Rhone v Stephens 1994

Rhone v Stephens [1994] 2 AC 310; [1994] 2 All ER 65; [1994] 2 WLR 429;

[1994] 2 EGLR 181; [1994] NLJR 460; [1994] 37 EG 151

EQUITABLE INTERESTS IN PROPERTY, COVENANT TO REPAIR, POSITIVE COVENANT, ENFORCEABILITY, BURDEN AND BENEFIT OF COVENANTS, SUCCESSORS IN TITLE, FREEHOLDS

Facts

The owners of a house and the adjoining cottage under the same roof sold the cottage. Under the conveyance, the vendor covenanted for himself and his successors in title as the owners of the house, to maintain the part of the house which was above the cottage in good condition, to the reasonable satisfaction to the purchasers and their successors in title. Both the house and the cottage were subsequently sold. The plaintiffs were the current owners of the cottage and the defendant was representing the estate which owned the house. The plaintiff brought an action against the defendant, claiming that the roof above the cottage was leaking and that the defendant was in breach of the covenant, contained in the conveyance, to repair it. The defendant was held to be bound by the covenant at first instance. On appeal, this decision was reversed. The plaintiff then appealed to the House of Lords, contending that the rule that positive covenants did not run with freehold land had been reversed by s. 79 Law of Property Act 1925.

Issues

Does the burden of positive covenants run with freehold land?

Decision/Outcome

The appeal was dismissed.

(1) Following Austerberry v Corporation of Oldham(1885) 29 Ch.D. 750, a positive covenant was not enforceable in common law because the successor in title was not party to the contract containing the covenant.

(2) The burden of positive covenants did not run with the freehold and was not enforceable in equity, although breach of a negative covenant which restricted the user of land or the exercise of other rights in connection with land could be prevented or punished in equity.

(3) The rule that positive covenants did not run with the freehold was not affected by s. 79 Law of Property Act 1925 which merely made it unnecessary to refer to successors in title in covenants in conveyance.