White v Bijou Mansions: CPO s.26

White v Bijou Mansions Ltd ([1938] Ch 351) CA (Eng) concerned an estate in London that was to be developed as houses. Fellows (White’s predecessor in title) bought number 16 Palace Court. Nicholson bought number 18 Palace Court. Nicholson’s successor-in-title granted a 28 year lease of 18 Palace Court. Bijou Mansions took an assignment of this lease. The sale of number 18 to Nicholson had included a restrictive covenant only to use the property as a private residence. Bijou Mansions planned to convert it into a series of ‘flatlets’. White sought to enforce the restrictive covenant. Did White have the benefit of it? The primary argument was that the Shaftesbury House Estate was subject to a building scheme and that this scheme gave White the benefit of the covenant. The English Court of Appeal found that there was no evidence of a building scheme in this case. Could the English equivalent of CPO s.26 (s. 56 of the Law of Property Act 1925) give White the benefit of the covenant? It did not because the Court of Appeal found that  the covenant had not been made with the owner of 16 Palace Court. It is not enough to say that the benefit of the covenant would be useful to you. It must be possible to show that White is a person who falls within ‘the scope and benefit’ of the covenant according to the true construction of the document in question’ (per Sir Wilfred Greene MR at 365).

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