Rhone (A.P.) and another v Stephens (Executrix of Mrs M. M. Barnard, deceased)

This appeal concerned whether equity can enforce a positive covenant to repair between successive freehold owners and whether the long-standing rule in Austerberry v. Oldham Corporation should be overruled. The House of Lords reaffirmed that equity will enforce negative (restrictive) covenants against successors in title but will not enforce positive covenants (which require expenditure or active performance) against successors in title in freehold land. The court held that to permit enforcement of positive covenants against successors would contradict the common law rule that personal obligations cannot be imposed on persons who were not parties to them and would blur the distinction between legal and equitable remedies. The Law of Property Act 1925 (sections 78 and 79) and other authorities do not operate to make the burden of a positive covenant run with freehold land. Legislative reform, not judicial decision, is required to change that rule.

The dispute arose from a 1960 conveyance by which Walford Cottage was sold separately from Walford House. Clause 2 preserved reciprocal rights of support between the two properties and clause 3 contained a covenant by the vendor (and his successors) to keep the part of the roof of Walford House above Walford Cottage wind and watertight. After subsequent sales, the owner of Walford Cottage sued the owner of Walford House for breach of the covenant to repair. The trial judge awarded damages for breach; the Court of Appeal reversed and dismissed the claim; the appellants appealed to the House of Lords.

Nature of the claim: a freehold owner sought enforcement (damages or compliance) of a positive covenant to repair contained in a prior conveyance.

Issues framed:

• Whether a positive covenant to repair can be enforced in equity against a successor in title of the covenantor;
• Whether the rule in Austerberry should be overruled or displaced by section 79 (and section 78) of the Law of Property Act 1925 or by equitable doctrines (including the "benefit and burden" principle); and
• What remedies, if any, are available to the covenantee.

Court’s reasoning: The court reviewed the common-law doctrine of privity, the historical development of equitable enforcement of covenants (Tulk v. Moxhay) and subsequent authorities limiting equity to restrictive covenants. It concluded that equity supplements but does not contradict common law: restrictive covenants operate by depriving successors of a right attached to the land, whereas positive covenants impose personal obligations to expend money or act and so require contractual privity. The House of Lords declined to overrule Austerberry or to extend equitable jurisdiction to enforce positive freehold covenants, resisted applying section 79 as effecting that change, and rejected an unfettered "pure principle" of benefit and burden as a basis to impose all positive obligations. The court observed that reform was a matter for Parliament, not the judiciary.

Procedural posture: trial judgment for claimant on damages; Court of Appeal reversed (15 January 1993); House of Lords affirmed the Court of Appeal and dismissed the appeal (17 March 1994).

Appeal dismissed. The House of Lords held that equity will enforce negative (restrictive) covenants against successors in title but will not enforce positive covenants to repair against successors in title of freehold land. Overruling Austerberry or extending equitable enforcement of positive covenants would contradict fundamental common-law principles and should be left to Parliament.

First instance: trial judge ordered the owner of Walford House to pay damages for breach of the 1960 covenant to repair. Court of Appeal: reversed and dismissed the action (Order of 15 January 1993). House of Lords: affirmed the Court of Appeal and dismissed the appeal ([1994] UKHL 3).