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Chris
Pease
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This case shows that when they are properly drafted, covenants may be used more flexibly than you might think.
When Covenants Do Not Apply
A bungalow owner who wished to replace a flat roof with a pitched roof found himself in court recently when his neighbour sought to rely on a fifty-year-old covenant ‘not to make any addition or enlargement or alteration’ to the bungalow without the consent of the vendor. The covenant stipulated that such consent would not be unreasonably withheld. The sale documents also contained a covenant prohibiting the building of anything other than a single bungalow on the property.
In this case, however, the vendor concerned was the original owner of the bungalow and the adjacent property. The adjacent property had been sold to a new owner years previously and the covenant was not stated to extend to successors in title.
The question before the court, therefore, was whether the new owner of the adjacent property could enforce the covenant. He argued that the commercial reality of the covenant was such that the benefit of it must be intended to pass to successors in title. The bungalow owner argued that the covenant had been restricted to the original vendor (who had died in 1977) and thus was not enforceable by the new owner.
Looking at the documents of sale, the court found that these were tightly drafted and there were other references to successors in title where appropriate. The court was not inclined to re-write the contract. The original vendor had created the covenant to protect her own position only. On her death, the covenant ceased to have any effect; otherwise, any future alterations to the bungalow would be rendered impossible because permission could not be given. The court described such a possibility as ‘astounding’.
A covenant relating to land is normally written to include successors in title. However, in this case, the covenant was written in terms which clearly distinguished between the vendor and the successors in title to the vendor’s land. Accordingly, the distinction between the rights of the vendor and the vendor’s successors in title was clear.
