of the roads and footpaths in the holiday village. They distinguished Halsall v Brizell on the ground that the parties had been able to apportion the amount claimed between various facilities; in this case, their predecessors had agreed to pay a fixed annual amount (subject to increases to reflect inflation) that could not be apportioned in the same way. They also claimed that the payment covenants were given in return for the seller’s own maintenance covenants – and not in return for the rights granted.
The Court of Appeal decided that it must consider what, in substance, the covenantors were paying for. The payments, or a substantial part of them, were intended to cover the cost of maintaining the roads and other facilities used by the owners of the holiday homes, to ensure that the rights could be exercised. No one had ceased to use the roads, nor wished to do so.
The presence of a covenant to effect the repairs had not severed the link between the rights granted and the payment covenants. It provided additional assurance that the repairs would be done while the seller owned the site, and the determinant of liability was the subsistence of the rights themselves. Consequently, the new site owner was entitled to the payments demanded.
Allyson Colby, property law consultant
