Neil John Mackenzie v Sharon Shac-Yin Cheung & Anor
[2024] EWCA Civ 13
Sharon Shac-Yin Cheung & Anor. v Neil John Mackenzie
8 February 2023
[2023] EWHC 220 (Ch)
High Court
Imagine an old agreement that says you can only build one house on your land. A later part of that agreement says someone can make an exception. The court decided that 'making an exception' means they can let you build more than one house.
Key Facts
- •Restrictive covenants affect land in Croydon, previously part of the Fox Farm Estate owned by the Whitgift Educational Foundation.
- •Claimant owns No. 432, defendant owns No. 444, both formerly part of the Estate.
- •No. 444 was conveyed in October 1947, No. 432 in November 1947, creating restrictive covenants (no building except one detached dwelling house, and use only as a private residence).
- •Planning permission granted for demolition of No. 444 and construction of nine apartments.
- •The Whitgift Foundation (successor to the Governors) has a clause (paragraph 11) in the 1947 conveyance which reserves a right to 'allow a departure' from the stipulations in the conveyance.
- •The dispute centers on the interpretation of paragraph 11, specifically whether it allows the Whitgift Foundation to release the restrictive covenants on No. 444.
Legal Principles
Principles of contractual interpretation as per Arnold v Britton [2011] UKSC 50 and Wood v Capita [2017] UKSC 24.
Arnold v Britton [2011] UKSC 50 and Wood v Capita [2017] UKSC 24
Section 78 of the Law of Property Act 1925 concerning the annexation of benefits of covenants.
Law of Property Act 1925, section 78
Interpretation of the meaning of "departure" in restrictive covenants.
Mayner v Payne [1914] 2 Ch 445 (considered but ultimately distinguished)
Outcomes
Appeal allowed.
The court found that paragraph 11 reserves two distinct rights: (a) to deal with retained land independently of stipulations and (b) to allow departures from stipulations. The second right encompasses a waiver or release of the restrictive covenants on No. 444. This interpretation is supported by the language of the clause, commercial common sense, and the context of the conveyance.