Cantrell v Wycombe District Council

Section 609 of the Housing Act 1985 does not make the burden of a positive covenant run with freehold land. It places a local housing authority in the position of a covenantee with benefited land. It therefore removes the usual requirement that the covenantee retain such land, but does not displace the general rule that only covenants negative in substance bind successors in equity.

Clear statutory language is required before a public authority is given a power which no private landowner possesses. Enforcement remains by injunction or damages in lieu, and is limited to the restrictive element of the covenant.

A registered social landlord agreed with a district council that the council could nominate tenants for specified houses. The agreement was expressed to have been made under section 609 of the Housing Act 1985. Its obligations to repair and let the house to council nominees were positive in form and substance.

After the house was sold at auction, the purchaser became registered proprietor. The agreement had been registered as a local land charge and had been disclosed before the purchase. The Reading County Court held that section 609 enabled the council to enforce the positive obligations against the purchaser.

The purchaser appealed. The central issue was whether section 609 permits a local housing authority to enforce positive covenants against a successor in title to freehold land.

1. Appeal allowed unanimously. Lewison J held, with whom Stanley Burnton LJ and Moore-Bick LJ agreed, that section 609 of the Housing Act 1985 did not permit enforcement of the agreement’s positive obligations against the purchaser.

2. At common law, the burden of a freehold covenant does not bind successors. In equity, as explained in Rhone v Stephens [1994] 2 AC 310, enforcement is confined to covenants negative in substance and is by injunction or damages in lieu. The ordinary equitable requirement that the covenantee retain benefited land also applies.

3. Section 609 must be read against that background. Its language removes the obstacle that a housing authority has no land benefited by the covenant. The phrases concerning enforcement in like manner and to like extent preserve, rather than enlarge, the ordinary limits on enforcement. The authority may therefore enforce only the restrictive element of a covenant.

4. The legislative history of the consolidation provision supported that construction. The relevant pre-consolidation material proceeded on the basis that the predecessor provision concerned restrictive covenants. A consolidation Act was not to be read as making the substantial change of allowing positive covenants to run with freehold land without clear words.

5. There was no absurdity in that result. Parliament had elsewhere used express language, coupled with purchaser safeguards, when allowing positive obligations to bind successors. Section 609 remained effective in relation to restrictive covenants. The County Court’s decision was therefore reversed.

• Court of Appeal (Civil Division): Allowed the purchaser’s appeal in [2008] EWCA Civ 866 and reversed the conclusion that section 609 of the Housing Act 1985 made the positive covenants enforceable.
• Reading County Court: HH Judge Ann Campbell held that section 609 allowed the council to enforce the positive obligations against the purchaser.