The Benefit/Burden Principle - How a Buyer of Land Could Be Required to Perform Positive Covenants Without Having Expressly Agreed to Do So

by Dechert LLP
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The recent case of Goodman and others v Elwood (2013) in the Court of Appeal shows that, where a buyer acquires the benefit of a right over neighbouring land, the buyer must also take on the obligations which relate to that right, even where the buyer has not expressly covenanted to do so.

Mr Goodman acquired from a company named Dobson Park Properties a unit on an industrial estate which had the benefit of a right of way over an access road which was owned by a Mr Elwood. The access road had previously been owned by Dobson. The case turned on whether Mr Goodman was liable to pay Mr Elwood towards maintenance of the access road.

Mr Goodman’s view was that he was not liable to pay any money to Mr Elwood to maintain the access road for the following reasons:

  1. Under English law positive covenants are personal. This meant that, although the previous owner of Mr Goodman’s unit (Dobson) had covenanted with Mr Elwood to pay towards maintenance of the access road, that obligation did not bind Mr Goodman but remained with Dobson.
  2. Although Mr Goodman had given a covenant to Dobson and Dobson’s successors in title to pay towards maintenance of the access road, Dobson did not own the access road at the date of the sale to Mr Goodman and therefore Mr Elwood was not entitled to the benefit of that covenant because he was not a successor in title to Dobson.

The Court of Appeal found in favour of Mr Elwood:

  • On any view, Mr Elwood was a successor in title to Dobson, and was therefore entitled to the benefit of the covenant given by Mr Goodman to Dobson mentioned at point 2 above. 
  • A buyer who acquires a property which has the benefit of a right of way must assume the burden of contribution which is appropriate to the property he has acquired. So the benefit and burden principle applied to make Mr Goodman liable to contribute to the cost of maintenance of the access road.

The case reinforces the earlier landmark case of Halsall v Brizell (1957), in which the judge stated: “it is ancient law that a man cannot take benefit under a deed without subscribing to the obligations thereunder”.

In modern conveyancing, positive covenants are often enforced by contractual obligations in the transfer and the use of restrictions at the Land Registry. However, where this is not practicable, or where (as is often the case) in older conveyances there is no such mechanism to enforce positive covenants, Goodman and others v Elwood shows the court’s readiness to apply the benefit and burden principle to successors in title if the rights granted are proportionate to the obligation imposed.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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