Restrictive Covenants: tackling the Bath Rugby Case.
In December last year, the Court of Appeal determined the issue of enforceability of a restrictive covenant affecting development on the Recreation Ground (‘the Rec’) in Bath, the home of Bath Rugby Club (BRC). In this article we discuss the importance of tackling older restrictive covenants.
A restrictive covenant is an agreement or promise which prevent land from being used for a certain purpose or in a certain way. The original parties to a conveyance are generally able to enforce covenants on each other without too much legal trouble. However, enforceability can become very complex when the original parties sell their interests on. To show that the benefit of a covenant has passed to a successor in title, you need to establish that the covenant was annexed to the land. That is to say, that the benefit is attached to the land and it automatically passes on.
BRC has a long lease on the Rec, and it has plans to extensively redevelop the Bath Rugby Stadium and the surrounding area.
BRC had previously applied to the High Court to remove a restrictive covenant contained in a 1922 conveyance which purported to prevent anything which could be or could grow to be “a nuisance and annoyance or disturbance or otherwise prejudicially affect the adjoining premises or the neighbourhood”.
BRC argued that the land which benefitted from the covenant was insufficiently defined, and therefore there was no annexation. However, the High Court denied BRC’s application. They held that the ‘adjoining land or the neighbourhood’ should be interpreted as referring to ‘buildings and land of the vendor…adjoining or near to’ the land conveyed.
BRC appealed and the Court of Appeal overturned the original decision. The court held that the words “neighbourhood and adjoining land” were not a sufficient indication of the land which would the benefit from the covenant. The wording was “inherently imprecise” and that it would be “theoretically impossible to draw up a list of properties” which fall within the description.
This decision means that there was no annexation, and therefore no one was able to enforce the covenant. With the legal ‘scrum’ over, BRC are now free to continue with their development plans without fear that this covenant can be enforced.
- The decision highlights the critical importance of conducting a good and thorough title investigation when planning to develop or redevelop land. Identifying issues early will help you tackle them efficiently.
- It shows that you should not ignore old covenants. Often older covenants are disregarded on the grounds that no one will enforce them, but, as shown above, this is not always the case.
- The case also illustrates the need to ensure that the land which benefits from a covenant is clearly defined. The land which benefits should be easily ascertainable, and ambiguity should be avoided at all cost.
If you have an enquiry regarding matters discussed in this article, please contact a member of our Litigation & Disputes department.
Written by Tom Spratley – Trainee Solicitor