Karen Reeve v Aidan Gregory McDonagh & Anor
[2024] EWHC 439 (Ch)
Aidan Gregory McDonagh & Anor. v Karen Reeve
28 April 2023
[2023] EWHC 933 (Ch)
High Court
Two houses next door to each other were once one big house. An old agreement said you couldn't build any more buildings on one of them. The owners wanted to knock down and rebuild one, but the neighbour said no. The judge decided that the old agreement only stopped extra buildings, not rebuilding the existing one, even bigger.
Key Facts
- •Mr and Mrs McDonagh (Claimants) are the freehold owners of Rose Cottage, bound by a 1958 restrictive covenant.
- •The covenant, benefiting Karen Reeve's (Defendant) adjoining property, prohibits 'no additional buildings whatsoever'.
- •Claimants sought a declaration that their planned demolition and replacement of Rose Cottage with a larger building doesn't breach the covenant.
- •Prior to 1958, both properties were one, with Rose Cottage being a smaller house. A 1988 deed modified the covenant to allow a specific extension.
- •The 1988 deal involved a partial sale of land associated with Rose Cottage, impacting the covenant's scope.
Legal Principles
Construction of restrictive covenants requires determining the parties' intention through textual and contextual analysis, considering surrounding circumstances and commercial common sense.
Case law on the construction of restrictive covenants
Estoppel may arise if a party acts to their detriment in reliance on a shared understanding of a covenant, rendering it unconscionable for the other party to resile from that understanding.
Case law on estoppel
Section 84 of the Law of Property Act 1925 (as then in force) provided a mechanism for modifying covenants.
Law of Property Act 1925, s. 84
Outcomes
The court rejected the estoppel argument.
The Defendant did not act in reliance on the 1988 understanding of the covenant, and the 1988 transaction did not cause detriment to the then-owners of Barnwood.
The court ruled that the 1958 covenant only prohibits the erection of buildings *in addition to* the existing Rose Cottage, not its replacement.
The natural meaning of the covenant, considering the surrounding circumstances at the time it was created, supports this interpretation. The court considered the preservation of sea views as a relevant factor, but found that the covenant's primary purpose was to prevent additional buildings.