Court of Appeal finds restrictive covenant preventing redevelopment unenforceable: the case of Bath Rugby Ltd v Greenwood and others

On 21 December 2021, the Court of Appeal handed down judgment in this case concerning the enforceability of a restrictive covenant contained in a 1922 conveyance.

The appeal to the Court of Appeal was over whether an area of land in Bath known as the Recreation Ground, commonly called "the Rec" and formerly part of the Bathwick Estate was still subject to a restrictive covenant imposed in a conveyance of the Rec made on 6 April 1922.

The claim was brought by Bath Rugby Ltd ("Bath Rugby"), which has a lease of part of the Rec and who wished to replace its existing stadium with a new, larger stadium incorporating various retail and commercial outlets, with associated car parking. The land was subject to an old restrictive covenant that nothing should be "erected, placed, built or done" on the land "which may be or grow to be a nuisance, annoyance or disturbance or otherwise prejudicially affect the adjoining premises or the neighbourhood."

The issue before the Court was whether there was anyone who could now claim to be entitled to the benefit of the covenant, and that in turn depended on whether the effect of the 1922 conveyance was to “annex the benefit of the covenant to identifiable land”.

The Court said that for the benefit of a covenant to be annexed to land it must be taken for the protection of defined lands, so that it passes with ownership of the land. No particular form of words has to be used, but there must be a clear intention to benefit identifiable land.  In this case, the covenant was for the benefit of the "neighbourhood" and the Court held that this was insufficient. This meant that the benefit of the Covenant had not been annexed to land and that there was therefore no one who could now enforce the Covenant.

The decision overturns a High Court ruling in October 2020 that at least one of the eight objectors had a right to the benefit of the covenants. This is good news for Bath Rugby who can now ‘restart’ planning their new 18,000-capacity stadium.

For more information or any other litigation issue, contact Johanne Spittle on York 01904 716000, Wetherby 01937 583210 or Malton 01653 692247 or email johanne.spittle@warekay.co.uk.