Practitioners are often asked to draft restrictive covenants, or to advise as to whether covenants remain enforceable – and, if so, by whom. Particular problems arise where covenants prohibit a landowner from carrying out work or from engaging in specified activities without permission or approval, if the original covenantee then disappears.
Advisers will need to consider whether the covenantee imposed the requirement to obtain consent exclusively for its own benefit, or whether the requirement was imposed for the benefit of subsequent landowners as well. If the covenantee reserved the right to grant or withhold consent to itself, has the death or dissolution of the covenantee discharged the covenant, or made development impossible because consent cannot be obtained?
In Re Cook’s application [2015] UKUT 528 (LC); [2015] PLSCS 16, the Upper Tribunal had to answer all these questions in relation to covenants that prevented landowners from erecting any building except in accordance with approved plans and drawings, and from making any alterations or additions without the seller’s written consent. Was the right to approve any such proposals reserved solely to the seller and, if so, could the tribunal modify or discharge the covenants on the grounds that they had become obsolete because the seller had died?
The judge decided that the absence of any express provision that consent was not to be unreasonably withheld, not only in relation to the erection of any buildings but also to any additions or alterations, indicated that the original covenanting parties had intended the restriction to operate only in the short-term. While the buyer might have been prepared to rely on the reasonableness of the seller, who was a friend, she may not have been prepared to confer a veto on subsequent owners of the seller’s land. Other covenants that she had given were expressed to be for the benefit of the seller or the owners or occupiers of the adjoining property. The difference in language indicated a difference in substance and that, where the draftsman referred solely to the seller, he meant the seller alone. Therefore, the references to “the seller” were not to be interpreted as including her successors in title as well.
The owners of the land that benefitted from the covenants argued that the death of the seller meant that the covenants had become absolute – not obsolete. They might not operate as intended, but did still operate because they gave them an absolute veto over development of land that once formed part of the garden of their property.
The judge disagreed. An arrangement that gave the owners of the land that benefitted from the covenants such permanent and absolute control over the development of the property that was burdened by the covenants was so improbable that only clear language would justify such an interpretation. The better construction was that the parties had intended that the covenant would lapse and become unenforceable when the seller died.
We have seen conflicting decisions on this subject over the years and must remember that the court will decide each case on its own particular facts and by reference to the specific wording of the covenant in question. However, this case follows what appears to be a trend set by the decisions in Crest Nicholson Residential (South) Ltd v McAllister [2004] 2 EGLR 79, Margerison v Bates [2008] 3 EGLR 165 and, most recently, Churchill v Temple [2011] 1 EGLR 73.
Allyson Colby is a property law consultant
