Crest Nicholson v McAllister

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.