Signature of St Albans (Property) Guernsey Ltd v Wragg & Ors (restrictive covenants in relation to land)

Restrictive covenants affecting land are equitable property rights, not personal contractual rights. A breach by one successor in title does not generally deprive innocent collateral successors of the right to enforce corresponding covenants. Principles governing injunctions for interdependent contractual obligations do not transfer directly to restrictive covenants.

A density covenant prohibiting houses from being erected is ordinarily broken once and for all when an additional house is built. It does not impose a continuing obligation on subsequent owners to remove that house. A change in the character of a neighbourhood defeats enforcement only where it has rendered the covenants valueless, subject to an estoppel based on representation and detrimental reliance.

The claimant owned land in St Albans subject to restrictive covenants contained in 1910 conveyances. It had planning permission to demolish three houses and construct a residential care home, a development accepted to breach the purchaser covenants if they remained enforceable.

The defendants were owners of neighbouring land said to have the benefit of those covenants. The claimant sought declarations under Law of Property Act 1925, section 84(2), and under the inherent jurisdiction. It argued that breaches of reciprocal vendor covenants, and changes in the character of the neighbourhood, prevented enforcement.

The central issues were whether the defendants were disentitled by breaches committed by themselves, their predecessors or collateral successors, whether density covenants imposed continuing obligations, and whether the neighbourhood had changed so substantially that the covenants had lost practical value.

1. Claim dismissed in substance. The 1910 restrictive covenants continued to affect the claimant’s property and were in principle enforceable by injunction by any or all of the defendants.
2. The principle in Measures Brothers Ltd v Measures, as stated in [1910] 2 Ch 248, and applied in Australian Hardwoods Pty Ltd v Commissioner for Railways, [1960] 1 WLR 425, concerned an applicant seeking equitable relief under a personal contractual relationship. It required the applicant to have performed, and be ready and willing to perform, obligations forming part of the consideration for the relief sought. It did not apply so as to make each successor’s property right depend on the conduct of every other successor.
3. Restrictive covenants bind successors in equity as property rights. A successor who has personally become disentitled may be unable to obtain an injunction, but that does not extinguish the rights of innocent collateral successors. Trivial breaches causing no relevant impact would in any event not ordinarily bar enforcement.
4. The density covenants, expressed as prohibiting more than two or three houses from being erected, were broken once and for all when a supernumerary house was built. The words “at any time” did not convert the construction prohibition into a continuing obligation requiring present owners to remove houses built by predecessors. The distinction between a construction covenant and a continuing user covenant remained material.
5. The doctrine of benefit and burden, considered in Halsall v Brizell, [1956] 1 Ch 169, and limited by Rhone v Stephens, [1994] 2 AC 310, applied to positive covenants and had no application to the negative covenants in issue.
6. The claimant’s “two standards” approach to neighbourhood change was rejected. Under Chatsworth Estates Co v Fewell, [1931] 1 Ch 224, one general standard applied: change had to render the covenants valueless. The exception concerned estoppel or acquiescence where the applicant had represented that the covenants were unenforceable and the defendant relied on that representation to detriment. That exception was not established.
7. The additional houses and development relied on had not caused a sufficiently complete change in the character of the neighbourhood to deprive the covenants of substantial value.