Factual and Procedural Background
This opinion concerns a defendant's appeal against an order made by Judge Behrens in the High Court Chancery Division on 21 November 2008. The order declared that certain building works proposed by the Defendant would breach restrictive covenants benefiting the Claimants, granted an injunction restraining the Defendant from carrying out the works, ordered the Defendant to pay the Claimants' costs, and granted permission to appeal.
The Defendant sought to build a three-storey side extension to his house on Heron Island, a residential estate developed in the mid-1980s comprising 47 houses with river views and mooring rights. The estate was sold with restrictive covenants included in the transfers, intended to preserve the estate's character and protect the interests of all owners.
The Defendant's proposed extension was challenged by neighbouring Claimants on the grounds that it lacked the required written approval under a restrictive covenant (paragraph 1) and would cause a nuisance or annoyance under another covenant (paragraph 2). The trial judge found against the Defendant on three issues: whether paragraph 2 applied to the proposed works; whether the works would cause a nuisance or annoyance; and whether the Defendant had obtained written approval under paragraph 1. The appeal focused mainly on the first and third issues.
Legal Issues Presented
- Whether the covenant in paragraph 2 of the relevant schedule applies to the Defendant's proposed building works.
- If paragraph 2 applies, whether the proposed works would constitute a 'nuisance or annoyance' to the Claimants within the meaning of that covenant.
- Whether the Defendant had obtained written approval to carry out the works under the covenant in paragraph 1 of the schedule.
Arguments of the Parties
Defendant's Arguments
- Paragraph 1 deals exclusively with regulating the erection of buildings, requiring prior written approval by the management company (Peverel), implying that such approval could not be unreasonably withheld and that the management company must consider the interests of other plot owners.
- Paragraph 2 should not be construed to apply to building works, as doing so would undermine paragraph 1 by allowing covenantees to challenge approved buildings on the basis of nuisance or annoyance.
- The phrase 'nuisance or annoyance' in paragraph 2 is derived from common law nuisance, which does not generally cover interference with views caused by buildings, and thus paragraph 2 should not extend to building erection.
- The Defendant contended that an email from the management company constituted written approval under paragraph 1, subject to two conditions which had been met.
Claimants' Arguments
- The covenants in the transfer documents form a tightly integrated scheme intended to preserve the estate's character and are enforceable by all owners.
- Paragraph 2 is in a familiar form and its natural meaning includes restraining the erection of buildings that may cause nuisance or annoyance, such as materially interfering with river views.
- Paragraph 1 and paragraph 2 operate alongside each other; paragraph 1 governs approval of building plans, but paragraph 2 independently restrains the erection of buildings that cause annoyance.
- The management company’s approval process under paragraph 1 does not impliedly remove a plot owner’s right to complain under paragraph 2.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Tod-Heatly v. Benham (1888) 40 Ch. D. 80 |
Interpretation of 'nuisance or annoyance' in restrictive covenants; annoyance is a wider concept than nuisance and includes interference with pleasurable enjoyment of property. |
The court applied its guidance to hold that the proposed extension would constitute an annoyance to the Claimants under paragraph 2. |
| Hunter and Others v. Canary Wharf Ltd [1997] AC 655 |
Clarification that 'nuisance or annoyance' in covenants extends beyond common law nuisance. |
Supported the wider interpretation of 'nuisance or annoyance' beyond common law nuisance. |
| Mahon and another v. Sims and another [2005] 3 EGLR 67 |
Implied terms in building covenants; the management company’s obligations when considering approvals. |
Referenced in argument for implied obligations on the management company, though no authority was found supporting some implied terms. |
| C & G Homes Ltd v. Secretary of State for Health [1991] Ch 365 |
Scope of covenants restraining nuisance or annoyance; distinction between use of property and conduct causing nuisance. |
The court discussed but found the case of limited direct assistance; it was considered in construing paragraph 2. |
| Wood v. Cooper [1894] 3 Ch 671 |
Whether erection of a building can breach covenants prohibiting erection of buildings and causing annoyance; held that erection of a trellis was both a building and an annoyance. |
Significantly influenced the court’s conclusion that paragraph 2 can apply to the erection of buildings causing annoyance. |
| Walter v. Selfe 4 De G. & Sm. 322 |
Definition of annoyance as interference with pleasurable enjoyment of property. |
Quoted in Tod-Heatly v. Benham and applied in the court’s interpretation of paragraph 2. |
Court's Reasoning and Analysis
The court analysed the wording and context of the restrictive covenants, focusing on paragraphs 1 and 2 of the Third Schedule. Paragraph 1 expressly requires prior written approval by the management company for any building works, while paragraph 2 prohibits activities that may become a nuisance or annoyance.
The Defendant argued that paragraph 2 should not extend to building works, as paragraph 1 exhaustively regulates such activities. The court rejected this, reasoning that paragraph 2’s language is deliberately broad, encompassing all activities that may cause annoyance, including building extensions.
The court relied heavily on the precedent of Wood v. Cooper, where similar covenants were held to cover the erection of a building causing annoyance, and on Tod-Heatly v. Benham, which clarified the wider meaning of 'annoyance' beyond common law nuisance.
The court found no implied limitation in paragraph 2 arising from paragraph 1’s approval process. It held that both paragraphs operate concurrently: paragraph 1 governs the approval process, but paragraph 2 independently allows covenantees to challenge buildings causing annoyance, even if approved under paragraph 1.
Regarding the alleged written approval under paragraph 1, the court examined correspondence between the Defendant and the management company. It concluded that the email from the estate manager was a non-binding statement of intent contingent on conditions, not an irrevocable approval. Thus, no written approval had been granted.
Holding and Implications
The court DISMISSED the Defendant's appeal.
The decision confirms that restrictive covenants containing broad language against nuisance or annoyance can extend to the erection of buildings causing such annoyance, even where a separate approval process for building works exists. The court also clarifies that management company approval under such covenants must be explicit and binding to constitute written approval.
The direct effect is that the injunction restraining the Defendant from carrying out the proposed extension remains in force, and the Defendant remains liable for the Claimants’ costs. No new precedent was established beyond the application and reaffirmation of existing principles.