Judges agree that it is desirable, for the guidance of practitioners, that words used in covenants should have a consistent meaning, yet the approach to the interpretation of this common restriction in the courts has fluctuated.

Anew decision in the Court of Appeal has put into doubt the approach of Neuberger J (as he then was) in his interpretation of 'a private dwellinghouse' to mean one dwellinghouse as he decided in Crest Nicholson Residential (South) Ltd v McAllister [2004] which I reviewed in issue 133. This new case, Martin v David Wilson Homes Ltd [2004], is another about classic backland development.

The facts

In 1988 an estate in Telford had been sold off in plots with purchasers erecting one house on each plot. Land behind the existing houses on plots 2 and 3 was later bought by a developer (Wilson), which built a show house on part of plot 3 and built a further 12 houses on part of plot 2. The owner of plot 1 (Martin) claimed that this was in breach of restrictive covenants for use as a private dwellinghouse. The Court of Appeal disagreed.

The restrictions

The plots were sold subject to temporary restrictions against erecting any buildings, walls or fences other than in accordance with plans approved by the vendor (Telford Corporation). This was followed by a permanent restriction which began:

Not at any time to carry on or permit or suffer to be carried on on the said land or any part thereof or in any building or buildings erected or to be erected thereon any trade or business whatsoever…

The restriction then continued:

… and not to use or permit or suffer any buildings erected thereon or on any part thereof to be used for any purpose than as a private dwellinghouse either with or without garages and other necessary outbuildings.

The analysis

The Court did not regard it as relevant that the contract for the sale of plot 1 required the purchaser to erect a 'single private dwellinghouse', in accordance with specified details, even though it was assumed that the vendor sold off plots 2 and 3 on similar contracts. The contract was only between the parties to it (although it was part of the factual matrix of the subsequent conveyance). The Court said that just because there was a positive obligation to erect one house on the plot it did not follow that other houses may not also be erected on the plot. The Court went on to hold that the second part of the user restriction followed on naturally from the first part which referred to 'buildings'. It seems to have been assumed that these would all be dwellinghouses rather than one dwellinghouse plus at least one other type of permitted building such as a garage or shed.

The Court said that the draftsman could have prohibited the erection of more than one dwellinghouse, rather than expect this to follow from what was said in the user restriction.

It was argued that this was a prestigious estate with a building scheme, where each plot had a large garden to enhance a significant dwellinghouse. However, this did not persuade the Court that use was limited to one dwellinghouse on each plot.

The Court drew attention to a number of puzzling features of the wording (not an uncommon aspect for restrictive covenants). The Court also regarded it as unlikely that it had been intended that the owner of such a house would not be entitled to construct a granny annexe or a cottage in the grounds for a gardener.

Case law

The Court of Appeal then considered case law. In particular, it considered the first instance decision of Neuberger J in Crest, who had held that a restriction against use of premises ‘for any purpose other than those of or in connection with a private dwellinghouse’ did not permit more than one dwellinghouse on the plot.

The first reason given by him was that the use of the indefinite article ‘a’ connotes or may connote some form of singularity. He also considered that past case law implied an assumption that 'a private dwellinghouse' indicated the limitation of the property to one dwellinghouse and no more, subject to there being nothing to the contrary in the context.

In the Martin case Buxton LJ disagreed with these views. He said that 'a private dwellinghouse' takes its nature from the context and had no fixed connotation of singularity of itself. Lady Justice Arden agreed with him. The Court of Appeal also drew attention to the presence of wording such as 'or on any part thereof' and 'any buildings', being a factor accepted by Neuberger J in Crest as pointing towards there being more than one building permitted on the plot.

It would have been entirely possible for the Court simply to have held that the wording was confined to the use of whatever buildings were erected on the whole or any part of the land rather than the use of the land as a whole. However, it chose not to do so and the result was that the additional houses were not in breach of the restrictive covenants. The reasons that were given are open to question.

Contrast the cases

The Court in Martin was evidently not referred to the decision of the Court of Appeal in Crest (Auld, Chadwick and Arden LJJ – the latter not to be confused with Lady Justice Arden). That decision turned on whether Mrs McAllister had the benefit of the restrictions. Nevertheless, the judgment mentioned the interpretation issues in passing.

Although the interpretation issues were academic in the light of the lack of entitlement, these issues were fully argued for the Court of Appeal. The distinction between the two cases may in some respects be more apparent than real. Until queried by Chadwick LJ, entitlement to enforce the relevant restrictive covenants in Crest had been accepted. In Martin the Court was content to deal with the interpretation issue even though entitlement was not admitted (perhaps not even having been pleaded) and merely was assumed for purposes of the preliminary issue. Yet interpretation would have been academic there too if there were no entitlement.

It seems that, on the particular facts, the interpretation by Neuberger J was possibly wrong. The restriction concerned use of the ‘premises’. Normally that word refers to the land conveyed. However, the immediately previous restriction may have displaced this normal meaning since it began:

Not to cause or permit or suffer any buildings or premises whatsoever which shall be erected on the said land to be used as and for a Public House…

However, the reasoning of Neuberger J did give practitioners a starting point: begin as if 'a' means one, then see if the context displaces that connotation. After all, in ordinary speech the indefinite article normally does mean one of whatever is specified. However, in Martin the Court of Appeal removed this initial presumption. Each case must therefore be considered afresh to see whether or not 'a' means one.

We now have a situation where a word means exactly what the particular members of the court choose it to mean in each case. That is unhelpful to the practitioner who is asked to advise on the meaning of a very common restrictive covenant, which would probably have been expected by the parties to have its normal meaning.

Watch this space

Mere reference to part of a property surely is not conclusive on interpretation of such a restriction. In reality a conveyancer who (without agonising over the drafting) puts in the usual sort of wording about not using the property or any part of it other than as a private residence does not intend that there can be as many houses on the property as it can take in subdivisions.

The natural meaning is that the property should be used as one private residence (a house, outbuildings, garden and so on) with nothing else on any part of the property. That is demonstrated by a third recent case.

About a week after the decision in Martin, Neuberger LJ (as he is now) gave the judgment of the Court of Appeal in Jarvis Homes Ltd v Marshall. In the latter case there was a restriction on the number of dwellinghouses to be erected on a plot. This was followed by prohibition not to:

… use or permit or suffer to be used the land hereby conveyed or any part thereof or any building or erection now or at any time hereafter erected thereon for any trade or business but will use the same as a private residence only.

The developer proposed to demolish the existing house, erect another in a different position and use part of the plot as an access road to serve a development of ten new houses on adjoining land. The Court of Appeal held that this would be in breach of the restriction relating to use as 'a private residence only'. The words 'the same' referred back to 'the land hereby conveyed' and so on, rather than just referring to any building or erection upon the land or any part of it. Agarden and a drive may be part of a private residence, but not an access that serves more than one residence on other land.

The first lesson is therefore to identify whether a restrictive covenant relates to the whole plot or just to something built on the land or on part of it.

In all three cases the Court of Appeal came to a decision that differed in some way from that reached at first instance. Accordingly, the second lesson is that it is often best not to take no for an answer, until we see more consistency from the Court in interpreting restrictive covenants of this nature.

Case references

Martin v David Wilson Homes Ltd [2004] EWCA Civ 1027

Crest Nicholson Residential (South) Ltd v McAllister [2002] EWHC 2443 (Ch); [2004] EWCA Civ 410

Jarvis Homes Ltd v Marshall [2004] EWCA Civ 839 ; (2004) 29 EG 116 (CS)

Gerald T Moran is a property development partner at Hunters.  © Property Law Journal