Summary

The owner of a holiday village was entitled to enforce positive covenants against bungalow owners in the village, requiring them to make payments in respect of the costs of maintaining the roads, car parks, and recreational facilities in the village. The bungalow owners were successors in title to the covenants, but the payments had a real relation to rights granted in their favour which they continued to exercise, namely use of the facilities.

Facts

The appellant bungalow owners (W) appealed against a decision that they were bound by covenants requiring them to pay maintenance costs to the respondent (K), owner of the holiday village where the bungalows were situated.

The village included a leisure complex and various recreational facilities, roads and footpaths. Two slightly different conveyances had been used for the sale of the bungalows, depending on when they were purchased. Both contained a Sch.1 which granted various rights to the purchaser, including for use of roads, footpaths, lawns and recreational facilities in the village. Both contained an identical cl.4, by which the vendor covenanted to maintain the roads, drives, car parking spaces, footpaths, lawns, recreational facilities and paint the external surfaces of the bungalow. Form A contained a covenant that the purchaser would pay an annual sum or a proportionate part for maintaining the roads, car parks, pleasure grounds and other recreational facilities in the village, whereas form B contained a covenant for a payment to be made for the purpose of carrying out the various matters referred to in cl.4. The village had fallen into disrepair. It had been sold to K, which had attempted to restore it to a proper state of repair, but had not complied with all the requirements of cl.4. K sought to recover from W the sums payable under the covenants in the conveyances. Most of W were successors in title and the positive covenants were therefore only enforceable if the equitable benefit and burden principle in Halsall v Brizell [1957] Ch. 169 applied. The judge found that the charging provision was relevant to and correlated with the right to use the access road and that the difference in wording between form A and form B should not produce a different outcome because both conveyances contained maintenance charges.

W submitted that the payment covenant was linked to the obligation to repair under cl.4, rather than to the grant of rights under Sch.1. They argued that the payment of a fixed annual amount was not capable of being apportioned, meaning that the burden of the fixed sum did not correlate with the exercise of the rights granted.

Held

A successor in title to the original covenantor did not incur a liability to perform a positive covenant unless it had some real relation to a right granted in his favour under the conveyance which he did wish to exercise. The reference, in Lord Templeman's speech in Rhone v Stephens [1994] 2 A.C. 310, to the exercise of those rights being conditional upon the performance of the positive obligation was not limited to cases in which it was expressly so conditional. In substance, the payment of an annual charge for the maintenance of facilities which the covenantors were only entitled to use by virtue of rights granted under the deed was relevant to the continued exercise of those rights even though it was a contribution to the cost of their maintenance: the two were not inconsistent. In some cases, the positive obligation might be completely unrelated to the rights which the owner sought to exercise, Rhone v Stephens, Halsall v Brizell and Thamesmead Town Ltd v Allotey (1998) 30 H.L.R. 1052 applied. W's submission about the inability to apportion the maintenance charges was a non-sequitur. In the form A conveyances, the payment was due for the purpose of maintaining the roads, car parks, pleasure grounds and other recreational facilities under Sch.1. In the form B conveyances, it was a payment towards all the matters referred to in cl.4, which included the Sch.1 facilities together with the upkeep of the lawns and the painting of the bungalows. In form B, it did arguably contribute towards the cost of work carried out by the site owner which was not within the rights granted under Sch.1. However, unless the charge could be apportioned, it remained recoverable provided that it also related at least in part to the rights which were included in Sch.1. The successors in title therefore had no answer to the claims unless they could show that the payment covenant had no relation to the Sch.1 rights which they had continued to exercise. Although the continued exercise of those rights was not made expressly conditional upon payment, the payment was intended to ensure that they remained capable of being exercised. The payment, at least in substantial part, was intended to provide a contribution to the cost of maintaining the roads and other facilities over which the owners of the bungalows were granted rights. The cl.4 covenant, by the original site owner, to carry out the repairs was not sufficient to sever any link between the payment covenant and the Sch.1 rights (see paras 27-34 of judgment).

Appeals dismissed