#3745 - Freehold Covenants - GDL Land Law

- Definition: promise contained in a deed extracted by 1 freehold owner (covenantee) from another (covenantor), whereby covenantor promises to do/not to do something over his land.

• creation: s53(1)(a) LPA 1925 – in writing signed by covenantor.

- Structure:

• 1. identify:

  • parties (original + successors).

  • dominant + servient land.

  • nature of breaches.

  • issue.

  • creation (s53(1)(a) LPA 1925: in writing signed by grantor) – assume valid.

• 2. equity: negative covs.

  • (consider equity 1^st: burden unlikely to pass at CL (Austerberry v Oldham Corp) + equitable remedies better).

  • burden: 4 requirements (Tulk v Moxhay: negative; accommodate dom. ten.; intention; notice).

  • benefit: touches/concerns land; annexation, assignment or scheme of development.

• 3. CL: positive covs may pass.

  • burden: generally will not pass; exceptions –

    • indemnity chain.

    • rule in Halsall v Brizell.

  • benefit:

    • express assignment (s136 LPA 1925).

    • implied assignment (P & A Swift Investments v Combined English Stores: touches/concerns land; original parties intend to pass; covenantee + successor hold legal estate in dominant land).

    • Contract (Rights of Third Parties) Act 1999.

Equity (negative covs. only).

(consider equity 1^st: burden generally does not pass at CL (Austerberry v Oldham Corp) + equitable remedies better).

Burden at Equity: 4 requirements (Tulk v Moxhay).

• (N.B. original covenantor: generally still liable – but practical difficulties + limited to damages).

- 1. Negative (restrictive): in effect/substance, not wording.

• test: no action / expenditure of money/time (‘hand in pocket’) (Haywood v Brunswick Permanent Benefit BS).

• covenant with both positive + negative undertakings:

  • sever negative elements if possible (Shepherd Homes v Sandham (No 2)).

  • overall positive/negative with condition (Powell v Helmsley: ‘not build w/out submitting plans’ negative).

- 2. Accommodates a dominant tenement: 3 elements.

• 1. covenantee + successor have interest in dom. land (at creation + enforcement) (LCC v Allen).

• 2. covenant ‘touches + concerns’ the land: benefits dom. land itself, not merely particular owner.

  • affects mode of use, occupation, nature, value (P & A Swift v Combined English Stores).

• 3. sufficient proximity (Bailey v Stephens; Rogers v Hosegood).

- 3. Original parties intended burden to run.

• express: e.g. ‘the purchaser with intent to bind the land known as X hereby covenants…’

• post-1926 – statute: s79 LPA 1925 (subject to contrary intention – Morrells of Oxford v Oxford United FC).

- 4. Purchaser of servient land has notice.

• registered land: notice in charges section of register (s32 LRA 2002).

• unregistered land: from 1926 – Class D(ii) land charge; pre-1926 – doctrine of notice.

Benefit at Equity

• (N.B. original covenantee: equity unlikely to intervene – no loss).

• enforcement in equity: both burden + benefit must run in equity (Miles v Easter).

- 1. Touches + concerns the land: see above.

- 2. Benefit passes by annexation OR assignment OR scheme of development (Renals v Cowlishaw).

• Annexation: benefit permanently tied to land at time cov. made passes automatically on transfer.

  • express (Rogers v Hosegood: ‘for benefit of’ dom. land; cf. Renals v Cowlishaw: for benefit of vendor + assignees insufficient).

    • pre-1926 covs: must be expressly annexed (Small v Oliver & Saunders).

  • post-1926 – statute (s78(1) LPA 1925: deemed to benefit covenantee + all successors).

    • wide interpretation: automatically passes benefit (Federated Homes v Mill Lodge Properties).

    • but limits (Roake v Chadha; approved by Crest Nicholson v McAllister):

      • can be expressly excluded.

      • dom. land must be ascertainable from covenant.

  • potential problems with annexation (Re Ballard’s Conveyance):

    • dom. land too large to benefit? (Wrotham Park Estate Co v Parkside Homes: 4000 acres OK).

    • successor of only part of dom. land?: cov. presumed to be annexed to each + every part (Federated Homes v Mill Lodge Properties).

• Assignment: covenantee assigns to successor at time of transfer must be repeated at every transfer.

  • at time of transfer (Miles v Easter).

  • dom. land must be property identified.

  • formalities: s53(1)(c) LPA 1925 – in writing, signed by grantor.

• Scheme of development: for housing estates – requirements (Jamaica Mutual Life Ass’ance v Hillsborough Ltd):

  • 1. intention to impose scheme of mutually enforceable obligations.

  • 2. clearly defined area.

Common Law (may pass positive covs)

Burden at Common Law

- General rule: burden will NOT pass to successor (Austerberry v Oldham Corp; Rhone v Stephens).

- Original covenantor: continuing liability (privity of contract).

• express: e.g. ‘covenantor covenants for self and successors in title…’

• post-1926: statute – s79(1) LPA 1925 (subject to contrary intention).

• BUT imperfect solution: can only obtain damages, not injunction vs. current owner.

- Exception 1: chain of indemnity covs. indirect enforcement through original covenantor.

• BUT problems: only damages; breaks in chain prevent current owner paying.

- Exception 2: burden assoc. with benefit (Halsall v Brizell: rights over roads + drains linked with cov. to pay proportion of costs).

• requirements (Thameshead Town Ltd v Allotey):

  • 1. benefit + burden explicitly linked (Rhone v Stephens: cov. to keep common roof in repair, supposed benefit of support from other side not close enough).

  • 2. successors have choice to take/renounce benefit (e.g. not if benefit is RoW over sole access road).

Benefit at Common Law

• (N.B. original covenantee: can still enforce if benefit not assigned but unlikely: no loss – only nom. damages poss.)

- Express assignment (s136 LPA 1925): 1. writing; 2. express written notice to original covenantor.

- Implied (P&A Swift Investments v Combined English Stores) – 4 requirements:

• 1. ‘touches + concerns’ the land: affects nature, quality, mode of use, value – not just personal benefit.

• 2. original parties intended benefit to pass to successors of dom. land.

  • express: e.g. ‘for benefit of vendor’s retained land known as X’.

  • post-1926: statute – s78(1) LPA 1925.

• 3. original covenantee held legal estate in dom. land at time cov. created: freehold or leasehold.

• 4. successor in title holds legal estate in land: need not be same (i.e. can be lease) (Smith and Snipes Hall Farm v River Douglas Catchment Board).

- Third party can possibly enforce cov. for their benefit.

• s56 LPA 1925: 3^rd parties may take benefit of cov. if expressed – must be identifiable (Beswick v Beswick).

• Contracts (Rights of Third Parties Act) 1999: 3^rd party can enforce term made for his benefit.

Remedies

- Injunction: prohibitory or mandatory

- Damages in lieu: when too harsh to impose mandatory injunction.

• Wrotham Park Estate Co v Parkside Homes: no injunction to knock down houses damages of 5% profits.

• but: not where developers presenting court with fait accompli (Mortimer v Bailey: injunction imposed).

Discharging Covenants

- Unity of ownership cov. permanently ends.

- Agreement of person entitled to benefit.

• express: e.g. bought out.

• implied: covenantee has submitted to long usage wholly inconsistent with cov. cannot enforce injunction (but CL damages still available).

- Discharge/modification by Lands Chamber of Upper Tribunal (s84(1) LPA 1925) – grounds: (+ may order...