Wilkinson & Ors v Kerdene Ltd

Equity does not make every positive freehold covenant enforceable against a successor in title. The benefit-and-burden principle applies only where the payment burden is relevant to a right or benefit which the successor elects to exercise, and which may at least theoretically be renounced.

A fixed maintenance contribution need not be expressly conditional upon use, exactly coincide with each right, or be capable of apportionment. It remains enforceable where it relates at least in part to facilities over which the successor continues to exercise granted rights. A site owner’s separate maintenance covenant, and an express statement that payment is for maintenance, do not sever that connection.

The appellants owned bungalows in a holiday village. Their conveyances granted rights over estate roads, footpaths and certain recreational facilities, and required annual indexed contributions towards maintenance. Kerdene Ltd, as successor to the original site owner, sought arrears and injunctions after carrying out substantial, but incomplete, maintenance works.

The County Court held the covenants enforceable against both original purchasers and successors in title. The latter appealed on the basis that the payment covenant was the consideration for the site owner’s maintenance covenant, rather than for the granted rights. The Court of Appeal also considered whether the differing wording of the Form B conveyances altered that result.

Decision

The Court of Appeal unanimously dismissed the appeals. Patten LJ gave the judgment, with which Arden and Rix LJJ agreed.

1. The applicable principle. The equitable principle in Halsall v Brizell [1957] 1 Ch 169, as confined by Rhone v Stephens [1994] 2 AC 310 and explained in Thamesmead Town Ltd v Allotey [1998] 37 EG 166, does not permit the burden of every positive covenant to run with freehold land. The burden must be relevant to the exercise of a right or benefit which the successor takes, and the successor must be able, at least in theory, to renounce that benefit and avoid the burden.
2. Correlation with the granted rights. The annual contribution was relevant to the continuing use of the Schedule 1 rights. Although it was described as a maintenance payment, and the conveyances did not expressly make use conditional upon payment, its substantial purpose was to maintain roads and other facilities which the bungalow owners were entitled to use only through the conveyances. The payment and the rights therefore had the necessary correlation.
3. Fixed and unapportionable charge. The absence of a mechanism for apportioning the fixed indexed sum between individual facilities did not defeat enforceability. A charge need not exactly coincide with each right exercised. It was recoverable because it related at least in part to the Schedule 1 rights; the successors had no defence unless the covenant had no relation whatever to those rights.
4. Effect of the maintenance covenant and Form B wording. The original vendor’s clause 4 covenant to maintain, and the Form B statement that payment was for the matters in that clause, did not make the payment covenant independent of the granted rights. Clause 4 supplied additional assurance while the original covenantee owned the site. Liability nevertheless depended on the subsistence and exercise of the Schedule 1 rights, not on complete performance of clause 4. The permitted grounds also gave the original purchasers no basis to avoid the payment obligation.

• Court of Appeal (Civil Division): The appeals were dismissed in [2013] EWCA Civ 44.
• Bodmin County Court: HH Judge Vincent entered judgment for Kerdene Ltd on 14 December 2010. Following a remittal to consider the Form B conveyances, he reaffirmed on 23 April 2012 that the payment covenants were enforceable.