Austerberry v Oldham Corporation [1885] is the primary authority that the burden of a freehold covenant cannot run with the land at law — establishing the strict common-law rule on the transmission of obligations between successive owners of freehold land.

Facts of the Case

The dispute originated from an 1837 agreement in which landowners sought to build a shorter road between Higginshaw and Lower Moor. They formed a joint stock company, and one landowner, John Elliott, conveyed a slip of land to the company’s trustees. In the deed, the trustees covenanted for themselves, their heirs and assigns to convert the land into a road, fence it, and “for ever hereafter” maintain it in good repair for public use, subject to tolls. Elliott retained adjoining land on both sides. The property later passed to successors: the plaintiff, Austerberry, bought Elliott’s adjoining land, while the Corporation of Oldham acquired the road from the trustees. In 1880 the Corporation paved and sewered the road under the Public Health Act 1875 and charged the frontagers, including Austerberry, who resisted, claiming the Corporation was bound by the 1837 covenant to maintain the road at its own expense.

Key Legal Arguments

Austerberry argued the road had been dedicated to the public (making the public responsible under statute), or alternatively that the benefit ran with his land and the burden ran with the Corporation’s, at law or in equity, because the Corporation took with notice. The Corporation argued the road was a private commercial venture (maintained for profit via tolls), and that a positive covenant requiring the expenditure of money cannot be annexed to freehold land to bind successors.

The Judgment of the Court of Appeal

The Court of Appeal (Cotton, Lindley, and Fry LJJ) dismissed the claim:

  • Public highway and dedication: the road was not a public highway repairable by the inhabitants at large, because the owners reserved the right to charge tolls for profit — a private enterprise inconsistent with dedication.
  • The burden at law: the burden of a covenant does not run with the land at law outside a landlord-tenant relationship; Lindley LJ knew of no authority that a burden could be annexed by mere contract unless it amounted to a grant of an interest like an easement or rent-charge.
  • The benefit at law: the court doubted the benefit had passed; the covenant was for the benefit of the public using the road rather than annexed to Elliott’s plots.
  • The role of equity: the court refused to apply Tulk v Moxhay: equity enforces only restrictive (negative) covenants and cannot compel a successor to perform a positive act, even with notice.

Legal Authority and Significance

Austerberry is the definitive authority that positive freehold covenants are not directly enforceable against successors in title — an “ancient rule” later confirmed by the House of Lords in Rhone v Stephens (1994). Positive obligations therefore bind only the original parties under privity of contract. To bind future owners, conveyancers rely on indirect methods:

  1. The doctrine of benefit and burden: a successor cannot take a benefit (using a road) without accepting the related burden (repairing it).
  2. Chains of indemnity covenants: successive owners promise to indemnify their predecessors if sued.
  3. Estate rentcharges: using a legal interest to secure periodic maintenance payments.

Related Cases

  • Tulk v Moxhay (1848): the equitable exception allowing the burden of restrictive covenants to run against successors who take with notice — but not positive covenants.
  • Haywood v Brunswick Permanent Benefit Building Society (1881): equity will not enforce a covenant requiring the expenditure of money against an assignee.
  • London and South Western Railway Co v Gomm (1882): equity’s intervention is limited to negative/restrictive stipulations.
  • Rhone v Stephens (1994): the House of Lords declined to overrule Austerberry, confirming the burden of a positive covenant is unenforceable against successors.
  • Halsall v Brizell (1957): a key workaround — “he who takes the benefit of a right must bear the burden”.
  • Swift (P. & A.) Investments v Combined English Stores Group plc (1989): the three-stage test for whether a covenant “touches and concerns” the land.
  • Crest Nicholson Residential (South) Ltd v McAllister (2004): the land to be benefited must be identifiable from the conveyance.