Morrells of Oxford Ltd v OUFC

Morrells of Oxford Ltd v Oxford United Football Club Ltd [2001] Ch. 459

Restrictive Covenants – s.79 Law of Property Act 1925 (LPA) – Construction of Documents – Implied Contrary Intention

Facts

The claimant (M) applied for an injunction to enforce a restrictive covenant contained in a conveyance of land against O, who proposed to convert the land to use a football stadium. The covenant in question prohibited the building of licensed premises within half a mile of the public house which had been the object of the original conveyance.

It was contended by C that, due to the operation of s.79 LPA 1925, the covenant could be presumed to bind successors in title to the land unless a contrary intention was expressed. O was granted summary judgment under the Civil Procedure Rules 1998 (Pt. 24) and M appealed.

Issue

The issue on appeal turned on the appropriate construction of s.79 LPA 1925. Namely, whether the words provisionally read in by the statute could, in the particular commercial context, usefully supplement the words of the particular document.

Decision / Outcome

Finding in favour of O, the Court of Appeal held that s.79 LPA could not apply to the covenant in question. The purpose of s.79 was to remove the need to provide expressly for covenants contained in a conveyance to bind successors in title by allowing such an intention to be inferred, in the absence of any contrary intention. Looking at the conveyance in the round (IRC Ltd v West Bromwich Building Society [1997] UKHL) such a contrary intention could be found, as other covenants contained in the conveyance were explicitly stated to bind successors, whereas the disputed covenant did not.