Restrictive Covenants Notes

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TABLE OF CONTENTS
Textbook..................................................................................................... 3
Positive covenants.................................................................................................3
Running of the burden.............................................................................................................. 3
Running of the benefit.............................................................................................................. 4
Restrictive covenants............................................................................................4
Limitation to restrictive covenants........................................................................................... 5
Dominant tenement.................................................................................................................. 5
Running of the benefit.............................................................................................................. 6
Annexation........................................................................................................................................... 6
Assignment.......................................................................................................................................... 7
Schemes of development..................................................................................................................... 8
Contract............................................................................................................................................... 9
Conclusion........................................................................................................................................... 9

Modification.............................................................................................................................. 9
Enforcement of covenants.....................................................................................9
Reform...............................................................................................................10

Freehold covenants..................................................................................... 10
Burden............................................................................................................... 10
Positive Covenants.................................................................................................................. 10
Principles........................................................................................................................................... 10
Will the burden run?....................................................................................................................... 10
Cases................................................................................................................................................. 11
Thameside v Allotey........................................................................................................................ 11
Wilkinson v Kerdene [2013] EWCA Civ 44 (NOL)..........................................................................11
Bright, Estate Rentcharges and the Enforcement of Positive Covenants [1988] Conv 99.............12

Doctrine in Tulk v Moxhay...................................................................................................... 13
Principles........................................................................................................................................... 13
Why are restrictive covenants different?........................................................................................13
Will/has/should the difference be changed/overruled/undermined?...............................................13
Other limits to Tulk v Moxhay........................................................................................................ 14
Cases................................................................................................................................................. 14
Tulk v Moxhay................................................................................................................................ 14
Haywood v Brunswick.................................................................................................................... 15
Rhone v Stephens........................................................................................................................... 15
LCC v Allen..................................................................................................................................... 16
Commentary...................................................................................................................................... 16
Gardner, Two Maxims of Equity [1995] CLJ 60 [on Rhone v Stephens].........................................16
Turano, Intention, Interpretation and the "Mystery" of S79 LPA 1925 [2000] Conv 377 [on Rhone v Stephens]..................................................................................................................................... 17
London & South Western Railway Co v Gomm (1882) 20 Ch D 562 at 582-3} (NOL)....................17
Re Nisbet & Potts' Contract [1906] 1 Ch 386 at 402-4, 405-6 (NOL).............................................18

Benefit............................................................................................................... 18
Positive covenants.................................................................................................................. 18
Principles........................................................................................................................................... 18
When will the benefit run with the land?........................................................................................ 18
How must the benefited land be identified?...................................................................................19
Who can sue, if the benefit runs with the land?.............................................................................19
Cases................................................................................................................................................. 20
Smith and Snipe v River Douglas Catchment Board......................................................................20
LAND LAW: COVENANTS
Page 1 Beswick v Beswick.......................................................................................................................... 21
Amsprop Trading v Harris Distribution.......................................................................................... 21

Annexation.............................................................................................................................. 21
Principles........................................................................................................................................... 21
What is the effect of annexation?................................................................................................... 21
What are the requirements of annexation?....................................................................................22
What is required for 'concerning or touching' the land?................................................................22
What is the benefit annexed to - the land as a whole or some part?..............................................23
Does an express contrary intention negate s78?............................................................................23
Cases................................................................................................................................................. 23
Rogers v Hosegood......................................................................................................................... 23
Re Ballard's Conveyance................................................................................................................ 24
Federated Homes v Mill Lodge....................................................................................................... 25
Crest Nicholson Residential v McAllister.......................................................................................25

Assignment............................................................................................................................. 26
Re Union of London & Smith's Conveyance, Miles v Easter [1933] Ch 611 at 629-634.................26
Newton Abbott v Williamson (1952)...............................................................................................26
Re Pinewood Estate, Farnborough [1958] Ch 280.........................................................................27

schemes of development......................................................................................................... 27
Elliston v Reacher [1908] 2 Ch 374 at 384.....................................................................................27
Re Dolphin's Conveyance [1970] Ch 654........................................................................................ 27
Texaco Antilles v Kernochan [1973] AC 609...................................................................................28
Emile Elias v Pine Groves [1993] 1 WLR 305.................................................................................28
Whitgift v Stocks [2001] EWCA Civ 1732 (NOL)............................................................................29
Birdlip Ltd v Hunter [2017] 1 P&CR 1 (recent but not important).................................................29

Reform...............................................................................................................30
Law Com No 327, Part 5................................................................................................................. 30

LAND LAW: COVENANTS

Page 2 TEXTBOOKCovenants are obligations entered into by deed so can be regarded as part of law of contract
Two aspects of covenants land law is concerned with:
o Does the benefit of a covenant pass to the purchaser of land benefited by the covenant?
-Until 1870s one couldn't assign the benefits of contractual rights, but the common law had centuries earlier recognized the passing of the benefit of covenants relating to land

Does the burden of covenants run on a transfer of the land?
-Since mid-19C Equity recognized that restrictive covenants (those not involving expenditure) bind purchasers of the burdened land - thus,
restrictive covenants are a new form of equitable proprietary interest

POSITIVE COVENANTS
Positive covenant: a covenant that requires expenditure by the covenantor.
RUNNING OF THE BURDEN-

Burdens of positive covenants do NOT run with the land to which the covenant is attached: Rhone v Stephens
Positive covenants can be entered into on a personal basis (eg. obligation by statutory body to maintain riverbanks), where no question of running of burden arises, or in a way purporting to bind purchases (eg. an obligation to keep a road on one's land in good repair and to allow the public to use it), where the question arises. Keppell v Bailey held that it didn't bind purchasers - this was reaffirmed since.
Now commonhold allows the burden of covenants to run, but it is not suitable for all situations so has driven proposals for reform
Before commonhold was created, much discussion was about how to circumvent the law in this area:
o Use of leases: leasehold covenants allow positive and restrictive covenants to run, which means that leases are almost always used when positive covenants are vital (eg. block of flats).
-BUT only landlords can enforce these covenants, not lessees of other flats. Thus it is less flexible than covenants, which can be made enforceable by anyone benefited from them
-AND landlords cannot enforce positive covenants against sub-tenants because there is no privity of estate between them
-Is the difference between freehold and leasehold justified?
-YES - in leases the landlord retains interest in the land so it is essential for the protection of this interest that he be able to enforce positive covenants of repair. In freehold covenants, the

LAND LAW: COVENANTS

Page 3 covenantee owns adjoining land so it is less essential that positive obligations are enforced in this context as he can do the work himself
-BUT - the leasehold covenant is not entered into to protect the freehold reversion, but rather to protect adjoining land of the other lessees, so this distinction (though effective) is artificial

Chain of covenants: covenants relating to land usually provide that the covenantor will be liable if he sells the land and the purchaser fails to comply, so sellers usually require the purchaser to comply with the covenant.
-BUT this chain could always be broken (eg. if an intermediate purchaser disappears or dies
-HOWEVER the Contracts (Rights of Third Parties) Act 1999 may enable the original covenantee to sue on the promise by the present owner (but this depends on whether the parties did intend the terms to be enforceable by the third party [original covenantee])
o Requiring the covenantee's consent before sale by covenantor: In registered land sale in breach of requirement of consent can be entered as a restriction
-BUT this is cumbersome and there are no equivalents in unregistered land

Benefit and burden: if the covenant is the counterpart of rights being enjoyed by the purchaser, the doctrine can be used
-BUT Rhone v Stephens: will not apply unless performance of the covenant is a condition on the exercise of the right
RUNNING OF THE BENEFITToo few positive covenant cases to extract any principles
Most cases seem to treat principle as the same between positive and restrictive covenants
Probably correct to say that a covenant will run provided that it 'touches and concerns' the benefited land (both positive and restrictive)
There used to be a rule that a C must have the same estate as the covenantee (eg.
lessee couldn't enforce a covenant with the landlord), but Smith v River
Douglas said that this rule was abrogated by LPA s78

The role of s56 LPAProvides: a person may take an interest in a covenant, although not named as a party
Application to benefit of covenants (both positive and restrictive):
o May enable purchasers from covenantees to take benefit, should it not otherwise run. Denning used this interpretation in Smith, but this ignores a

LAND LAW: COVENANTS

Page 4 long line of cases holding that s56 only applies to existing and not future/uncertain persons.
o Covenant may be intended to benefit a neighbouring owner not part of the conveyance (eg. vendor sells land to A and neighbouring plot to B, taking a covenant from B that is intended also to benefit A), and in these circumstances s56 may allow A and his successors to sue. But in Beswick v
Beswick, HL said:
-Upjohn (Pearce agreeing, Reid leaving the question open but appearing to agree, Guest appearing not to agree) - s56 applies only where the covenant purported to be with C (so no longer necessary to name C as party to the deed
-This was applied subsequently by Neuberger

Therefore it is not enough to promise the vendor that adjoining landowners will benefit - there must be a promise to those persons
C (RoTP) Act 1999-

Enables someone other than covenantee to sue where the term purports to confer a benefit on him
This overlaps with s56 but without its limitations, but it might be preferable to use s56 because the new right might be affected by rescission or variation of the contract
Covenantee's successors could probably use it too, but the rules on running of benefit are sufficiently relaxed that successors will rarely need to rely on the Act

RESTRICTIVE COVENANTS-

Purchasers from covenantors are bound: Tulk v Moxhay
Rationale: fear of inappropriate use of land close to covenantee's - without a restrictive covenant it's impossible for covenantee to sell part of his land without risking what he retains becoming worthless.
o Thus a planning function (limits use of land, encourages sale of land)
More specific analysis: purchaser with notice of an obligation cannot ignore it
(inequitable)

LIMITATION TO RESTRICTIVE COVENANTS
Tulk inapplicable to positive covenants-

Tulk involved covenant of both positive and negative content. The remedy was limited to a negative obligation but the reasoning regarding the effect of notice on purchasers was equally applicable to both and so it caused confusion as to whether the doctrine applied to positive covenants
Haywood v Brunswick: only one example of application of Tulk to positive covenants, and it was assumed that Tulk limited the principle to restrictive covenants

LAND LAW: COVENANTS

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London and South Western Railway v Gomm: Confirms that Tulk is only applicable to restrictive covenants (exhibiting some confusion as to Haywood:
Jessell, Lindley declined to 'extend' Tulk while Hannen treated Haywood as restricting it)

Why-Jessell MR said in Gomm that Tulk was an extension in equity of Spencer's case or negative easements (the latter more likely, because if the former, then difficult to understand why positive covenants are not included)
Rhone v Stephens, considering positive easements and endorsing earlier cases,
said that it would be inconsistent with common law privity of contract for equity to enforce a positive covenant (though hard to understand why a positive equitable remedy negates the common law rule while a negative one doesn't)
Other reasons?
o Problems in giving equitable remedies for positive obligations

Fear that positive obligations would burden ownership (reduction in alienability of land)
o Wrong to introduce running of positive covenants when many will have dealt with land on the basis of Haywood

What counts as a restrictive covenant?Tulk: if a covenant has both positive and restrictive obligations the court will enforce the restrictive part
Language of covenant is inconclusive: Gomm
Crucial issue is expenditure - is the covenantor required to 'put his hand into his pocket'

DOMINANT TENEMENT
Requirement of dominant tenement-

Requirement stems from Tulk that liability is justified because otherwise it would be dangerous to sell part of one's land (Cottenham LC)
Why does requirement exist?
o Analogy with easements, BUT in easements context too is the requirement sometimes doubted, and at any rate we shouldn't push the analogy too far

Enforcement by someone who doesn't own neighbouring land would render covenants too oppressive: they are socially useful for protecting neighbouring land, but otherwise it is an unnecessary bar on development
Dominant tenement need not be a separate plot of land: Hall v Ewin - different estate in the same land will suffice (thus landlord can assert the freehold reversion as dominant tenement to enforce restrictive covenants against subtenants (no privity of estate))

Touching and concerning the dominant tenement
LAND LAW: COVENANTS

Page 6 -Dominant tenement must be benefited by the covenant
Test modelled off leasehold covenants: Rogers v Hosegood - covenant must either 'affect the land as regards mode of occupation or ... be such as per se, and not merely from collateral circumstances, affects the value of the land"
Question of fact

Problems-

Large estates: if I sell one small part of a large estate with a covenant attached to benefit my entire remaining estate, the court usually accepts that my estate is benefited as long as it is reasonable: Marten v Flight Refuelling. But if I
express the benefit to be for each part of my retained estate, and then sell a faraway plot of land to a purchaser, can he enforce the covenant? It is likely that the court will find that the land was not benefited
Types of covenant: some covenants restricting building have been found to not be for the benefit of adjoining land but rather to obtain part of the gain on a change of use, or covenants to prevent competition with covenantee's business. Some cases have found these to be good covenants (Newton Abbott) but other cases have taken the opposite view.

RUNNING OF THE BENEFIT-

Lots of 20C cases, probably stemming from uncertainty as to how far RCs should be treated as property rights running automatically or contractual rights passing by assignment
Lots of resulting complexity
Federated Homes v Mill simplified it a bit
Three traditional ways benefits might run (plus C (RoTP) Act 1999)

ANNEXATION-Linking of covenant to benefited land
Once annexed benefit passes automatically on transfer of land (purchaser's awareness of covenant is irrelevant)
How to annex?
o Identify benefited land

Show that covenant is for the benefit of that land
Leading case: Rogers v Hosegood - annexation resulted from covenant with vendors, "their heirs and assigns, and others claiming under them to all or any of their lands adjoining or near to the said premises". The covenant didn't identify the benefited land with precision - extrinsic evidence was needed.
Renals v Cowlishaw: fatal to say nothing about the land
Reid v Bickerstaff: provision that benefit was for 'vendors, their heirs and assigns' was insufficient

Role of s78 LPA
LAND LAW: COVENANTS

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