Texaco Antilles Ltd v Kernochan [1973] AC 609

Key point
  • If some lots of land that are part of a ‘building scheme’ come under the same ownership, their restrictive covenants become enforceable again when they come under separate ownership
  • But if all the lots of land part of the building scheme come under the same ownership, their restrictive covenants cease
Facts
  • The original developers sold lots land, some of which were subject to a restrictive covenant not to build a public garage
  • C ltd became the owner of 4 of these lots that were subject to the restrictive covenant, it then sold 2 to C and 2 to D
  • D sought to build a service station on its lots, C sought an injunction to enforce the restrictive covenant
  • D argued, inter alia, that the unity of seisin had extinguished the restrictive covenant when both C and D’s lots were under the ownership of C
  • The Court of Appeal of the Bahamas rejected D’s argument and granted the injunction sought by C
Held (Privy Council)
  • Appeal dismissed; the restrictive covenant was enforceable against D
Lord Cross of Chelsea
  • ”It is no doubt true that if the restrictions in question exist simply for the mutual benefit of two adjoining properties and both those properties are bought by one man the restrictions will automatically come to an end and will not revive on a subsequent severance unless the common owner then recreates them.“
  • ”But their Lordships cannot see that it follows from this that if a number of people agree that the area covered by all their properties shall be subject to a ‘local law’ the provisions of which shall be enforceable by any owner for the time being of any part against any other owner and the whole area has never at any time come into common ownership an action by one owner of a part against another owner of a part must fail if it can be shown that both parts were either at the inception of the scheme or at any time subsequently in common ownership.“: p. 626
Commentary
  • If it were held otherwise, there would be pockets where restrictive covenants do not apply within a building scheme
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