Reeve v McDonagh & Anor [2024] concerned an appeal arising from an application under section 84(2) of the Law of Property Act 1925.
In the 1920s a housing estate was laid out in Poole. A large house called Barnwood and a small lodge now known as Rose Cottage was built on one plot. By a Transfer in 1958 (the 1958 Transfer) the freeholder sold off Barnwood and the northern section of the plot and covenanted with the Transferee "…that no additional buildings whatsoever shall at any time be erected on [Rose Cottage]" (the Covenant). The Court of Appeal accepted that at least part of the purpose of this was to protect the sea views enjoyed by Barnwood.
Over time, owners of both Rose Cottage and Barnwood made changes including:
- A rear extension to Rose Cottage in relation to which an express modification of the Covenant was documented (the 1988 Deed);
- Transferring some of the Rose Cottage land back to Barnwood; and
- Replacing Barnwood with two new houses (each of which have the benefit of the Covenant and one of which is owned by the Appellant).
The Respondents own Rose Cottage and had, by the date of the appeal, demolished it and laid foundations for a new much bigger house pursuant to a planning permission they had obtained in 2022.
The Appellant argued that the Master was wrong to determine that the 1958 Covenant did not prevent the Respondents carrying out the development/that no estoppel arose from the 1988 Deed.
The Court of Appeal dismissed the appeal holding that:
- "The natural and ordinary meaning of the words of the 1958 Covenant, read in context, is that the covenantor, by covenanting that 'no additional buildings whatsoever' should 'at any time be erected on' his retained land, promised no more than that no buildings in addition to, in the sense of 'as well as' the already existing building [Rose Cottage], should be erected on that land…"
- "The words 'additional buildings' do not naturally or obviously convey an intention that Rose Cottage itself would be affected by the covenant" and if the intention had been to prevent any replacement or extension of Rose Cottage itself, one would expect the Covenant to make that clear;
- It was most unlikely that the parties/reasonable people in the position of the parties, would have intended the 1958 Covenant to forever preclude building work of any description to Rose Cottage itself;
- The 1988 Deed did not evidence an agreement on the scope of the 1958 Covenant, had not been necessary and just represented an express agreement that the works were lawful.
This case shows the importance of the "natural and ordinary meaning" of the words used and the factual matrix surrounding them. Here "additional buildings" meant no buildings in addition to or, or as well as, Rose Cottage. It did not refer to extensions to, or replacement of, the existing structure.
