Restrictive Covenants – the use of land and prevention of nuisance

The recent case of Williams V Johnson [2015] served a useful reminder as to considerations to be made before pursuing breach of covenant actions. In this particular case the Claimants and owners of Wells Farm sold off part of their land (known as “Lychcroft”) to the first defendant in 1990. The conveyance contained three restrictive covenants which the claimant alleged the defendants were in breach of:

• Firstly; that “no building shall be erected upon [Lychcroft]…without the previous consent in writing of the vendors.”
• Secondly; that “no trade or business shall be carried upon [Lychcroft] or any part thereof nor shall the same be used otherwise than as a private dwellinghouse.”; and
• Thirdly; “not to do or keep or suffer to be done or kept on [Lychcroft] or any part thereof any act or thing which may become a nuisance annoyance or cause inconvenience to the vendors their successors in title owners and occupiers for the time being of [Wells Farm]…”

A restrictive covenant affecting freehold land consists of an agreement in a deed that one party will restrict the use of its land in some way for the benefit of another’s land. The restrictive covenant may be enforceable by one party’s successors in title against the other’s successors in title, as well as between the original contracting parties.
In relation to point one above, the Claimants alleged that the Defendants had erected a shed and then later a poultry shed in breach of this covenant. The Defendants carried on a farming business from the property which the Claimants further alleged was a breach as per point 2 above. As to point 3, it was contended that the Defendant had breached this is three ways; it was argued that

1. that their conduct and behaviour amounted to a nuisance.
2. the Defendant caused Wells Farm to flood by constructing a lake and then failing to carry out proper maintenance on the drainage system;
3. that general nuisance behaviour including tipping soil on Lychcroft amounted to a breach of the covenant.

The Court found in the Claimants favour on some but not all points. In respect of the first covenant (no building), the court held that the shed and poultry shed erected were done so in breach of the covenant, however, only nominal damages of £5 were awarded as the Claimant had been aware and did not object at the time. An injunction was not appropriate as the Claimant had not sought for the buildings to be removed.
In respect of the second covenant (no trade or business) the Defendants tried to argue that the words ‘other than farming or associated acts’ should be implied into the covenant, however, this was rejected by the court. Damages of £15,000 for breach of the second covenant were awarded and calculated to the amount that a purchaser would have paid for a licence to farm.
As to the third and final covenant at issue (relating to nuisance), the Court decided that there had been instances where the Defendant’s behaviour had amounted to a nuisance, though not ‘harassment’ it was not significant enough to warrant anything other than nominal damages. The court looked into the drainage at the lake and concluded that though there was not a claim for damages they did order that some of the drains were re-routed to avoid further flooding in the future. Finally, the tipping of soil on Lychcroft over time was held to amount to a nuisance.
Given the low damages awarded for some of these heads of claim Claimants should consider carefully before pursing claims for damages for restrictive covenant breaches, especially where there are many heads of claim not all of which are likely to be successful.
The case highlights the importance of seeking legal advice to fully understand covenants. When purchasing land or commercial property it is important to fully understand any covenants that you may become bound by and our Commercial Property Team are here to help you.  Should you already own land and commercial property and have concerns about potential covenant breaches then our Commercial Litigation Team are on hand to talk you through the pro’s and con’s of any such action.