Smith Brothers Farms Ltd v The Canwell Estate Company Ltd: CA 2 Mar 2012

By a transfer of 1990, land had become subject to a rentcharge to pay a sum of 1.00 pound per annum plus a fixed proportion of the claimant’s costs, expenses and outgoings incurred in fulfilling its obligations under the covenant. The 1977 Act disallowed any new rentcharges save as an estate rentcharge.
Held: Where a rentcharge is set up to secure recovery of the cost of the performance of covenant benefitting the servient owner’s land, it was valid and it would stay so as a registered estate rentcharge. However, at any point when the rent owner sought recovery of costs from an owner of the servient land the rentcharge provision could not be relied where the sums claimed were unreasonable as against performance of the covenant. In such circumstances the rentcharge did not cease to be an estate rentcharge or to be valid: it simply became unavailable to the rent owner as a means of recovering that unreasonable contribution.

Judges:

Mummery, Toulson, Kitchin LJJ

Citations:

[2012] EWCA Civ 237, [2012] 1 P and CR 19, [2012] 1 WLR 2626, [2012] WLR(D) 59, [2012] 2 All ER 1159

Links:

Bailii, WLRD

Statutes:

Rentcharges Act 1977 2

Jurisdiction:

England and Wales

Land

Updated: 26 July 2022; Ref: scu.451802