89 Holland Park (Management) Limited v Sophie Hicks

 

This is an interesting case relating to a covenant over adjoining land entered into on a sale of the adjoining land. The covenant required the adjoining owner (i.e. the purchaser) to obtain the consent of the vendor or any assigns for any development on the adjoining land and for any application for permission to develop the land.

The land has remained undeveloped for over 40 years and the new owner of the adjoining land sought to argue that:

  1. The covenant was not binding as it was personal and did not bind successors in title
  2. The covenant was not binding as it did not touch and concern the vendor’s land and was not of a nature of a restrictive covenant.
  3. Although the covenant made no reference to consent not to be unreasonably withheld for planning or development, this was to be implied.

The Court held that:

  1. The covenant was binding on successors in title. S.78 of the 1925 Act applied and the wording used (which referred to the covenant only benefitting “assigns”) was not sufficient to show a contrary intention. Interestingly, the Court held that the lessees in occupation of the vendor’s land (which had been developed into flats) had the benefit of the covenant also under S.78 as it applies to the owners and occupiers of the land intended to be benefitted.
  2. It was a restrictive covenant. This is, apparently, the first case in which it has actually been held that a covenant which allows an adjoining owner to control use of adjoining land does touch and concern the adjoining owner’s land. It was held that it did so simply because it allows the vendor or its successor to control a development that will impact on their own property.
  3. Consent could not be unreasonably refused. The Court held it would have made no commercial sense if the vendor could veto for no good reason the development of the adjoining land when it had been sold with development in mind.