Churchill v Temple & Ors

Restrictive covenants requiring approval or consent from named vendors do not ordinarily extend to the vendors’ successors merely because the benefit runs with retained land. Construction remains objective and must consider the language, structure and commercial context of the conveyance from the perspective of both parties. Where the covenants were intended to operate during the vendors’ lifetimes, their deaths may discharge both the consent mechanism and the related prohibitions, rather than turning the prohibitions into absolute bars. A court should not imply a term requiring consent to be reasonably withheld where the covenant deliberately omits that qualification.

The claimant owned a house built on a plot conveyed in 1967 subject to restrictive covenants. The covenants prohibited construction other than a specified dwelling and required approval by the vendors or their surveyor. They also required consent for structural alterations. The neighbouring owners claimed entitlement to enforce the covenants and sought to prevent demolition and construction of a replacement house.

The court considered whether one defendant had enforcement rights, whether references to the vendors included successors in title, whether the vendors’ deaths made the covenants absolute or ineffective, and whether a term requiring consent not to be unreasonably withheld should be implied.

1. Enforcement. The benefit had been assigned to the neighbouring owners, but there was no assignment to the third defendant. The covenants were not expressed to benefit the then owners of the other neighbouring property. Section 56 of the Law of Property Act 1925 therefore did not assist her.
2. Meaning of “the Vendors”. The phrase in paragraphs 4 and 5 of the first Schedule meant the original vendors, not their successors in title. The drafting was haphazard and ambiguous. The court considered the commercial and practical context from the perspective of both parties. The provisions represented a compromise between protecting the value of retained land and avoiding an indefinite restriction controlled by unknown successors.
3. Effect of death. Read literally, the covenants would become absolute when the vendors died because no consent could then be obtained. That result could prevent construction altogether and prohibit ordinary alterations. Applying the principle in Antaios Compani Naviera S.A. v. Salen Rederier AB, the consent provisions and prohibitions were to be read together. The covenants were discharged on the deaths of the vendors rather than converted into absolute prohibitions.
4. The court followed Crest Nicholson Residential (South) Limited v. McAllister. In Re Beechwood Homes Limited’s Application did not require the opposite result because the relevant construction issue had not been argued or decided in that case.
5. The remaining issue was unnecessary to the result. Had paragraph 5 remained effective, no term requiring consent to be reasonably withheld would have been implied. Paragraph 5 deliberately omitted the qualification appearing in paragraph 4.
6. Different problems might arise where vendors remained alive but were untraceable or unable to decide. That possibility did not affect the construction on the facts before the court.