Crest Nicholson v McAllister [2004] 1 WLR 2409
Property law – Covenants – Annexation
Facts
Two brothers, by way of their joint company, had purchased land for development and onward sale. They sold the land in plots to individuals with both user and building restrictive covenants attached. One of their sales required the company to enter into an agreement for the construction of five new houses on the land. However, this was challenged by M, who owned a property which would have been affected by the construction. The judge at trial stage held that the restriction on the land had passed with the land, even after the two brothers had died. However, he found that the user restriction was to prevent more than one house being built on a plot and therefore was a building restriction. C appealed the decision on the basis that the covenant did not pass with the land in accordance with the Law of Property Act 1925.
Issue
It was important for the court, in this instance, to understand whether the covenants in the prior conveyances of the property were enforceable and whether this could be extended to those relied upon by M. Moreover, if the covenants had been annexed, it was important for the effect of the restrictions to also be considered in the circumstances.
Decision/Outcome
The appeal was allowed by the court on the basis that the benefit of the covenant had not been annexed to the land which was owned by M. M could not show that she was the owner of the land which was intended to have the benefit. On this basis, M could not rely on the restrictive covenant to prevent the building work which would have affected her land.
Updated 21 March 2026
This case summary accurately reflects the decision in Crest Nicholson Residential (South) Ltd v McAllister [2004] EWCA Civ 410, [2004] 1 WLR 2409. The Court of Appeal held that for the benefit of a restrictive covenant to pass by statutory annexation under section 78 of the Law of Property Act 1925, the land intended to be benefited must be identifiable from the conveyance itself or from documents incorporated by reference into it. The article correctly states that M failed on this basis. The underlying legal principles remain good law. The article is broadly accurate for the purposes for which it is written, though readers should note that annexation under section 78, and the related principles from Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594, continue to be applied by the courts and are unaffected by subsequent legislative change. No material statutory amendments or significant later appellate decisions have altered the position described.
