Re Nisbet & Pott’s Contract

Court of Appeal

Basic Facts: Nisbet (N) claimed land acquired through adverse possession. Potts (P) bought land with building restrictions, attempting to rescind the contract due to these restrictions. N argued that the restrictions were extinguished by adverse possession.

Issue for the Court: How do freehold and leasehold covenants interact?

Held The court held that a purchaser with actual notice of an equitable mortgage may be bound by it despite lack of registration.

(Collins MR):

• Statute of Limitations does not apply to covenants until the right is infringed. A negative easement is enforceable against subsequent purchasers if they had notice. Positive covenants are not enforceable against successors unless they specifically agreed to them.