Amsprop Trading Ltd v Harris Distribution Ltd [1997] 1 WLR 1025

Facts

  • Amsprop Trading Ltd (the vendor) sold land to Harris Distribution Ltd (the purchaser) including a covenant requiring the purchaser to contribute to the maintenance of a private road.
  • The covenant stipulated that the purchaser and its successors in title should pay towards the upkeep of the road that provided access to the property.
  • Harris Distribution Ltd later sold the property to a third party, who refused to contribute to the maintenance costs.
  • Amsprop Trading Ltd sought to enforce the positive covenant against the new owner.
  • The central dispute concerned whether the positive covenant was enforceable against successors in title, given the lack of privity of contract.

Issues

  1. Whether a positive covenant requiring payment towards maintenance can be enforced against successors in title at common law.
  2. Whether any statutory or equitable mechanisms (such as Section 79 of the Law of Property Act 1925 or leasehold arrangements) permit the enforcement of positive covenants against successors in title.
  3. Whether the distinction between positive and negative covenants affects the enforceability of such obligations in this context.

Decision

  • The Court of Appeal reaffirmed that positive covenants generally do not run with the land at common law and cannot bind successors in title.
  • The court held that statutory provisions such as Section 79 of the Law of Property Act 1925 do not alter the common law position regarding positive covenants.
  • The court found that, in the absence of specific statutory or equitable mechanisms (like a chain of indemnity covenants or a leasehold obligation), positive covenants cannot be enforced against successors in title.
  • The attempted enforcement of the positive covenant relating to the road maintenance against the successor failed due to these legal limitations.

Legal Principles

  • At common law, burdens of positive covenants do not run with freehold land and so are generally not enforceable against successors in title.
  • The rule in Tulk v Moxhay permits the enforcement of negative (restrictive) covenants in equity but does not apply to positive covenants.
  • Section 79 of the Law of Property Act 1925 does not provide a mechanism to make positive covenants bind successors in title beyond the original parties.
  • Leasehold arrangements or the use of indemnity covenants may permit the practical enforcement of positive obligations, but such mechanisms were not present in this case.

Conclusion

The Court of Appeal’s decision in Amsprop Trading Ltd v Harris Distribution Ltd highlights that positive covenants cannot generally be enforced against successors in title absent clear statutory or equitable mechanisms, and the need for precise drafting and appropriate legal structures in property transactions involving affirmative obligations.

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