| COVENANT — Positive covenant — Enforceability — Registered social landlord entering into positive covenant with local housing authority concerning land — Housing authority not having possession of or interest in land — Agreement stated to be made for purposes of Housing Act — Whether covenant enforceable against purchaser of property for value in good faith — Housing Act 1985, s 609
Cantrell v Wycombe District Council [2008] EWCA Civ 866; [2008] WLR (D) 269
CA: Moore-Bick, Stanley Burnton LJJ and Lewison J: 29 July 2008
A positive convenant could not be enforced against the successor in title of the covenantor in common law even though the agreement had been made with express reference to s 609 of the Housing Act 1985 to disapply the common law prohibition. Parliament had not intended s 609 to displace the common law.
The Court of Appeal so stated allowing an appeal of the claimant, Michael Cantrell, from the decision of Judge Ann Cambpell given on 5 July 2007 sitting in the Reading County Court whereby she had held that the covenant would apply to the claimant and was enforceable against him.
The claimant had bought a house at 155 Bowerdean Road, High Wycombe for £130,000 on 25 March 2005 from a registered social landlord whose predecessor in title had entered into an agreement with the defendant, Wycombe District Council, pursuant to s 609 of the 1985 Act to grant the council nomination rights with regard to the property. The agreement had been registered as a local land charge on 8 March 2005 and on 21 April 2005 the claimant was registered as the registered proprietor of the property. The claimant commenced proceedings for a declaration that the covenant did not apply to him.
S 609 of the Housing Act 1985 provides: “Where— (a) a local housing authority have disposed of land held by them for any of the purposes of this Act and the person to whom the disposal was made has entered into a covenant with the authority concerning the land, or (b) an owner of any land has entered into a covenant with the local housing authority concerning the land for the purposes of any of the provisions of this Act, the authority may enforce the covenant against the persons deriving title under the covenantor, notwithstanding that the authority are not in possession of or interested in any land for the benefit of which the covenant was entered into, in like manner and to the like extent as if they had been possessed of or interested in such land.”
LEWISON J said that the question raised on the appeal was whether s 609 of the Housing Act 1985 empowered the council to enforce against the claimant the positive obligations contained in the agreement. In his Lordship’s judgment the intention of Parliament in enacting s 609 must have been to disapply the requirement that a covenantee retained land and the requirement that the covenants were enforceable to the extent that they benefited land of the covenantee. It could hardly be suggested that the whole of the law relating to the running of covenants (and in particular the well entrenched rule that the burden of a positive covenant could not be made to run with freehold land) was absurd. If s 609 did no more than assimilate the position of a local housing authority with that of any other landowner who took a covenant from a purchaser, there was no absurdity unless the general law was itself absurd. The commentators were in fact divided on the question whether s 609 applied to positive covenants. With all respect to them, the conclusions of the commentators did not advance the argument one way or the other. The words were clear. The concluding part of s 609 had put a local housing authority into the same position as a landowner who had taken a covenant on a disposal of freehold land for the benefit of retained land and who continued to retain that land. The manner and extent to which a covenant was enforceable against a subsequent purchaser of the freehold were by injunction or damages in lieu; and the extent of enforcement was the extent to which the covenants were negative in substance.
STANLEY BURNTON and MOORE-BICK LJJ gave concurring judgments. |
