P & A Swift Investments v Combined English Stores Plc [1989]...

Facts

• The case concerned whether a covenant in a lease could bind a subsequent tenant.
• The dispute related to the enforceability of a leasehold covenant when the leasehold interest changed hands.
• The parties included P & A Swift Investments and Combined English Stores.
• The case reached the House of Lords, which examined circumstances under which covenants would run with the land.

Issues

1. Whether the covenant in question could run with the land and thus bind successors in title.
2. What requirements must be met for a covenant to be enforceable against subsequent owners.
3. How to distinguish between positive and negative covenants in terms of their enforceability.
4. The relevance of the benefited and burdened status of the land regarding covenants.

Decision

• The House of Lords held that a covenant can run with the land and bind successors in title if certain requirements are satisfied.
• The requirements include the intention to bind successors, the covenant touching and concerning the land, and an existing privity of estate.
• The court affirmed that while negative covenants are more easily enforced against successors, positive covenants remain generally personal at common law.
• The court clarified that, in some situations, registration may be necessary to enforce certain covenants against third parties.
• The judgment applies these principles specifically to leasehold covenants but has implications for both residential and commercial properties.

Legal Principles

• For a covenant to run with the land, it must:
  • Show the original parties' intention to bind successors.
  • "Touch and concern" the land, i.e., relate to its use or enjoyment rather than representing a merely personal obligation.
  • Operate where there is privity of estate, such as between a landlord and tenant.
  • Be registered, if required, to bind third parties, with registration requirements varying by jurisdiction.
• Positive covenants impose active obligations and are generally not enforceable against successors under the common law, while negative covenants (restrictive) may bind successors in equity.
• The distinction between positive and negative covenants remains central to their enforceability in English property law.

Conclusion

The decision in P & A Swift Investments v Combined English Stores [1989] AC 632 remains a leading authority establishing the criteria for covenants to run with the land, emphasizing intention, connection to the land, privity of estate, and the negative/positive covenant distinction, thus providing essential clarity for the enforceability of leasehold and other property covenants.