Freehold Covenants
Definitions
Covenant - promise generally made in a deed
Covenantor - person who makes the promise
Covenantee - person who receives benefit of the promise
Servient land - land which carries the burden of the promise
Dominant land - land which enjoys the benefit of the promise
Positive or negative/restrictive
Positive
Can NEVER be an interest in land and does not run with land
Enforceability
By original parties
Ordinary rules of privity of contract apply
Against successors in title
Common law
Rules for passing benefit
Rules for passing burden
Equity
Rules for passing benefit
Rules for passing burden
Express assignment
s136 LPA 1925
Notice of the assignment must be given to the covenantor in writing
In writing
P A Swift Investment v Combined English Stores Group pld (1989)
Touch and concern land
Parties intended the benefit to pass
Original covenantee must have held legal estate
Successor in title to covenantee must hold legal estate
For the benefit of dominant land: only benefits estate owner while they own the estate
Affects the nature, quality, use or value of the dominant land
Not expressly personal
Express wording of covenent - "...for the benefit of land known as..."
Implied by s78(1) LPA 1925 - "a covenant relating to any land of the covenantee shall be deemed to have been made with the covenantee and his successors in title and the persons deriving title under him..."
s1(1) LPA 1925 - no benefit can pass at law where covenantee has only an equitable interest in the dominant land
Smith and Snipes Hall Farm Limited v River Douglas Catchmen Board (1949)
Other methods
Contract (Rights of Third Parties) Act 1999
s56 LPA 1935 - "A person may take the benefit of any covenant over or respecting land although he may not be named as a party to the conveyance"
Amsprop Trading Limited v Harris Distribution Limited (1997)
Burden doesn't pass at common law
Austerberry v Oldham Corporation (1885)
Rhone v Stephens (1994)
Original covenantor remains liable - s79 LPA 1925
But damages only - Tophams Ltd v Earl of Sefton
Ways to circumvent rule
Chain of Indemnity Covenants
Do not pass on burden
Provide means of recovery outlay for someone else's breach
Perpetually renewing contract
Halsall v Brizell (1957)
Other cases
Rhone v Stephens
Thamesmead Town Ltd v Allotey
Davies v Jones
Wilkinson v Kerdene
Limited and deficient - need help of equity
Generally burden doesn't pass under CL - but equitable idea that if take benefit, must submit to burden
Tulk v Moxhay (1848) - burden passes if conscience is affected (might have gotten land at a lower price based on burden etc.) - based on what purchaser knew or ought to have known, but knowledge alone won't pass burden
Four rules
Covenant must be negative/restrictive in substance
Covenant must accomodate the dominant tenement
Original parties must have intended that burden should bind successors
The person against whom the covenant is being enforced must have notice
Ways to tell
Can covenant be satisfied by doing nothing? If yes - negative
Haywood v Brunswick Permanent Benefit Building Society - "hand in pocket test"
Money, time, energy
Mixed covenants
Shepherd Homes v Sandham (no 2) (1971) - covenant can be split into positive and negative elements - stand alone - negative aspects pass without positive ones
Powell v Hemsley (1909) - overall positive or negative covenant "carries" a condition - can't be split
Original covenantee and their SIT must have interest in the dominant tenement when covenant made/enforced - LCC v Allen
Covenant touches and concerns land
Proximity - Bailey v Stephens
Express wording of convenant
Implied under s79 LPA (1925)
Unregistered land - class D(ii) land charge
s198 LPA 1925 - registration = notice to world
s4(6) LCA 1972 - if not registered, purchaser of legal estate not bound
Doctrine of notice applies for pre-1926 covenants
Registered land - s32 notice on charges register
s32 LRA 2002 - registration = notice to world
s29 LRA 2002 - if not registered, purchaser of legal estate not bound
Bemefit and burden rules go hand in hand - where burden runs in equity, benefit must be made to run in equity
Burden passes if touches and concerns the land and passes in one of three ways - Renais v Cowlishaw
Annexation - express, implied or statutory
Assignment
Building schemes
"Legal glue" - benefit of covenant is stick to land from the outset in one of three ways
Express
Implied (rare)
Statute - s78 LPA 1925
Have to look carefully at wording - parties intended benefit to run - must be stuck to the land not the people
Compare Rogers v Hosegood (land) to Renals v Cowlishaw (people)
Benefits each and every part - Wrotham Park Est Co Ltd v Parkside Homes Ltd
As interpreted in Federated Homes Ltd v Mill Lodge Properties Ltd
Unless expressly or impliedly excluded - Roake v Chadha
Only for post-1926 covenants
Crest Nicholson Residential South Ltd v McAllister
Benefit must be passed every time the land changes hands - Miles v Easter (1933)
Way certain covenants passed - land bought and divided into plots aka housing estates - covenants enforced by subsequent owners
Elliston v Recher
All purchasers acquire their property from the same vendor
The vendor has divided the estate into plots prior to the sales
The restrictive covenents were intended by the vendor to continue for the benefit of all the plots
Every purchaser must acquire the plot on the understanding that the covenants benefit all the other plots in this scheme
Equitable remedies
Injunction
Damages
Maxims of equity
Discharge of restrictive covenants
Express
Implied
Declaration by court as to nature and extent
s84 LPA 1925 - deed of discharge
Covenant obsolete due to changes in the character of the neighbourhood
Covenant impedes reasonable user of land
Benefitted parties have agreed by their acts or omissions to discharge
Benefited parties will not be injured by the proposed discharge or modification