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ENFORCING RESTRICTIVE COVENANTS IN LEASES: THE CASE OF COUNTY HALL

THE important recent decision of Neuberger J. in Oceanic Village Ltd. v. United Attractions Ltd. [2000] Ch. 234 considers the enforceability of a restrictive covenant, contained in a lease, which relates to other adjacent land of the landlord. All relevant title was registered, and the case raised the problem addressed in relation to unregistered land by Dartstone Ltd. v. Cleveland Petroleum Co. Ltd. [1969] 1 W.L.R. 1807 where Pennycuick J. held that, as such covenants were not registrable under the land charges legislation, all depended on an application of the doctrine of notice. Shirayama, the Japanese freeholders and registered proprietors of the old County Hall, granted a lease in February 1997 of premises in the building to the claimants, Oceanic, for a term of 20 years. Oceanic covenanted not to use the premises otherwise than as a high quality gift shop without the landlord’s written consent. By clause 4.6 of the Oceanic lease, the landlord covenanted “not to permit any other gift shop to be operated in the Building provided that the restriction shall not apply to any hotel in the Building”. In July 1998, Shirayama granted a lease of another unit in the building to the defendants, United, for a term of 15 years. Under the United lease, the use of their unit was to be restricted to a Football Hall of Fame and ancillary commercial uses. There was no specific restriction of gift shop use.