An innovative attack on the enforceability of covenants fails to impress

Any person interested in land benefited or burdened by a restrictive covenant can apply to the court for a ruling about the applicability, meaning or enforceability of the covenant: section 84(2) of the Law of Property Act 1925. The court can then make a declaration confirming whether or not land­­ is affected, how any restriction is to be interpreted, whether it is enforceable and, if so, by whom. Signature of St Albans (Property) Guernsey Ltd v Wragg [2017] EWHC 2352 (Ch) concerned restrictive covenants imposed before 1925. The land, in St Albans, was sold off in rectangular parcels for the construction of high-class homes – and the conveyances contained restrictive vendor and purchaser covenants. The company had obtained planning consent to demolish three dwellings on part of the land in question and to replace them with a residential care home, in breach of the purchaser covenants. It argued that the purchaser covenants were unenforceable. There had been breaches of some of the vendor covenants on parts of the retained land which, the company argued, put paid to any right to enforce the purchaser covenants: Measures Brothers Ltd v Measures [1910] 2 Ch 248. The court was unimpressed. The company was trying to extend the principle that, where an agreement involves the performance of continuing or future acts, a claimant seeking to enforce them must show that he is ready and willing to fulfil obligations on his part which were part of the consideration for the obligations that he is trying to enforce. However, the principle applied to personal rights, not property rights – and was certainly not applicable to the enforcement of property rights in the hands of innocent collateral owners, who were not themselves in breach. The consideration – in the form of the property interests transferred – had already passed and there was no obvious conditionality between the vendor and purchaser covenants. They were self-standing interests in land, which were part of the package that made up the transaction. Just because one covenant on one side ceased to be enforceable, that did not mean that the parties intended that all the restrictive covenants must also have become unenforceable. Furthermore, construction of houses in breach of density restrictions on the retained land was not a continuing breach of the vendor covenants. These had included separate restrictions on density and user. Thus the density covenant did not have to perform a continuing function; that was the task of the restriction on user – and breach of the density restriction was a “once and for all” breach of covenant. Finally, was it possible to argue that those with the benefit of the purchaser covenants had made or permitted changes in the character of the neighbourhood, so that the covenants had become valueless? The judge thought not. The extra houses built on the estate had not been so numerous as to have deprived the purchaser covenants of their value. Allyson Colby is a property law consultant