Restrictive covenant – meaning of “a dwelling-house”
The Chancery Division of the High Court has given judgment in the case of Parsons v. Thatchers Wood Residents Company Ltd (LTL 20/10/2011) in which John Summers acted for the applicant home owners. The case concerned the interpretation of standard form restrictive covenants which had been imposed on the sales off of houses on a small estate formerly owned by the Ministry of Defence. One covenant provided that “New Buildings” could not be erected until after a certain date. That covenant contained no limitation on the number of buildings which could be built. However, a covenant labelled “User” provided that the property sold was to be used only as “a dwelling house in single family occupation”. The claimant owners of the property wanted to build a second house in the garden of the property and sell it. The defendant, Thatchers Wood Residents Company Ltd, was a residents’ management company which owned and looked after the common parts of the estate and which was a beneficiary of the covenants in issue. The original articles of association of the company provided that shares could only be issued to home owners on the estate, who had to transfer their share when they sold their house.
The claimants applied to the court for declaratory relief under section 84(2) Law of Property Act 1925 on the question whether the User covenant had effect to prevent the erection of a second dwelling house on the property. The court considered the effect of that covenant in its context, including the admissible factual matrix which included the articles of association. The judgment contains an examination of the guidance given by Buxton LJ in Martin v. David Wilson Homes [2004] EWCA Civ 1027 where the Court of Appeal was concerned with the meaning of a very similar covenant which also provided for use to be limited to use as “a” dwelling house. The High Court determined in Parsons that the context of the restriction on use was materially different to that in David Wilson (where the user covenant was held not to prohibit the construction of more than one house), particular weight being placed on the provision as to “single family occupation”. The High Court concluded that the covenant as to user had effect to prevent the erection of more than one dwelling house.
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